All You Need to Know About Destination Clubs and Residence Clubs

Fractional ownership began as a term associated with the aviation industry.  In the late 1990’s, the trend of multiple people owning shares in the same jet plane became popular.  It allowed people to afford something they otherwise wouldn’t have been able to, and to use it only when they needed it.  In fact, the concept became so popular it spread to other sectors, including luxury cars and even real estate.  Today, fractional ownership in real estate is the fastest growing sector of the high-end market, and is better known as single-site Private Residence Clubs.

At a Private Residence Club you buy a share of the actual property.  The overall development has multiple residences which you get to use for a period of time each year based on the size of the share you purchased.  In a Private Residence Club, you get to take advantage of the benefits of deeded real estate ownership.  The price varies depending on the type of residence you want to buy a share of and the number of weeks you want each year.

One of the greatest upsides to the single-site model is the familiarity you gain with the property and area.  Going to your vacation home becomes a treasured ritual, and when you get there, it’s like going home.  You know exactly how everything works, you know where everything is, and you know the best spot to get dinner when you want to go out.  Time assignments are decided according to two systems, points or a tightly regimented schedule.  On the points system, you get a certain allotment of points every year to spend.  Certain highly coveted times of the year cost more than others, Memorial Day versus winter for example.  In a scheduled system, you would receive the same amount of time as everyone else, typically rotating during the year, so no one owner had the same times year after year.

According to Luxury Living magazine some of the top Residence Clubs include, Old Greenwood, The Residences at Little Nell, The Roaring Fork Club, The Porches, and Seven Canyons.

In contrast to Private Residence Clubs, multiple-site Destination Clubs are suited for those people who do not want to be tied down to one spot.  In most cases, you pay a membership fee and yearly dues based on the number of weeks you want to use the club’s portfolio of locations each year.  Some companies, such as Private Escapes, offers unlimited stays, dependent on availability of course.  There are some Destination Clubs which cater to certain interests and have developed a portfolio of properties specializing in anything from real estate in great wine regions to the ever popular golf course homes.

Destination Clubs are popular because most of the properties have concierge services, which help you focus on the fun parts of your vacation  And you get to stay in some of the most luxurious properties in the world, which otherwise would be inaccessible to you!  It’s more akin to high-end resort travel.  One of the downsides of Destination Clubs is that, unlike Private Residence Clubs, Destination Clubs can not be viewed as an equity investment.  You do not own any part of the property.  If you wish to cancel your membership, your refund will typically be 80 to 90 percent of your membership fee, but it’s based on the length of time you’ve been a member.  Make sure you ask if there’s any requirement as to the number of shares sold in the club, before they will refund your membership fees.  According to Luxury Living magazine, some of the top destination clubs include, Yellowstone Club World, Solstice, Timbers Resorts, Quintess, and Ultimate Resort.

These clubs are not like the timeshare properties we’re all familiar with.  These are very upscale resorts with diverse, luxurious amenities.  The classic timeshare properties are not as flexible as to when you can use your weeks, and are not as “liquid” when you want to sell them.

Destination Clubs and Private Residence Clubs provide exquisitely furnished, high-end properties that are usually located at popular resort destinations.  Depending on the property, they provide the same personal concierge service and lavish amenities you would expect to find at a five-star resort or exclusive country club.  They usually have a spa, gourmet restaurants, upscale shops and an extensive fitness center.  Most clubs allow the purchase of extra weeks, should you want to take a little more vacation time this year!

Both offer the undeniable advantage of not being responsible for the maintenance of the property.  When you visit, you enjoy a home perfectly maintained by a management company, and you’re free to fully enjoy your vacation time and leave with nothing to worry about.  And best of all, you don’t have the added responsibilities that come with owning a second home.

Regardless of what option you choose, consulting an attorney specializing in the field is a must.  Both types of clubs are increasing at a rapid rate, with new companies starting all the time.  Investigate the company you choose to work with, as some are more financially solvent than others.  Check to see if most of their holdings are owned, or leased.  Some great websites to visit in your research include, www.lawyers.com, www.fractionalforum.com, and www.destinationclubs.org.

Owning a share in either club is a great way to ensure you spend your vacation time enjoying your vacation rather than taking care of a second home.

About the Author

Bob  Bencivenga is a professional site locator and location anyalyst for major corporations and been researching the growth of NC and SC to find those areas which are affordable. Visit his blog-The Carolina Report and signup free to  get blog updates by email, along with free advice on how to relocate or retire in the Carolinas, additional resources, and a lot more!  Go now to www.placesofvalue.com.  Bob does not sell real estate.

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