Is this a good idea?

[lena green]

A friend of mine, I won’t tell you where just yet, has an enormous tract of land. Planning permission has been granted for many properties but they only take up 15% of the total area of land. So he’s left with acre after acre of empty land.

The land is beautiful, there’s no doubt about that and a golf course has been considered. Actually, that wouldn’t take much re-modelling of the land, as the land is a natural course anyway, it just wants 18 holes punching in it and the grass cutting! But the fact remains, even with a golf course on the land, there’s still acres left empty and a few lakes and woods.

His idea is to give plots of land away.
Yes you read that right.

The area where the land lies is a heavy tourist area not far from town and the beach and accommodation in the area is scarce. Needless to say, tourism is high on his list.

Here’s his idea, he’d welcome your thoughts.

The land is genuinely free, he will give the rights to it immediately a client agrees to do business with him.

And the business is……………..

If he puts the golf course there, the client puts a luxury log cabin on the land at his/her own expense.

The cabin would then be sold and ownership shared by up to 8 golfing owners, each having 6 weeks access. Each golfer would pay for his share of ownership, which would amount to more than what the client paid for the log cabin originally.

The client and my colleague then share the profits. By the way, the golfing is free to cabin buyers. (At this stage the cabin buying client just had his/her money back).

Most golfers don’t play for six weeks at a time, so their deal would be that when the cabins not occupied, its rented back to the company for a low rent and then rented back out thro the company for a high rent, which again, the client has a share of.

Those ‘low’ rentals paid to cabin owners would one day mean the cabin comes free to the golfer.

The golfer is contracted not to rent out his property privately but can play golf free forever instead.

Clients profits are very evident, profit on the sales of cabins, profit on the rentals. And all he/she has to do is put the cabin (s) on the land. Money back as soon as they are sold.

Will this work or won`t it, what do you think?

[oregon woodsmoke]

Just how do you put cabins on property that has been refused planning permission permits?

[lena green]

Hi Woodsmoke, if your plot has been refused planning permission, you would need to look at what can be allowed without planning permission.

For instance most things on 'wheels' are parked there and based on this,laws change. look at Park Homes, Static Homes, camper caravans and the like also things on 'stlts' that can be moved are not considered by most councils as permanent homes,therefore planning not required. However, one must take into consideration the environmental impact. Sewage, electricity, car parking and roads.

If joned to the national electric grid and sewerage systems, you may need planning so think about Solar Energy and independant sewarage systems, I can help you on both.

You may also want to go back to your council to determine why your planning was knocked back, too many homes maybe, usual problem.

[Lysos]

Doesn't make sense. The cabins are to be sold for the same price as the 'client' paid to have them built - so no profit there.If everyone is having "free" golf how are you going to pay for the running of the golf course ?.

If there was money to be made, your friend would build the golf course (assuming he got p.p.) & build cabins himself.

[jessicatam]

It doesn't sound like it would work to me, if you're 'paying' your golfers, then trying to rent the properties back out - what if you have properties standing empty for a while?

[lena green]

Hi Lysos/Jess,

In answer to your questions, here`s how the numbers crunch.

Investor pays 100k Sterling for the cabin. Its then sold with free golf for 160k divide by 8 separate shares @ 20k apiece, so there`s the profit of 60k. 100k goes back to the investor straight way. 60k split 50/50

Cabins then rented from Golfer/shareholder at token rent, say 100 a week, remember he has no golfing fees to pay and many courses would charge more than the 20k paid, just for club membership.(without a log cabin thrown in).

The cabin passes to the company to rent out at 1000 a week (when not occupied by the golfer,) high season and 500 a week low season. Rental incomes shared between investor and site owner.

Maintenance of the site comes from two sources, rental incomes as aforementioned and green fees from none resident golfers and as the whole site is deemed 'touristic' there would be lots of other facilities producing cash. All the Villas and apartments on the site have to be rented out under the terms of the 'touristic' license, so income is assured.

This site by the way, is already underway and properties will be marketed off plan before the years end.
So to simplyfy things:
Invester puts in 100k receives 130k on sale of 8 shares followed by ongoing income from rentals. Less costs.
Shareholder receives 6 week ownership and a small income from rentals which would undoubtedly cover flights + receives free golf.

