Negotiating private club initiation fees; good idea or tacky move?

[klebs01]

1 hour ago, 2bGood said:

Makes sense. Easy to make that work then. Are a super exclusive club with high fees or rural club with low costs?

300 seems like a full club if they only have 18 holes. That’s a typical cap in my area though still needs tee times. My current club just went to tee times this year, though it’s capped at 195. 

[Robber6656]

11 hours ago, ND2005 said:

And here the 6 ish people I know who have joined clubs this year have been able to get in for under “asking price” even at courses with substantial waitlists…

 

I think the responses here have been a little dogmatic so far 

That makes no sense whatsoever. 

[Robber6656]

8 hours ago, klebs01 said:

300 seems like a full club if they only have 18 holes. That’s a typical cap in my area though still needs tee times. My current club just went to tee times this year, though it’s capped at 195. 

Full with a waiting list. BTW Oak Hill Country Club has 900 members 36 holes and no tee times. 

[jvincent]

It's not really the number of members that matters, but the number of active members.

[Abh159]

29 minutes ago, jvincent said:

It's not really the number of members that matters, but the number of active members.

 

This is the key. I know of a few clubs that don't have tee times. Both just have 18 holes. One has a 200 member cap and the other is 400+.

 

However, neither has more than 75-100 members who actively play on a regular basis. Even less so during the week. I've been to both on a weekday with perfect weather and I only saw one other group the entire time I was there. 

[Whisspy]

19 hours ago, Robber6656 said:

Members can’t sell their membership at almost all clubs. If it was only that simple.

Every club my friends / family belong to in CA have been able to sell their individual memberships if they didn't want to be part of the club anymore.  Must be pretty tight where you are.

[Pepperturbo]

To the OP, negotiating initiation fees is possible at clubs in certain limited areas.  All depends on how many members the club charter stipulates, the financial condition of the club and the financial condition of its investors.  Average clubs have 400 members, charter might allow 500.  Supply and Demand affects private clubs too. 

 

All our membership research says those types of clubs tend to be on the lower end of the private club spectrum and in limited population areas.  Not possible at any of the private clubs we have been visiting and playing. 

 

Also, negotiating is like negotiating car price.  A person has to be willing to walk away if the seller says nope.  Also, if accepted not care how you're seen if the word gets out among members. 

 

Selling memberships depends on whether the club has a selling list and how many are on the list, and that list can take as much as 1-4yrs depending on demand, to sell memberships.  Clubs typically alternate one member resell to one club membership.

Edited December 15, 2021 by Pepperturbo

[Robber6656]

2 hours ago, Whisspy said:

Every club my friends / family belong to in CA have been able to sell their individual memberships if they didn't want to be part of the club anymore.  Must be pretty tight where you are.

I would love to know a club you can sell your membership at. If a club allowed that they would never get any new capital funds. I live in Rochester NY. The Biggest clubs in town. Oak Hill (top 100 in world), CC of Rochester, and Monroe CC. None of which can you sell your membership. 

 

There is a difference between an initiation fee and a bond. Maybe there is were the disconnect is. Fiddlers Creek in Naples is going private and has a $150,000 equity membership. The developer is trying to get out. In theory the $150,000 is refundable. I don't think it's sellable. 

Edited December 15, 2021 by Robber6656

[2bGood]

17 hours ago, Robber6656 said:

I would love to know a club you can sell your membership at. If a club allowed that they would never get any new capital funds. I live in Rochester NY. The Biggest clubs in town. Oak Hill (top 100 in world), CC of Rochester, and Monroe CC. None of which can you sell your membership. 

 

There is a difference between an initiation fee and a bond. Maybe there is were the disconnect is. Fiddlers Creek in Naples is going private and has a $150,000 equity membership. The developer is trying to get out. In theory the $150,000 is refundable. I don't think it's sellable. 

It is not too common anymore but it is the equity based membership model. Everyone owns a piece of the club and can sell that piece to a new member or back to the club depending on the rules.

 

Funny thing if there was no one wanting to buy your portion of the club it might not be so easy to walk away.

