J. P. Morgan, a well-known investor, is reputed to have observed: “You can’t afford a boat if you have to??? what it costs to run one.” Many individuals today believe that a statement similar to this may be made about joining a country club.
The cost of country club membership can range from less than $500 per year in certain small towns to thousands of dollars in affluent suburban and exurban areas. Members are frequently obliged to pay minimum monthly home charges, as well as specified fees for golf or tennis, as well as service fees to club attendants.
Many clubs impose an initiation fee, which can be as high as $25,000 in some cases. Others use a bonding structure, in which new members must purchase a portion of the bond “On resignation, the club’s “ownership” can theoretically be sold back to the club or to another new member.
Country club members claim that their annual expenses have been progressively increasing in recent years. According to some members of New York metropolitan area clubs, the growth has been at least 10% each year.
Is it worthwhile to join a country club?
A country club membership allows you to play golf on a regular basis without having to pay a charge each time. In fact, the more you play, the more you’ll feel that your dues are being well spent. It’s a terrific reason to play as much golf as you want!
What are the rules for country club minimums?
Most clubs demand that members spend a certain amount on food and drink each month ($50-$100 at some, more at others). You’ll be compelled to pay the monthly minimum even if you never buy a Coke or a meal. What counts toward your minimum is determined by each club. Favorite hangouts like the midway house, pool snack bar, and grillroom aren’t always represented. Beverages may be excluded from minimums at some clubs.
When you leave a country club, what happens next?
- In most circumstances, they are not compelled to pay assessments (but I have seen some cases where an assessment took place to Non-Equity members.)
- You are free to leave the club at any moment, but you will not be refunded your deposit (initiation).
The general equity and non-equity membership structures are described in these descriptions. However, in other situations, you may be offered an equity-based, non-refundable option in which you would have a say in the club’s governance but would not be eligible for a monetary refund if you wished to resign. Each club’s documentation will use different terminology, so it’s crucial to read and comprehend them completely.
On the other hand, I got the opportunity to speak with Dr. Jim Butler, the CEO of Club Benchmarking and an industry authority on club finances. I inquired about the financial implications of equity vs. non-equity membership programs.
“In general, most private clubs will spend a percentage of initiation revenue toward capital reserves and removing equity members on a resignation list,” he said. “The issue with a huge resignation list is that a large portion of the club’s revenues are going into refunds, when it would be far more profitable for the club to combat depreciation of the club’s assets, capital projects, and so on.”
“This also reduces the likelihood of having to go before the membership for approval if capital reserves are insufficient. In a post-2009 environment, a club is considerably better off with non-refundable memberships or putting itself in a financially sound position ahead of a possible economic downturn. Sadly, most clubs were left with lengthy resignation lists in 2009, which they are still refunding today.”
Butler also discussed how important it is for a club to have a long-term dues model; this is the club’s lifeblood, whether circumstances are good or bad. The club may have difficult options on how to continue in a financially unstable climate if both equity and non-equity members fail to pay their dues. His final recommendation was for prospective members to contact the club and request financial information, as well as a thorough grasp of the group’s capital reserves. In addition, find out what the status of the club’s resignation list is right now. A reputable advisor can help you do this as part of your financial due diligence.
This essay, like the others before it, is intended to educate you, the consumer. I’m not trying to paint a negative picture of the private club sector; in fact, I believe it’s as robust as it’s ever been, and its growth since 2009 has been fascinating to observe. In order to ensure that future members can improve their quality of life, clubs are becoming more female-friendly, amenity-driven, and focused on health-related programs than ever before. Furthermore, from a financial standpoint, clubs are considerably more cautious these days and do not jump ahead of their skis. Rest certain that the board of directors of your future club will not allow another crisis to occur since they will be financially prepared to weather any future economic storms.
Bottom line: do your homework, ask the correct questions, and read those membership contracts thoroughly before signing, as well as knowing your exit route. You can enjoy all the club has to offer and make excellent new friends by ensuring that you have a thorough grasp of your position, whether you are an equity or non-equity member. Being a member of a private club is definitely a lovely experience.
What is causing country clubs to fail?
Why won’t millennials join country clubs, asked CityLab in a recent article? Country clubs are failing to gain a foothold among a younger demographic for a variety of reasons, including their well-deserved reputations for racial and religious discrimination, exorbitant membership fees, “old-fashioned dress codes and rules about cell-phone use,” and the fact that country clubs have largely centered their social activities around one of the most boring yet expensive sports in the world: golf, according to writer Kelsey Lawrence.
Can you negotiate initiation fees at a country club?
You may have more negotiating room than you think, depending on how actively the group is recruiting members. When you join, you should ask for the following: A lower starting charge.
Are country clubs exclusive to the wealthy?
Some things are beyond the reach of money. The most coveted privilege for the rich and famous is membership in one of the world’s most elite golf and country clubs, but becoming a member is practically impossible. And if you’re an ordinary mortal, don’t even consider joining one of the exclusive private clubs; you’ll almost likely never be welcomed or able to afford the exorbitant initiation fees and dues.
What are the advantages of being a member of a country club?
Golf is frequently one of the best benefits of a country club membership. Many country club memberships include unlimited golfing, so if you are a serious golfer, this benefit alone could make your membership fees worthwhile. Unlimited use to driving ranges, putting greens, and other on-site practice facilities is sometimes included. Clubs frequently have reciprocal agreements with other courses in the area or throughout the world, allowing you to play a variety of courses as part of your membership. The more golf you play, the more you’ll feel like your membership is genuinely worth it.
Private club golf courses are usually in excellent shape, with thoughtful landscaping and meticulous management. Many of them were designed by famous architects or are historically significant. Some of the historic golf courses will include much more natural landscaping than newer courses, however styles will vary based on the club’s design and presentation. The money raised from membership dues can be used to provide a greater level of professional care on the course, such as regular maintenance and remodeling initiatives to keep the course and clubhouse in top shape.
How much does a Sahalee membership cost?
Sahalee does not have a swimming pool or tennis courts, while having a 27-hole golf course. Dues are around $300 each month, with a membership costing around $70,000 today.