Choosing Your Private Country Club in Palm Beach County (Part 1 of 2)

December 10, 2013 § Leave a comment

The Palm Beach region is synonymous with luxury country clubs that boast world-class golf courses. Clubs such as BallenIsles, PGA National, Mirasol, Bear’s Club, Ibis, Old Palm, Frenchman’s Reserve and Frenchman’s Creek are legendary for their golf amenities, and if you plan to buy a home here it’s probably because you love to play golf.

Whether you are relocating permanently or shopping for a second home, buying into a luxury country club community is an expensive choice. While the ultra-wealthy may not be too concerned with club expenses, many successful people who move to the Palm Beaches need to ensure that their decisions do not derail their retirement plans. That’s especially true today, as investment returns remain flat for many pre-retirees.

“North Palm Beach County alone has 23 private country clubs with golf courses” says Michael Robinson of The Lyman Group – HighTower Advisors who was an assistant golf professional at BallenIsles from 1996 to 2003 and now plays at PGA National.

If you are retiring or just want to spend more time on the links here are some factors to consider when choosing among golf communities, from financial planning and lifestyle perspectives.

Count the Courses

Clubs such as Ironhorse in West Palm Beach and Eastpointe Country Club in Palm Beach Gardens have one golf course each, while others have three or four. PGA National has five, offering 90 different holes. Multiple courses give you more variety, making it less likely you’ll get tired of playing the same 18 holes over and over. Of course, the larger clubs tend to cost more as a result.

Factor in Other Activities

Most clubs offer lots of other events and attractions. For instance, Mirasol in Palm Beach Gardens hosts carnivals, game nights, drive-in movies, petting zoos, animal lectures, a kids’ club, summer camps, and golf and tennis tournaments. If you have a big family and these extras are important, you may want to pay more to join a larger club.

Compare Membership Levels

Most clubs offer different levels of involvement, from social memberships that don’t include golf or tennis time to full golf memberships that allow you to play whenever you desire. One way to lower costs is to find a club that offers intermediate memberships that allow you to play a certain amount of golf or to play at specific times or on specific days.

Understand All of the Costs

Many country clubs require a one-time fee that ranges from $65,000 at Old Marsh to $175,000 at Old Palm for a full golf membership; fees are lower for social memberships. Some clubs require an initiation fee only, while some require both an equity buy-in and an initiation fee. Initiation fees are not returned when you leave the community whereas equity fees are returned but may end up higher or lower than your equity buy-in, depending on how the club fares economically. You also must take into account annual dues, trail fees, and the costs of dining and other social activities. Add up all of the costs before comparing clubs.

Look at Your Future Obligation

As you age you may come to a point where you are physically unable to play golf anymore, or an injury may force you to vacate the greens earlier than you thought. If that happens, does the club require you to maintain your golf membership or will you be allowed to downsize to a family or social membership with lower costs?

Consider Long-Term Savings

Consider the interest you may earn on the money you save, not just the lump sum. For instance, annual dues for a golf membership vary from $4,700 at Jupiter Country Club to $25,000 at Bears Club, a difference of $20,300. Over 10 years that adds up to $203,000. But if you invested the $20,300 each year and earned 4% compound annual interest, you would actually end up with $273,676.

My next blog, Part 2, will tackle the prospects of the Palm Beaches country clubs in light of economic and demographic trends, another important factor in choosing which club to join.

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