 

These days allot of clubs have moved to ongoing monthly capital dues in addition to regular dues to allow for better capital planning than entrance fees. 

Edited December 16, 2021 by 2bGood

[Bonneville85308]

The great recession proved the unsustainability of the "you can't get out until you are replaced-equity membership" model at all but the top clubs. In many cases you had dozens, if not hundreds of people at a particular club that wanted to get out, stop paying dues, and get their initiation fees refunded. Problem was that there were few people who wanted to join to replace them, and certainly not at the same high initiation fee rates that the members wanting to depart paid. At the same time, the club boards didn't want to have to pay anything to the departing members, or stop their dues from coming in, despite promises years prior. So in some instances, they came up with new membership categories for new members, such that they could claim there were no new members joining in the categories of the members who wanted to depart, so the "1 in, 1 out" initiation fee refund scheme didn't apply. What a mess. This model seemed to be primarily a west coast thing.

At the northeast US clubs I am familiar with, initiation fees generally aren't refundable under any circumstances, but you can quit the club and stop paying dues on fairly short notice. You don't need to wait to be replaced by a new member. If you want to leave, you give the required notice and leave, your dues end and you forfeit any voting or equity rights. Your "equity" in the club really only means something if the club goes out of business and the sale value of the assets exceeds the club's liabilities. Then, you might get a share of the excess proceeds.

Edited December 15, 2021 by Bonneville85308

[Robber6656]

47 minutes ago, 2bGood said:

It is not too common anymore but it is the equity based membership model. Everyone owns a piece of the club and can sell that piece to a new member or back to the club depending on the rules.

 

Funny thing if there was no one wanting to buy you portion of the club it might not be so easy to walk away.

 

These days allot of clubs have moved to ongoing monthly capital dues in addition to regular dues to allow for better capital planning than entrance fees. 

 
Just talked to someone who would know and he said it’s actually fairly common. 

Edited December 15, 2021 by Robber6656

[Golfnuck]

1 hour ago, Robber6656 said:

 
Just talked to someone who would know and he said it’s actually fairly common. 

 

The concept of an equity club is much more common in the USA than in Canada.

 

In my entire Province of BC there is not one single private club that is of the equity model (not that there are a lot of private clubs in BC .... LOL).

 

The only one that was close was the original Swan-e-set Golf Club in the suburbs of Vancouver (where Happy Gilmour was filmed plus a myriad of Hallmark flicks).  They had an offer to some of  the initial members that after 20 years they could get their original initiation fee back under certain conditions.  The course had 36 holes and 18 was supposed to be private.

 

Now it is a shell of its former glory and all 36 holes are public access but there are still "members" paying monthly dues?????

[vallygolf]

14 hours ago, Robber6656 said:

 
Just talked to someone who would know and he said it’s actually fairly common. 

Curious if you could name a few clubs, sounds interesting.

[Superbrit]

As a brit i dont really know what an initiation fee is, im presuming its the same as what we call a joining fee

 

So if your initiation fee is say $100k (which is mind boggling in itself!) do you then pay monthly dues on top of that?

 

 

[david.c.w]

14 hours ago, Robber6656 said:

 
Just talked to someone who would know and he said it’s actually fairly common. 

 I believe the equity model is generally phasing out, with the possible exception of national clubs.  I have a buddy on a 2 year wait for a prominent national club in the SE, and he is waiting on someone to leave and is not 100% sure what the fee will be.  Everyone else I know is on a non-equity, but member owned club.  There are a few clubs around with single owners who bought the clubs out of near bankruptcy.

 

I do believe many (or most) country clubs these days have a capital charge on the monthly bill in addition to the dues.  Our is currently at $75/month.

[jvincent]

15 minutes ago, Superbrit said:

As a brit i dont really know what an initiation fee is, im presuming its the same as what we call a joining fee

 

So if your initiation fee is say $100k (which is mind boggling in itself!) do you then pay monthly dues on top of that?

 

 

Yes, there are monthlies on top of the initiation.

 

The membership model is very different in the US than the UK.

