# Second Home Ownership versus Timeshares, Destination Clubs and Private Residence Club



## TarheelTraveler (Aug 4, 2010)

Pretty good article in the NY Times on why buying a second home is often not the right choice.  Specifically, mentions timeshares and private residence clubs as an alternative.

http://www.nytimes.com/2010/07/24/business/24wealth.html?pagewanted=2&_r=1

Personally, I'll take my DC membership over a second home anyday.


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## Kagehitokiri2 (Aug 4, 2010)

i would invest in real estate, but i have no interest in buying something other than a primary residence.


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## TarheelTraveler (Aug 5, 2010)

I'm with you on that.  I've done some investing in real estate recently, but definitely don't need any more things to take care of.

I like PRC's, but the exchanges just aren't there like they need to be.


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## Buon Viaggio (Aug 5, 2010)

The Timbers Collection looks interesting - full or fractional ownership with some decent locations including Castello di Casole.  Anyone had any experience with them?


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## Kagehitokiri2 (Aug 5, 2010)

timbers is one with unlimited home use, and exchange, but its still exchange

m private residences has brought unlimited use back to DCs

elan is something with fractional ownership of a property that seems to indicate they have unlimited use DC-style across the portfolio... DCNews and I have not been able to get a response via email...

ER has properties at most timbers incl castello di casole


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## TarheelTraveler (Aug 5, 2010)

I really like the Timbers properties, and as far as I know they have a good reputation.  Nonetheless, their exchange is still an exchange, and I have yet to see an exchange program that works as well as a DC.   Also, they've got a somewhat limited number of locations (albeit pretty darn good ones).


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## Kagehitokiri2 (Aug 6, 2010)

i think the concept of DCs is "exchange free"


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## Kagehitokiri2 (Aug 7, 2010)

i didnt even look at the NYT article *TarheelTraveler* linked, and just noticed sherpa's coverage >
http://www.sherpareport.com/prc/vacation-homes-stress-0710.html
my take >
- investment means either underpriced to flip, or _really_ high end
- other 3 issues (if not investment too) can be completely resolved by going with (luxury) hotel managed

timbers to manage vail plaza hotel & club
http://www.sherpareport.com/prc/the-sebastien-vail-relaunch.html
will there be an ER connection ?

points vs days
http://destinationclubnews.com/News_The_Benefits_Of_A_Points_Based_Destination_Club.php
http://destinationclubnews.com/News_The_Benefits_Of_A_Days_Included_Destination_Club.php



> points are better for people who want more travel time - lower season, cheaper accommodation, or both.
> 
> no points are better for people who want more expensive stuff - holidays, expensive accommodation, or both.



http://destinationclubnews.com/News_Demeure_Club_Officially_Launches.php
demeure wont charge deposits


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## alvin (Aug 25, 2010)

TarheelTraveler said:


> Personally, I'll take my DC membership over a second home anyday.



Are DC's really a substitute for a second home?  I understand people love their DC's, and I can see it being a vacation alternative - a great way to have access to luxurious accommodations across a wide variety of destinations.  But isn't the point of a second home to make repeat visits to one location?

If I want to spend part(s) of the year in a given location, can a DC truly be a viable option?


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## NeilGoBlue (Aug 26, 2010)

I think it depends on how many days you think you would spend in your vacation home.  If it's 30 or less, (or even 45 or less), I would do a DC.  If you plan on using it more than 45 days, than obviously a 2nd home would work better.

Unfortunately it seems like a lot of people buy second homes, think they will spend time in them, but end up spending less time than they thought. 

Also, if you are going to buy a 3mm 2nd home, pay interest, taxes, furnish it, upkeep it, etc, it's a tremendous expense, much more than a DC.


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## TarheelTraveler (Aug 26, 2010)

alvin said:


> Are DC's really a substitute for a second home?  I understand people love their DC's, and I can see it being a vacation alternative - a great way to have access to luxurious accommodations across a wide variety of destinations.  But isn't the point of a second home to make repeat visits to one location?
> 
> If I want to spend part(s) of the year in a given location, can a DC truly be a viable option?



