Conventional wisdom suggests that adding facilities to a development project will add value to the development project. This is why many developers spend money to add facilities that they think will enable them to charge more for their property or that will appeal to people who are looking to live in the project. Today on World Tennis Day we ask, what is the reality of this wisdom with respect to tennis facilities.
1. Generic Appeal
At home tennis facilities are often associated with luxury living and they definitely have the ‘cool factor’. They are unquestionably an appealing facility for people to use at a resort and for people looking to rent out their properties are likely to be a draw for prospective holiday tenants or long term tenants. Tennis is the forth most popular sport in the world after football, cricket and hockey. WithDirectory estimate that more than 1.2 billion people play or watch tennis every year. That makes a huge market who at minimum have an interest in tennis. And let’s be honest, anyone can try their hand at tennis – all you need is a tennis racket and balls, a local tennis court and off you go. Even if the initial purchaser of the property isn’t interested in tennis, they are likely to understand the appeal that it provides for future purchasers. This supports the resale market for the property.
2.Cost of Maintenance
Would property owners be willing to contribute to the cost of maintenance of the tennis courts? The answer to this is simply, it depends. If the courts are exclusively for the use of residents and not used for any commercial element then owners are likely to be happy with paying for the full maintenance costs, divided between all the properties in the project. A fear of many property owners is that a dedicated maintenance budget won’t be allocated to the tennis courts and that they will, as a result, fall into disrepair. That being said, if the tennis courts are to be used commercially to generate an income for the resort, then the maintenance costs should be bourne by the business. If the potential purchaser of a property feels that the maintenance burden is too much and unfair based on the usage rights for the courts, this may impact their purchase decision.
3. Cost Value
What value does the provision of tennis courts add to a property. The honest answer to this is a fair one. The cost of the land and the cost of the construction of the courts and a limited initial maintenance to put in a fund should be taken into account this can then be divided between the properties within the development. If developers approach tennis court development as a way to simply add value and don’t use it as a profit mechanism then they are less likely to hit resistance. If the courts will be operated by the resort or external supplier as a customer facility then the ethics of fundamentally having property owners pay for a resort facility which will generate income for the resort needs to be considered. That being said, even access to such a facility comes with a value, and this should be reflected in the overall property valuation.
4. Commercial or Private?
Should the courts be private to the owners or available for commercial leasing or resort use. If the courts are in a resort environment with a linked hotel or serviced rental operation, then operating the tennis courts commercially would be interesting for all involved and could allow for staffing such as tennis coaches and security, thus providing further benefits to owners. Of course, in the case of commercial operation, customers are not likely to be so accepting of the cost having been priced into their property value nor are they likely to accept to pay the utilities and maintenance costs. If the operation of the tennis courts operates at a loss, then the customers are not going to want to be liable for that and the risk is that the courts will fall into disrepair. One way around this is the creation of an owners group who then leaseback the courts to the resort operator. This means that the resort operator will only operate the courts if the business model works and if it doesn’t work then the property owners get the courts back for their own private use. This of course depends on the project location, number of courts, court facilities as well as a number of other factors. Developers should seek prospective tennis partners for an indication of business viability early on in the product development cycle.
5. Rights of Use
If customers have in effect paid for the tennis courts when buying the property and if they contribute in any way to the maintenance of the courts, it can hardly be considered fair that they then pay for use. Rather, rules of use and a booking system needs to be implemented to ensure that one owner cannot hog the court or if the court is a commercially used area, owner slots need to be protected. The key to rights of use is to determine the most equitable method based on the ownership structure before you start selling the development in order that the buyers are clear about their entitlement.
Whether tennis facilities add value to a residential or resort development is dependent upon a range of factors. With the right balance, tennis facilities can enhance demand for both the sale and rentals of properties in residential and resort developments. By determining the way the courts will be used and the rights that owners will have at the outset, developers can leverage tennis courts as a way to add value to their development projects.
Win a tennis racket!!
We want to ask you what you think. Would tennis facilities impact your buying decision? Take part in our survey for your chance to win a tennis racket.
Create your own user feedback survey
Win a tennis racket when you complete our survey. Terms & Conditions apply.
- Survey completions between 23rd February 2017 00:01 and 23rd March 2017 23:59 will be entered into the prize draw.
- Results will be monitored and the winner will be announced on or before 23rd April 2017.
- One entry per household.
- Winners will be advised by email and will have 5 working days to respond.