Joining a golf club has never been more affordable. Many are slashing or even waiving initiation fees. Others are offering trial memberships that allow newcomers to get in for up to three years just by paying monthly dues. But those deals sometimes reflect dire finances, so before you sign on the dotted line:
REVIEW THE BOOKS
Clubs must provide members with audited financial statements each year. Ask for copies for the past five years. If the club refuses, that could suggest the problems run deep. If they comply, be wary of operating deficits that might portend a future fee hike or "capital call." Also, check how much income the club gets from outside sources such as renting the ballroom for weddings or the course for corporate outings. Under IRS rules, clubs can't generate more than 15% of revenues from outsiders without putting their nonprofit status at risk. If the percentage is rising—starting to bump against the 15% cap—that could signal shortfalls down the road.
Are the fairways spotty, the greens and bunkers losing their shape? Do the electric carts appear overdue for replacement? All are signs the club could be stinting on upkeep to balance its books.
Rival clubs are often eager to dish about the competition. Tour nearby clubs, if only to gather intelligence about the one you're looking to join. Does the club churn through teaching pros? Are its fees out of line with the market? Rivals know.
READ THE FINE PRINT
Some membership contracts run to 70 pages, but scrutinize them to the end. That could prevent nasty surprises, such as waiting months—or years—to recoup your initiation fee if you ever leave.
HOPE FOR THE BEST, BUT...
Some clubs that didn't build up reserves to weather the current storm are imposing capital calls on the remaining membership, either to cover unexpected expenses or service debt. So budget accordingly, in case you're asked to pony up a few thousand on the spot.