I think it depends on how often you want to visit a particular location and for how long.  Most years, we go to at least one location three to five times, and then we usually throw in a few other destinations for a single visit.  But most DCs do have limitations on how long you can stay (e.g., up to two weeks at a time) and might require a break of a few weeks between subsequent stays to prevent monopolization of a property by one member.  Accordingly, if you want to stay for a month or multiple months at one location, you can't do that with a DC.    In that case, I think the only practical option is second home ownership with the costs and headaches, but also with the flexibility to do whatever you want.

From what I understand, some DC members use the DC membership as a substitute for a second home, while others use it as a supplement to their second home for variety.  Seems like I remember seeing a stat somewhere that a significant percentage of DC members actually own a second home.


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## Buon Viaggio (Aug 26, 2010)

Many DC members do own second homes and many stay in one DC destination for multiple consecutive weeks and/or multiple weeks in any given year. It's easy to stay consecutive weeks during off-peak periods with a combination of AR and SA reservations.  Also, within a destination such as Hawaii you may have several options to choose from so you could do some island-hopping.   Considering that the average home usage of a second home owner is only 6 weeks per year then DC's compare very favorably without the maintenance and investment worries. Plus you can visit your favorite destination frequently and there are many other options when you want some variety - you don't have to feel married to the second home.   So just because you can afford it doesn't mean full ownership is the smartest way to go for everyone.


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## Kagehitokiri2 (Aug 26, 2010)

1. exchange-free
2. possibility for unlimited use across portfolio
3. possibility for various business model nuances
4. ciel offered one 26-day reservation per year. (otherwise 3-13 days. or 1/2 with waiver.)

i would never _own_ a second home, i would simply rent. (if not hotel etc.) DCs might provide properties where rentals are not permitted by HOA/etc, or bypass lease mins. (highest ive seen is 5 year min lease.)

im not in the DC market at the moment, but if i was, im not sure i would join one of the current clubs. if i were a billionaire, id live out of luxury resorts, not own more than one residence.


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## Buon Viaggio (Aug 26, 2010)

If you were a billionaire you might change your tune because it would be simple enough to have an assistant or manager to manage your properties!


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## Kagehitokiri2 (Aug 27, 2010)

why buy/own/sell when one could simply rent villas (whether 1BR hotel or 6BR residences) at amanresorts, four seasons, etc? 

max nightly rates >
hotels ~ $50K + tax/service
yachts ~ €120K + expenses


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## 3DH (Aug 27, 2010)

Kagehitokiri2 said:


> why buy/own/sell when one could simply rent villas (whether 1BR hotel or 6BR residences) at amanresorts, four seasons, etc?
> 
> max nightly rates >
> hotels ~ $50K + tax/service
> yachts ~ €120K + expenses



Another thought... if you travel with dogs, a DC won't work for you! (Just saying...)


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## Kagehitokiri2 (Aug 28, 2010)

indeed, but OTOH there could be a pet friendly DC. (all members have pets)

i guess cleaning with fee might not work because of the different ways people feel about animals on furniture etc, and were usually talking about larger properties rather than the equivalent of a small hotel room.


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## Buon Viaggio (Aug 28, 2010)

I don't know about Aman but Villas at RC and 4S still have a corporate feel to them.  As for dogs I think it's a good rule to not have pets at DC's and other rentals.  If you have allergies it can be a real problem and there's more wear and tear.


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## Kagehitokiri2 (Aug 29, 2010)

not sure what FS villas are corporate.. they dont have any domestically.. perhaps you mean residences at FS punta mita and costa rica? but there are also the hotel units at FS punta mita, and the estates at costa rica.

