Why You May Not Want to Buy a House in a Golf Course Neighborhood

Golf course neighborhoods can seem like a really attractive place to live -- especially if you love to golf. In fact, many people are willing to get a larger mortgage and pay a premium to live on the golf course where they can enjoy the attractive views and play a few holes whenever they want.

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But before you buy a house in a neighborhood attached to a golf course, it's important to consider the potential downsides and risk of making this choice.

Here's the big problem with golf course neighborhoods

When you buy a house in a neighborhood with a golf course, there's a big risk involved that you may not think about. The big issue is, what happens if the golf course closes?

More courses have been closing in the United States than opening since 2005, and participation in the sport is waning. If a golf course fails in a neighborhood, property values could decline substantially, with data suggesting that the value of surrounding houses typically experience around a 10% to 50% decline depending on the market where they are located.

A dispute could also arise over exactly what should happen to the land that the golf course is on. This has resulted in lawsuits when buyers of the failed courses have wanted to reboot the property into other things. And some owners of "golf course" properties have found themselves instead living next to more single-family houses or even next to large apartment complexes.

For those who wanted to be on a golf course, suddenly living next to a huge multi-family dwelling would be a major change of lifestyle -- not to mention one where their property would likely be worth a lot less going forward.

Should you buy a house in a golf course neighborhood anyway?

Not every golf course is going to fail, obviously. And there will always be demand for homes in golf communities because the lifestyle can be very pleasant when things go right.

The key is, it's important to do your research. If you can, find out how long the golf course has been operational, who owns it, whether it is profitable, and whether there are any potential threats of a course closure in the future. It can sometimes be difficult and time consuming to research these issues, so you may need to ask for help from your real estate agent.

You can also check into zoning laws to see what kinds of development might be permitted in the area should the course close. Of course, people can get variances and develop properties even if the zoning may say that the specific type of development is forbidden -- but zoning rules can provide at least some protection.

If you choose a very established neighborhood with a thriving course, then you may be in the clear. But if there are any signs that there's trouble or that the course's future is at risk, you may want to steer clear so you don't find yourself dealing with a bad situation if the course near you becomes the next one to close its doors.