A vacation is a necessity, not an option, after months of hard work for busy professionals.
Yet, so often a vacation turns into a burden that you need to recuperate from once you return home. And no one should need a vacation after their vacation.
What if you could have all the benefits of owning a vacation home while experiencing the top-notch service of a luxury 5-star hotel? What if you could just show up at your vacation residence and have everything ready for you and go back home without a second thought for the care of the home you’re leaving behind?
If this sounds appealing to you, then investing in a Private Residence Club (PRC) may just be the solution. PRC’s make luxury home ownership carefree.
What is a Private Residence Club?
A PRC is a high-end option in the fractional market. It provides you with all the services, amenities, and luxury that a 5-star hotel does while giving you ownership and the feeling of being at home.
A private residence club is defined as having a sales price of over $1,000 per sq. ft. Any sales price less then that is considered a Destination Club. View a List of Destination Clubs here.
Just like with fractional property ownership, a Private Residence Club allows you to buy a share of a single residence. The ownership period varies from property to property but is typically expressed as either a fraction, 1/8 or 1/4 up to 1/13.
As far as the law is concerned, PRC’s are considered in the same category as timeshares, which is a good thing since established timeshare laws offer you certain protections.
However, private residence clubs differ from timeshares in that they are in better locations, are more luxurious, and are typically larger. Plus, you get deeded ownership of your residence.
Timeshare properties are usually part of 2, 3, or 4-star resorts or condominiums and offer you one week of ownership in a studio or one or two-bedroom property. PRC’s, on the other hand, are part of 5-star resorts and you have three to thirteen weeks of ownership in a minimum of 3 to 5-bedrooms.
PRC properties are located in prime real estate areas, such as a ski-in, ski-out lodges, or right on a beach or golf course. These residences boast floor plans of 2,000+ square feet and can even go up to a whopping 7,000 square feet. PRC’s are multi-million-dollar properties including the best of the best in terms of design, materials, attention to detail, and luxury. Many PRC’s even have their own private pools, Jacuzzis, gourmet kitchens, and other high-end amenities.
The cost of a private residence club membership can be very high, but they hold their value in most cases – these are exclusive high-end resorts. Only very special properties qualify to be called a “Private Residence Club.”
The prices vary significantly from under $100,000 up to about $3 million. According to Ragatz Associates, the average price of a PRC is around $260,000.
Fractional owners own real estate with a deed and title. Deeded ownership of the property means you can pass it down to your children. PRC’s allow members to rent out their vacation weeks when not needed and some clubs will even rent your ownership for you if you don’t use it, helping to offset the annual fees.
Private Residence Clubs are always affiliated with a top “Fractional Exchange Club” such as The Registry Collection.
A private residence club membership is the way to buy a luxurious vacation home while only paying for the time you will spend in it. The following is a list of additional benefits and perks to consider.
Why Buy a Private Residence Club?
Price and value
The cost of a fractional compared to the full cost of whole ownership is the greatest motivating factor for high-income households to buy a PRC.
Most people with vacation homes find they spend about 3-6 weeks there every year. So why not pay only for the amount of time you’re actually going to use your property?
Relax and don’t worry
One of the most significant benefits a PRC membership offers is owning a vacation home without worrying about the maintenance. Homeowners are aware of the time and money it takes to maintain a home. There is always something that needs to be repaired or refreshed, not to mention the landscaping, gardening, detailing, and so on. Who wants to worry about mowing the lawn or daily housekeeping (even if you pay someone else to do it) while on vacation?
With a PRC membership, all you have to do is show up and enjoy your vacation. At the end of your stay, you simply head home without worrying about the property. There’s no fretting over property taxes and all the other details of homeownership, and you don’t even have to worry about the grocery shopping. Your personal consultant manages all the details for you, so you can enjoy your vacation.
Full-Service 5-Star Style
A private residence club offers you all the benefits and high-class service that a 5-star hotel provides, including a 24-hour concierge and daily maid service. Your home will be thoroughly prepared for you before you even arrive so all you have to do is relax and enjoy your vacation. This preparation is a huge benefit for busy entrepreneurs and professionals.
Imagine having your refrigerator stocked with all your favorite groceries or maybe even have a personal chef on hand. Or how about waking up every morning with your skis tuned and ready to go? Or your golf clubs polished and prepared? You can also take advantage of the concierge to book tee times, theater tickets, spa times, hiking, white water rafting and any other activities you can imagine.
