Cashing in: How buying a home in Augusta can pay for itself

Thursday March 23rd, 2017
For local homeowners willing to relocate during Masters week, the population boom represents a lucrative business opportunity, because as the azaleas bloom, so too does the rental market in Augusta, Ga.
Paul Crawford Graphic

Every April tens of thousands of golf fans, corporate bigwigs, media members, and other assorted hangers-on descend upon Augusta, Ga., turning the neighborhoods around Augusta National Golf Club into Masters basecamps. For local homeowners willing to relocate for the week, the population boom represents a lucrative business opportunity, because as the azaleas bloom, so too does the rental market.

My GOLF.com colleagues and I are active participants in this economy. Every Masters week for the last decade or so we've paid a princely sum to pile into the same four-bedroom brick house (basketball hoop included!) on the opposite side of Washington Road from ANGC. While we toil in the press center, our affable renters gleefully sail away on a weeklong cruise.

Good deal, right? More like great deal.

Which got us thinking: Why didn't we buy our own pad?! It would have paid for itself by now! That's not an exaggeration. If we had bought our go-to rental property back in 2000 when, according to Zillow, it sold for just under $150,000, we would have paid off the mortgage by now — and then some — with the amount we would've paid to rent the house for Masters week over that same period.

Which got us thinking some more: Would it still make financial sense today to buy property near the club with the primary goal of covering much of your costs by renting out the house for the Masters?

For this admittedly unscientific study, we identified five properties currently on the market near the club, then cross-referenced them with rental rates on mastershousing.com to ballpark how much each house might fetch for a tournament-week lease. We then deducted that rental fee from the estimated annual mortgage payment to determine what percentage of your mortgage you could expect to cover with your rental windfall. (Sizable amounts, it turns out.)

Mary Lewis, a mortgage loan officer at South State Bank in Augusta, assisted with our calculations. We assumed each property was purchased with a 20% down payment and a 30-year fixed mortgage at a 4.5% interest rate -- a tick higher than you'd likely secure if you lived in the house full-time. Here's what we learned.

Property 1: 1208 Oakdale Rd. (VIEW)

Asking price: $120,000
About: 3 BR/2 Bath, 1,654 sq. ft.
Distance to course: 1 mile
Estimated monthly payment (including taxes and insurance): $662

A fairly typical Augusta home: brick ranch bungalow, three bedrooms, two baths, with an updated kitchen. Most enticing are the ample parking and easy 10-minute walk to Augusta National.

"If you wanted to rent this year-round, it would probably go for $900 a month, which would help you get your money back even faster," says Mason Bennett, the property's listing agent. Either way, you could make about eight months of house payments from Masters week alone.

Estimated Masters week rental fee for this house: $5,000
Percent of annual mortgage payment that fee would cover: 63%

 

Property 2: 423 Wicklow Lane (VIEW)

Asking price: $599,000
About: 3 BR/2 Bath, 2,104 sq. ft.
Distance to course: 0.1 mile
Estimated monthly payment: $2,886

Price-wise, this property is an outlier. Owned by Ron Dunn, a 51-year-old entrepreneur who splits time between Ann Arbor, Mich., and Sarasota, Fla., the house is a seven-iron from Augusta's gates. Dunn bought it three years ago sight unseen for $103,000. He has since spent another $275,000 on renovations with tournament hospitality -- and a lucrative sale -- in mind. Because the asking price is so steep (houses in this neighborhood typically sell for around $150,000), Dunn is seeking a cash deal with a buyer who's willing to roll the dice.

"There's talk that Augusta National is expanding and this is the next neighborhood they'll want to buy," Dunn says. "But it could be three years or longer. There aren't many homes for sale, because people are wondering if Augusta might knock on their door. When Augusta National wants something, they get it."

Estimated Masters week rental fee for this house: Dunn is asking a whopping $45,000, which, despite the house's prime location, is a big ask. There were no takers at press time.
Percent of annual mortgage payment that fee would cover: 116%

 

Property 3: 3003 Vassar Dr. (VIEW)

Asking price: $299,999
About: 5 BR/3 Bath, 3,427 sq. ft.
Distance to course: 3 miles
Estimated monthly payment: $1,463

This is a spacious dwelling in which you could pile in family and friends, and it's an easy 10-minute drive to ANGC. The for-sale ad claims that during the 2016 Masters the house rented for $11,500. No reason to believe that rate will drop.

Estimated Masters week rental fee: $11,500
Percent of annual mortgage payment that fee would cover: 66%

 

Property 4: 591 Medinah Dr. (VIEW)

Asking price: $594,900
About: 5 BR/4 Bath, 4,682 sq. ft.
Distance to course: 5.5 miles
Estimated monthly payment: $3,010

Here's a stately pad for high-rollers, in the heart of the West Lake golf community and a 20-minute drive to ANGC. The gated neighborhood is a popular rental spot for players. This investment may be too steep to turn a profit, but if you're looking to live comfortably in Augusta and don't mind clearing out during the Masters, the rental income will make nice dent in those mortgage payments – or your country club dues.

Estimated Masters week rental fee: $12,000
Percent of annual mortgage payment the fee would cover: 33%

 

Property 5: 2409 Apricot Lane (VIEW)

Asking price: $109,900
About: 4 BR/2 Bath, 1,962 Sq. Ft
Distance to course: 1 mile
Estimated monthly payment: $610

At last, a home that offers profit-making potential from Masters week alone. It's a 15-minute walk to the course, and near the Oakdale property highlighted above. But in addition to the lower sale price, it could command more rent thanks to that fourth bedroom.

Estimated Masters week rental fee: $7,500
Percent of annual mortgage payment that fee would cover: 102%

 

So…ready to invest?

If you're considering a plunge into the Augusta rental market, it's worth noting that area schools and colleges schedule their respective spring breaks during Masters week. It's common for landlords to ask existing tenants to clear out, in exchange for a free month of rent, to swap in a group of patrons. (If you've rented to a student or school employee, they might be happy to take a vacation.) Each home listed above has serious profit-making potential if you find tenants for the other 51 weeks.

And here one's final tip: You'd be wise to find a renter who makes an annual Masters pilgrimage and with whom you can develop some trust.

"Once you get the perfect fit, it's a slam-dunk they'll come back next year," Dunn says. "I've had people who wanted it for part of the week, but I passed on the deal because I want to get the right people in there and build a relationship. People like familiarity, and so do I."

Any why not? Come Masters week, it can pay big dividends.

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