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Wealthy Americans Choose Luxury Vacation Club Memberships Over Vacation Home Ownership
There was a 30 percent drop in the number of wealthy Americans purchasing second homes in 2007, while more wealthy families, particularly those with children, opted instead for memberships in Luxury Vacation Clubs.
More wealthy families, particularly those with children, find that the single “dream house on the beach” might be great for a while, but eventually boredom sets in, and some family members – particularly the kids -- want variety.
With more luxury vacation clubs catering to families, it’s no wonder wealthy Americans are deciding to forego a difficult mortgage market and uncertain real estate situation in favor of exclusive Destination Clubs, which experienced increases of between six and eight percent in sales last year.
Experts at The Sherpa Report (http://www.sherpareport.com)
“Our clients tell us more families are buying memberships because they’ have realized their kids don’t want to vacation in the same place every year. With a Destination Club, you purchase access to a portfolio of luxury homes that are available to choose from when you’re ready to get away,” says Nick Copley, founder and senior analyst at Sherpa Report.
The variety of properties, which can range from a luxury apartment in Manhattan to an oceanfront villa in the Turks & Caicos or even a ski-in/ski-out chateau in the Rockies, makes the clubs appealing. Unlike owning a private vacation home, the club aspect eliminates your personal responsibility for year-round maintenance on a home that you’ll only use a few weeks a year, Copley says.
Club executives note that even wealthy families are not immune to having children who get bored. No matter how beautiful the view or remote the locale, kids are kids, and by nature they see no real charm in “repetition.”
Destination Clubs are designed to ensure that vacation time spent at one of their properties is just what you’re looking for. Personal service ensures that, whether your family wants to simply relax by the pool or prefers two weeks packed full of activities and excursions, everything is arranged on your behalf. Members arrive to pantries stocked with kid-friendly food, healthy snacks, and amenities like bicycles or strollers procured specifically for family members.
“It’s typical for the concierge staff of a Destination Club to arrange for surfboard rentals in the summer and ski rentals in the winter. Theatre tickets, local tours, and even luxury cars can all be waiting for the family when they arrive,” Copley says.
Real estate professionals in “weekend” or destination locales have long watched the typical vacation home cycle: A family buys a new vacation home and spends lots of time there the first year. Visits drop off in year two, more in year three, until eventually the home is put up for sale.
“Destination Clubs are a good alternative for second home resort property buyers that have young families. The Destination Club allows the younger second home buyer the flexibility to enter the market with less risk and more choices than the traditional second home purchase,” says Judy Pierce, a Texas Broker and Resort Second Home Specialist (RSPS) who is owner of Excite Realty, http://www.exciterealty.com.
To meet increased demand, Destination Club management companies are busy acquiring discounted luxury properties, with some clubs boasting real estate portfolios worth hundreds of millions of dollars.
With the average property in a Destination Club hovering around $3 million in value, the appeal of having access to numerous homes of that class without the time consuming and costly maintenance is easy to understand.
“It takes money to buy in to a Destination Club, but the membership fee is often roughly equivalent to the down payment one would have to make on a multi-million dollar home. Annual membership dues are typically less than the annual upkeep on one home, and yet members typically have between two and six weeks of use per year,” Copley says.
Sherpa Report itself offers a wealth of information for prospective club members who want to know more about the benefits of Destination Club memberships. The site offers a comparison of vacation home and Destination Club ownership on line at http://www.sherpareport.com/
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