[Superbrit]

1 minute ago, jvincent said:

Yes, there are monthlies on top of the initiation.

 

The membership model is very different in the US than the UK.

And roughly what would they be, you know after paying $100k!

 

Yes very different, thank god!

[jvincent]

20 minutes ago, Superbrit said:

And roughly what would they be, you know after paying $100k!

 

Yes very different, thank god!

 

Monthlies vary quite a bit depending on where the club is, how exclusive, etc.

[david.c.w]

9 minutes ago, Superbrit said:

As a brit i dont really know what an initiation fee is, im presuming its the same as what we call a joining fee

 

So if your initiation fee is say $100k (which is mind boggling in itself!) do you then pay monthly dues on top of that?

 

 

 

This is where we get into the difference between golf club and country club, and then clubs in the US vs. the rest of the world.

 

FWIW, I am at what is considered a tier 2  country club the southeastern US.

 

Initiation is well north of $50k and my average monthly bill hovers around $1,300.  About half of the bill is discretionary spending.  That may seem like a lot, but here is much more behind just the golf.   We are a true country club and the golf is just a part of the membership experience.

 

Where else does the money go?

• 14 tennis courts with brand new LED lighting
• 4 tennis pros who run all kinds of events
• 5 golf pros
• Simulator room for fun
• Trackman room for lessons and fittings
• 300 person ballroom for member events or weddings
• Men's locker room with 500 lockers and full time staff
• Men's lounge with bar and 2 full time staff (seats 100)
• Women's locker room with 200 lockers and part time staff
• 4 private rooms for events or meetings
• Wellness center with 100+ pieces of cardio/weight equipment
• 3 personal trainers and wellness director
• 2 wellness classrooms for spin/yoga/Pilates or whatever
• 6 lane Swimming pool with diving well and 2 diving boards
• Summer swim lessons and swim and dive team for kids
• Swimming pool snack bar and adult bar
• Social director who runs wine dinners, beer tastings, holiday dances, Santa pictures, concerts on the range, 4th of July fireworks, fall festival, Easter egg hunts, mothers day brunch and a million other things.

The club is the core of the social and sport scene for men, women and younger kids.  I am at the club on average 6 days a week:  1 or 2 for golf, 1 or 2 for tennis, 3 for exercise.  If i was paying all that money and only going twice a month, it would not make sense.  But the club has so much to offer, many of us take advantage, not just to "get our money's worth", but because the experience is wonderful.  As a point of reference, there is probably somewhere around 100 full time staff.  I think about 40 of them are grounds related.

 

Expensive?  Yes. 

Worth it?  For me, definitely. 

[Superbrit]

8 minutes ago, david.c.w said:

 

This is where we get into the difference between golf club and country club, and then clubs in the US vs. the rest of the world.

 

FWIW, I am at what is considered a tier 2  country club the southeastern US.

 

Initiation is well north of $50k and my average monthly bill hovers around $1,300.  About half of the bill is discretionary spending.  That may seem like a lot, but here is much more behind just the golf.   We are a true country club and the golf is just a part of the membership experience.

 

Where else does the money go?

• 14 tennis courts with brand new LED lighting
• 4 tennis pros who run all kinds of events
• 5 golf pros
• Simulator room for fun
• Trackman room for lessons and fittings
• 300 person ballroom for member events or weddings
• Men's locker room with 500 lockers and full time staff
• Men's lounge with bar and 2 full time staff (seats 100)
• Women's locker room with 200 lockers and part time staff
• 4 private rooms for events or meetings
• Wellness center with 100+ pieces of cardio/weight equipment
• 3 personal trainers and wellness director
• 2 wellness classrooms for spin/yoga/Pilates or whatever
• 6 lane Swimming pool with diving well and 2 diving boards
• Summer swim lessons and swim and dive team for kids
• Swimming pool snack bar and adult bar
• Social director who runs wine dinners, beer tastings, holiday dances, Santa pictures, concerts on the range, 4th of July fireworks, fall festival, Easter egg hunts, mothers day brunch and a million other things.