RC doesnt have many, and yes domestic (jupiter) = corporate, and perhaps even abaco, but some of the upcoming (now suspended) ones looked good. id give reynolds plantation benefit of doubt. there is also marbella, bahrain, royal @ sharq. and plenty of good international properties / presidential suites as well.


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## alvin (Sep 13, 2010)

TarheelTraveler said:


> I think it depends on how often you want to visit a particular location and for how long.  Most years, we go to at least one location three to five times, and then we usually throw in a few other destinations for a single visit.  But most DCs do have limitations on how long you can stay (e.g., up to two weeks at a time) and might require a break of a few weeks between subsequent stays to prevent monopolization of a property by one member.  Accordingly, if you want to stay for a month or multiple months at one location, you can't do that with a DC.    In that case, I think the only practical option is second home ownership with the costs and headaches, but also with the flexibility to do whatever you want.
> 
> From what I understand, some DC members use the DC membership as a substitute for a second home, while others use it as a supplement to their second home for variety.  Seems like I remember seeing a stat somewhere that a significant percentage of DC members actually own a second home.



I guess what i was really asking is whether or not a DC or a PRC is the better alternative when you want a "second" home, but can't justify the cost?

In other words, if i want some of the benefits of a second home without the hassle and cost, but only plan on using it a fraction of the time, am i better off buying into a DC that has homes in the area I want to be, or am i better off buying into a fractional development in that specific area?  For example, if I am looking for a part time residence in NYC, am I better off buying into a DC that has apartments in NY, or something like the Phillips club, that sells 1/8 shares of an apartment?


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## 3DH (Sep 13, 2010)

Alvin...

Really, it depends on whether you would like to visit the same time of year, or if that matters to you. With a DC, obviously, you are restricted as to how many days you can reserve a year (and some clubs may actually cap the total number of days at any given property in a year). Finding days available on the DC calendar shouldn't be a problem, but you may need to ask about restrictions, if you would heavily use one particular property.

With a fractional, you may be able to purchase a "fixed" time. If you plan to travel every year for Thanksgiving, obviously, you will likely not be able to secure NYC for all, but, again that is dependent on the particular club and their holiday week procedures. (Sorry, just an example...)

For us, the DC (EE, in our case) provides access to many locations that we love... with a fractional, we would simply be too limited, and I have heard (no experience here...) that the "exchange" systems they have in place don't always work out as it is promised.

Hope this helps... but my thought is if you are looking for ONE primary location, go with a fractional there. If you want variety, a DC is the best option...


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## Kagehitokiri2 (Sep 13, 2010)

another possible approach - figure out what quality you want first, then compare values


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## siesta (Sep 13, 2010)

I'm a snowbird, when the weather gets cold I go to Scottsdale.  It would definitely be cheaper to be part of a DC, but it's nice to have a home away from home with things the way you left it. But if I didn't like to spend so much time out there, it wouldn't be worth it cost wise.


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## Kagehitokiri2 (Sep 13, 2010)

seem to recall reading about this being offered at some fractionals etc >

http://departures.com/articles/black...rks-and-caicos
(John Smith / 371909)


> Owners leave behind only clothes and personal effects, and the villa management will document everything with photographs, lock it all away, and return everything to the exact position it was in before their next arrival.


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## NeilGoBlue (Sep 13, 2010)

alvin said:


> I guess what i was really asking is whether or not a DC or a PRC is the better alternative when you want a "second" home, but can't justify the cost?
> 
> In other words, if i want some of the benefits of a second home without the hassle and cost, but only plan on using it a fraction of the time, am i better off buying into a DC that has homes in the area I want to be, or am i better off buying into a fractional development in that specific area?  For example, if I am looking for a part time residence in NYC, am I better off buying into a DC that has apartments in NY, or something like the Phillips club, that sells 1/8 shares of an apartment?



It depends if you want to travel all over, or just to the same spot every year... 

We wanted to travel all over so that we could experience all the different venues.. then, maybe 10-15 years from now, we might settle down and buy a second home.


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