Private Residence Clubs – "The Vacation Home Alternative"

While vacation homebuyers have for decades shared the ownership and use of second homes to defray costs, it is only recently that this arrangement has been expedited through the formation of Private Residence Clubs.

Click Here To See a Directory of Private Residence Clubs

These luxury properties, located in elite enclaves such as Aspen, Colorado or Sun Valley, Idaho, have taken the hassle out of vacation home ownership and provided an attractive alternative to wholly-owned second homes at a fraction of the cost.

Not to be confused with a timeshare or a typical vacation ownership plan, which is basically a renewable vacation, a Private Residence Club is a real estate investment with flexibility of use that models single-home ownership. With Private Residence Clubs, the buyer has an expectation of value and price appreciation.

Membership functions like that of a private equity golf and country club. The level of social interaction and pattern of use can be chosen to best fit the needs of the individual members. Amenities abound, with recreational, dining and shopping options that rival five-star resorts. And comparable to joint ownership of jet aircraft, the maintenance costs and use of an expensive asset is shared.

For example, a one-eighth share of a $2 million luxury home is purchased for $250,000. Each owner receives four weeks of guaranteed time during prime season, to be reserved six months in advance. Owners can book the weeks they want on first, second and third choice basis.

The home is guaranteed to the eight owners for a total 32 weeks. The remaining 20 weeks of the year are "open access" time when any owner can make a reservation at no additional charge. This allows owners to obtain several weeks of extra time as their individual schedules permit.

Private Residence Clubs address a previously unmet need at a price that is affordable to a much broader segment of the market. As consumer awareness increases and the industry matures, more and more buyers will be drawn to this concept and reap the benefits of a second home without the hassles and price tag of sole ownership.

Click Here To See a Directory of Private Residence Clubs

This article was written by Wallace Hobson, President of Hobson Ferrarini Associates in Portland, Oregon, is a leading international expert in Private Residence Clubs, having completed more than 50 assignments for Private Residence Clubs throughout the world. He is a member of the Counselors of Real Estate and specializes in the resort industry.