Passive Income With a Driving Range

Passive Income With a Driving Range

If you know me at all, you know that I love to play golf. I don’t get out as much as I used to, but it’s still fun to get out and chase that white ball around for a while. Now, I do enjoy playing golf very much, but I also enjoy scoring well (I’m a little competitive), so to get my practice in, I often attend the local driving range.

The Passive Income Set-up

This past summer, my brother and I went to a new driving range, and it took us a few minutes to figure out the whole operation. At the usual range, there was an attendant that took the money, handed out the balls, and got in the golf ball picker once in a while to refresh the stock.

At this new driving range, there was absolutely no booth for an employee to sit. Instead, there was a token machine and a golf-ball dispenser. So, I inserted my $5 and out popped my token. I then grabbed a basket, put it in the next machine and inserted the token – in no time flat I had my basket of balls and I was off to hit some balls.

The only employment this business needed was someone to give the range a quick mow, to move the ropes, and to pick up the balls at night and load them back into the machine.

Crunch the Numbers

This sounds like a pretty slick passive income operation doesn’t it? Well, let’s find out. It’s time to crunch the numbers.

Fixed Costs

The big expense is obviously the land. In my area, I could buy a 15 acre plot of land for $100,000, but I understand that land is cheap here, so let’s say it would cost $200,000. Add the ball-retriever ($5,000), golf ball dispenser ($5,000), and token dispenser ($3,000), and lawn-mower ($3,000) and we’re looking at an initial investment of $216,000.

Variable Costs

The costs that’ll keep on coming will be the employment ($30/day) and the maintenance of the range (property tax, machinery, grass seed, water, flag sticks, etc.). I estimate a yearly expense of $15,000.

Income Per Golfer

At most driving ranges a basket of balls will cost about $6. I’d say that on average, each range will see at least 20 golfers per day, which would yield a revenue of $120 a day, which equates to $3,600 a month.

In my area of the U.S., a driving range can only be open for about 6 months, so the expected revenue for the year is $21,600.

The Final Numbers

After the large investment of $200,000, the driving range business isn’t all it’s cracked up to be. While it is quite passive, the yearly income (after expenses) is only $6,600 before income tax. It would take about 50 years to recoup the initial investment!

For me, I could buy the land for cheaper – somewhere around $100,000, and if I could average 50 golfers a day instead of my estimated 20 golfers, then I could recoup my initial investment in about 4 years! Hmmm… I think it might be time to open up a driving range! :)

Have you ever thought about opening up a driving range for passive income? Would it be worth it for you to try in your area, or is land too expensive?

14 Responses to Passive Income With a Driving Range

  1. Interesting analysis – I had never even thought of seeing a driving range as a passive income source. The only thing you didn’t include possible for income was sales of merchandise eventually – clubs, bags, shirts, hats, etc.

    • Derek says:

      You’re right Kirk, I didn’t mention that, but it would be tough to sell shirt and hats etc. if there were noemployees present (remember the range is being run by a couple of machines). Do you think that the cost of an employee would be offset by selling merchandise and stuff?

  2. Hank says:

    I’ve been toying around with this idea for years. This is one business that I’m dying to open and plan to in retirement. While I’m lucky to live in the south with respect to weather and 365 days of operations, I’ve found that land prices for 10 to 15 acres in a location that will receive traffic such as 20 to 50 golfers a day is more than the $100,000 to $200,000.

    • Derek says:

      I’ve been looking at it for quite a while too! I wouldn’t mind being on the range working though. I could sell some stuff, blog in my little clubhouse, and even swing some clubs once in a while! Sounds pretty relaxing to me. :)

      • Bob Shaw says:

        As someone who already owns a range, I would advise you to not build one, but to look for one already in existence. Many retirees have spent their life savings to build a range, only to find that in order to do it right, there’s about 80 hours per week of work to do. If you think that you can just plop a couple machines in the middle of a field, and sit back and collect the money, you’ll go the same way as the poor bastards that spent all of their savings. With that being said, if you are looking for something to really work on, I’d find one of those poor bastards, and buy their range from them and do it right. Man the shop (at all times- there’s still something to be said about interacting with your customers. Keep the property clean- treat it as if you were running a little golf course (nobody would golf at a place that’s not well kept). Keep the hours convenient to your customers (9am-dusk), which means they will be inconvenient as hell to you. The last thing is to forget about playing golf, yourself. If the weather’s nice enough for you to be playing golf, then you need to be working. The moral of the story is: if you want to make money with a range, you’ve got to be willing to do everything that the other range owners in your area can’t/won’t do. If you are willing to do that, there is a fair bit of money to be made. Hope this helps.

  3. I think running a driving range for passive income would be a little difficult during poor economic times. I have seen several in my area shut down.

  4. If I had to choose between paying 200k for a 6k return (and no time invested to maintain it) or to work 5 hours a week on a blog that could make 10k (or even the same amount of 6k) per year, I would choose the latter. :)

    • Derek says:

      I hear ya there! I’m still going to look into it for the future though. If I could buy some cheap land, it could be worth my while.

  5. James Petzke says:

    This seems like it could be a potentially great passive income to me, I’m going to look into it for my area. What about a whole golf course? Maybe consider looking into that.

  6. [...] you recall, I wrote an article called, “Passive Income With a Driving Range” a few weeks ago. Never did I think that I’d be given the opportunity to do so in the [...]

  7. Yes, It’s good and profitable business. Any one can earn a lot of money doing this business.

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