On 'doing it himself'........ no doubt as profits roll in from other aspects of the site, he would turn in that direction. The site is so vast, literally hundreds of golfing cabins could be placed upon it. Based on this fact, this idea has a limited life with the owner ceasing the offer say after 25 had been sold. In effect, it gets him off to a flying start at no cost to himself and 25 investors get a cracking deal.

[wesrae]

"Actually, that wouldn’t take much re-modelling of the land, as the land is a natural course anyway, it just wants 18 holes punching in it and the grass cutting!"

Aside from other valid comments raised in response to your question, I have to add that the cost of building a golf course is incredibly high. It really is not as simple as punching the holes in and cutting the grass, if you want to create a desirable course the cost will run into the millions.

You need all the associated facilities (clubhouse, changing rooms, car parks) to be constructed which alone is not cheap. After that, installing irrigation, drainage, pathways, water features, bunkers over a full size course is a momoth task!

Really thats only a start, but I think you would need to take another look at the figures. I'm sure if you are determined enough there is a solution out there, whether its a golf course or otherwise.

[Lysos]

The figures really don't bear scrutiny. As wesrae has pointed out it costs a lot to build a golf course and the necessary infrastructure. You say that golfers wouldn't want all their 6 week share; not all at once, they wouldn't, so the 'owners' would get to gether and draw up a timetable, spreading their weeks over the year. So, no spare weeks to rent out, no rental income. Golf courses cost a lot to maintain, which is why most clubs need a core of members paying annual fees; they couldn't exist on casual green fees. There wouldn't be much spare capacity for casual golfers anyway. Let's assume first tee time 07:00 & last tee time 16:00 (in summer, shorter time frame in winter) allowing only fourballs. Max throughput is 216 golfers per day. Apart from that most golfers prefer serviced accommodation (i.e. hotels) and to play a variety of courses when on holiday. That is why Belek in Turkey wins hands down for me.

This idea is simply a non starter, and I suspect your friend is not a golfer.

[lena green]

Hi Lysos/Wesrae

Thanks for your negative outlook. Please don`t be offended its welcome, in fact its what I thrive on. Lets have a look at costs of the course first.

He has been quoted 120k Sterling a hole owing to site not difficult to remodel...2,160,000 million, with a 13 year payback including all running costs for that time. Sounds horrendous ! However, the whole site falls under the touristic rules. Which is, 'if the planned property owners sign an agreement for 6 months letting over 5 years', 'then there is a grant for the course' in other words, the course will cost nothing.The bank will lend the money to build it knowing the Govt. will pay them back. This is arranged thro` the EU.
Let me clarify which properties I am refering to here, lets not get confused over log cabins. There are 150 villas/apartments here with council options for more.
Total income at 2750 a metre over approx 60,000 metres = 165 million income !! deduct 1000a metre for build costs or 60 million and the the course and running costs become a mere splash in the ocean. So I think we can rule out course costs as prohibitive and clubhouses and everything else associated.

Now, the golfers, to be quite frank, 'who cares who plays' with 100 million profits to date its got built in occupancy as the golf is practically free. When other golfers hear of this, they may well consider not paying 3000 (sharing) a week for local hotels in the high season or paying 4000 a metre on the nearest site for a luxury villa with sky high maintenance costs.

.............and if it is fully occupied with golfers, as I said earlier, the build is limitied to just 25 units. There is room on this land for 1025 units which if built would cause a problem with room only for 200 a day knocking their balls about. So, he limits the build to 200 units. 175 for him and 25 for the investors.

No, he`s not a golfer, just a very astute land owner who also sees a great future in ten top of the range Crown Green Bowling greens.

I don`t think you see the enormity of this concept as compared to the miniscule opportunity offered in terms of profit for all concerned in the early stages, maybe I should have explained differently but thanx anyway, comments much appreciated.

[Lysos]

The eu paying for a golf course to be built !?!. That's a new one on me. You are right, Lena, I don't see the enormity of this concept. I'm asuming your figures are in Euros, so don't know where you get golfers paying 3,000 eurs per week to share a room. A week in a single room in an all inclusive 5 star hotel, 4 rounds of golf on superb courses, chauffeur driven limousine transfers, in Belek, including flights, @ £730. If your friend is astute as you claim, tell him to forget the golf and go with the crown green bowling.