The club is the core of the social and sport scene for men, women and younger kids.  I am at the club on average 6 days a week:  1 or 2 for golf, 1 or 2 for tennis, 3 for exercise.  If i was paying all that money and only going twice a month, it would not make sense.  But the club has so much to offer, many of us take advantage, not just to "get our money's worth", but because the experience is wonderful.  As a point of reference, there is probably somewhere around 100 full time staff.  I think about 40 of them are grounds related.

 

Expensive?  Yes. 

Worth it?  For me, definitely. 

It all sounds very nice, but for a min of $60k a year, not so sure about that, but if you can afford it

 

 

 

 

 

 

[KBong]

47 minutes ago, Superbrit said:

And roughly what would they be, you know after paying $100k!

 

Yes very different, thank god!

Typically anywhere between $500-$1200+.

Plus other incidentals on top of this....locker rm charge, capital improvement, etc etc

Then one has a F&B minimum per quarter....it will vary....again anywhere from $500-$2000+ per quarter.

[doctorgriffo]

1 hour ago, Superbrit said:

As a brit i dont really know what an initiation fee is, im presuming its the same as what we call a joining fee

 

So if your initiation fee is say $100k (which is mind boggling in itself!) do you then pay monthly dues on top of that?

 

 

As someone who grew up in the UK and moved to the US in my 30s, the difference is mind boggling. As mentioned above, the difference is mostly the scale - most golf clubs in the UK offer a golf course and some kind of practice area, but here you pay for swimming pools, tennis courts, and a bunch of other facilities. I have lived in CA and OR and in both places there wasn't a purely private course that was golf only at an affordable price - for comparison, my dad pays 600 quid a year for his membership, with no public play, and I pay more than that a month on top of in initial initiation fee. I looked up all the "high end" courses around the UK and the most well-known seem to charge no more than 3000 gbp a year. Membership here is for the family, and includes access to all the facilities, but it is mostly just me playing golf (and my son, who could play pretty much any course on the Monterey peninsula for $5 with his youth on course card). The thing I found most frustrating when I moved here was that you can join as a social member, with much lower initiation and dues, or a full member with access to everything plus golf, but you can't just be a golf member - I have no interest in any other element of the club other than the golf, so am paying for tennis, bocce courts, live bands playing Eagles covers on a friday, and all sorts of social events I have absolutely no desire to ever use or participate in.

[2bGood]

16 hours ago, Robber6656 said:

 
Just talked to someone who would know and he said it’s actually fairly common. 

I guess it depends on the sample size. I have lived around the world, but mainly in the UK, US and Canada and have rarely come across this model. But clubs come in all shapes, sizes and model. 

[vandyfan]

Further on the whole golf club vs country club is the tier of country club. The nicer clubs that require 5+ active members to sponsor/vouch for you + a member lunch where you meet other members + letters of recommendation, etc. To me, that is a high level club and if you come into there and try to look for a deal you're probably not getting in. If we are just talking about a club where you have the initiation fee and you get on a waitlist then sure...do whatever you want. But for a high end club I would think you would be jeopardizing your chances of being accepted by trying to save some money on the front end. Don't get me wrong, anyone would love to turn a $100k initiation fee into $75k but you're not going to look very good during a point where they can easily black ball you right there.

[Superbrit]

12 minutes ago, doctorgriffo said:

As someone who grew up in the UK and moved to the US in my 30s, the difference is mind boggling. As mentioned above, the difference is mostly the scale - most golf clubs in the UK offer a golf course and some kind of practice area, but here you pay for swimming pools, tennis courts, and a bunch of other facilities. I have lived in CA and OR and in both places there wasn't a purely private course that was golf only at an affordable price - for comparison, my dad pays 600 quid a year for his membership, with no public play, and I pay more than that a month on top of in initial initiation fee. I looked up all the "high end" courses around the UK and the most well-known seem to charge no more than 3000 gbp a year. Membership here is for the family, and includes access to all the facilities, but it is mostly just me playing golf (and my son, who could play pretty much any course on the Monterey peninsula for $5 with his youth on course card). The thing I found most frustrating when I moved here was that you can join as a social member, with much lower initiation and dues, or a full member with access to everything plus golf, but you can't just be a golf member - I have no interest in any other element of the club other than the golf, so am paying for tennis, bocce courts, live bands playing Eagles covers on a friday, and all sorts of social events I have absolutely no desire to ever use or participate in.