Other services include luxury transport from the airport to your residence, bell service, valet parking, complimentary dry cleaning, and laundry services. As if all of that weren’t enough, PRC’s also offer that personal touch to help your vacation feel like being at home. You have the option to leave personal belongings in storage, and before you even arrive, the staff will press your clothes and put out any personal items or pictures.
The high-level service that a PRC offers make for a truly one-of-a-kind experience
Plush décor and on-site amenities
The properties are furnished with the highest quality in design and construction. Things like custom-made furniture, luxurious fabrics, state-of-the-art entertainment systems, and marble and granite countertops are just some of what you get to enjoy at your PRC residence. According to a Ragatz Associates survey, 90% of PRC owners said that “the quality of finishes and furnishings” was very important to them.
In that same survey, 83% of owners said: “Extent of on-site amenities, activities” was also significant. Imagine walking out of your door right onto a championship golf course, private beach, or using the world-class spa and fitness facility.
These premium perks and decadent details make ownership at a private residence club oh so very appealing.
Choosing Your Private Residence Club
Now you’re convinced you to want a piece of the PRC pie, here are a few important factors to consider when deciding to invest in one.
Without a doubt, the most important factor is location, location, location! Before buying your future vacation home, you should consider a variety of factors which will give you the best possible option for the money you are investing.
High in-demand areas of your future PRC ownership will give you leverage for the investment you make. Popular locations always have a high frequency of visitors, and thus they hold their value better and for longer periods. Another consideration is the possibility of additional locations (if any) that are available for you to use with your PRC membership. Locations of other luxury clubs will provide you with added support regarding long-lasting value. This is because most people considering a PRC membership are experienced travelers and want to vacation in a variety of locations. Premium locations simply hold their value better, which is essential if you decide to sell.
Compare upfront costs to other private residence clubs and resales at the property. For example, you want to know whether the cost of membership is higher or lower than other private residence clubs. Compare the cost of ownership with renting at the resort. You have to evaluate your cost to benefit based on your lifestyle, vacationing habits, and desires.
Know in advance whether the annual fee will increase over time. This annual fee is an ongoing cost that you must pay every year, so it’s important to know if, and by how much, it will increase.
Additionally, find out if there will be future special assessments that cost you money as an owner. This added expense is significant for remodels or construction that is planned for the property. You should take these costs of ownership into account when determining whether PRC ownership will be a wise investment for you, versus renting at the resort.
Do your research! Has the value of previous members’ ownership increased or decreased? Slight decreases are standard, but you don’t want to see massive depreciation. Big decreases in value may mean that your shares will also depreciate rapidly.
Consider the fit, finish, and size of the residence. Will this work for you over a long period of time? Can you bring family or other guests to stay with you? Does the residence accommodate such an arrangement?
After a few years of vacationing at the same property, you might want to exchange your time for different properties around the world. Your young children are now teenagers and desire exotic vacation venues overseas, or have taken up golf or skiing. PRC’s offer various ways to exchange time at your property for time spent at another location. This isn’t always the same system across the board for PRC’s, so research this possibility with the management team of any property you are considering.
Investing in a private residence club is an investment like any other that requires research and good planning. Take your time and exercise due diligence when choosing the best private residential property for you and your family.
Financing a private residence club purchase is treated by mortgage firms as a second-home purchase because their value appreciates over time.
Popular Private Residence Clubs
To help you choose the right private residence club, here are two of the most popular you can look at to have a baseline for your search.
Timbers Resorts is the leader in boutique resorts, private residence clubs, and luxury fractionals in the most sought-after destinations in the world. Timbers Resorts offers experiences to suit all needs including beach, mountain, golf, and leisure destinations. You can find some of their PRC residences in Kauai, U.S. Virgin Islands, Aspen, Vail, Maui, Scottsdale, Napa, Cabo San Lucas, and Tuscany.
The Ritz Carlton Destination Club offers the same exclusive and luxury standards as their hotels in five locations across Colorado, California, and the U.S. Virgin Islands.
You’ve worked hard and earned your success. With a little upfront planning and smart investing, you can experience a luxury vacation in the most desirable resort destinations in the world.