With them sorts of fees i dont think i would play, or should i say i wouldnt be a member, it definitely would annoy me if i was paying for all the other stuff and all i wanted to do was play golf

 

My club has 2 x 18 hole golf courses, 1 x 9 hole par 3 course, some practice facilities, full gym and sauna (apparently its really nice) all for £140 a month, with NO joining/initiation fees

 

 

 

 

[vandyfan]

The UK model for private courses is excellent. I wish it could be that simple here in the US. But, to me in my town I don't think you could do it that way because land values are so astronomically high it wouldn't make financial sense for the club. If you could bring in enough members to justify the use of land I don't imagine anyone could get tee times on the weekends. Maybe someone can explain it better or tell me I am wrong. 

 

I speak out of both sides of my mouth because I don't love ultra exclusive US privates but also totally get why they exist and continue to flourish. I lived in London for several years and luxury just isn't as much of a part of the culture there (at least for us working folk). People seemed to get by with less, got paid less (vs New York) and didn't take work quite as seriously. I think if I hadn't had children I might still be over there....

[Rory4Pres]

I looked at joining our local country club not too long ago.  I'm all about the golf and golf course, all the other country club stuff really doesn't matter to me.  I don't care how the clubhouse looks, who is a member, how rich anybody is, exclusivity, etc...  Long story short, I was really turned off when I found out the seniors got a 45% discount on their membership rates (guess who must run the board).  So the younger members, who still work for a living and are just looking to play 2-3 rounds a week pay full price while the seniors get nearly half off with their money that has compounded for the past 30-50 years.  I'm guessing a lot of the seniors average 5 to 7 rounds a week.  

 

Joined a public course that I'm told by a member (who is retired and belongs to both) is nicer/better layout than the country club and I've been very happy with it ever sense.  

 

It's really, simply all about supply and demand in your local area.

[dodger]

I joined a private club in 1999 for an initiation fee of 10k. Five years later was playing with guys that joined for a thousand bucks. Club is now a housing development. Buy high and sell low does not work well in anything, particularly golf clubs. If the initiation is too low, future success of the club and funding might be an issue, even if they have 300 members. 

[ryder2015]

The equity based membership is fairly popular in certain areas of the US. I have been researching joining another club in a different state and most seem to be equity based and what that means seems to vary from club to club. Most of them you can sell your membership at a rate determined by the club and the club retains a portion as a transfer fee. That fee varies from club to club 30% to 65% is what I have seen.  I did come across one that is market based meaning you can sell you membership to the highest approved bidder basically and the club retains a % of the sale price. The issue with that is when you can sell your membership for a large profit the club is going to have a high rate of turnover that they can not control. This club had a recent sale of 3x  the purchase price of less than 2 years ago. Have seen another club actually buying back memberships to decrease the number of members. They could easily double their fee but won't because they do not want members leaving for a profit. Crazy times for clubs right now. 

[david.c.w]

30 minutes ago, Superbrit said:

With them sorts of fees i dont think i would play, or should i say i wouldnt be a member, it definitely would annoy me if i was paying for all the other stuff and all i wanted to do was play golf

 

My club has 2 x 18 hole golf courses, 1 x 9 hole par 3 course, some practice facilities, full gym and sauna (apparently its really nice) all for £140 a month, with NO joining/initiation fees

 

 

 

 

 

While I am not going to say it is right or wrong, the overwhelming club trend in the US is to turn old school golf clubs into the core of the family experience with dining/tennis/pool/wellness.  This is backed by industry research, not just my thoughts.  Having just a golf course just does not cut it anymore.  This is true both regionally and nationally.  Yes there are plenty of top 100 courses that don't fall into this category.  But more and more "regular" clubs are trending this way.