As an investment, however, residence club
memberships do not currently offer a significant return. While Ritz-Carlton
claims that the two Colorado residence clubs have seen price increases, the
company does not market the properties as investment opportunities. Also, since
members own just a fraction of a residence, they also realize just a fraction of
the capital appreciation on the property, if there is any. “You can’t rent these
out, and I do not expect the equity to appreciate much in value,” says Savage.
“This is just for our personal vacation pleasure.”
| The less equity and possibility for profit, the greater the service, amenities and destination flexibility. |
Destination Clubs
For those of us who prefer a variety of locations,
destination clubs can accommodate us. Members of these clubs do not receive a
deed to a property, and their investments have no tax advantages or appreciation
potential. Instead, they get privileged, “anytime, anywhere” access to exclusive
luxury homes, villas, estates, penthouses and condominiums in some of the
world’s most desirable vacation destinations.
Typically, members pay a
one-time initiation fee, that is wholly or partially refundable upon
resignation, as well as annual dues. For example, Exclusive Resorts, a major
player in this space, requires an initiation fee of $325,000 (which is 80
percent refundable), and annual dues range from $12,000 for 30 days to $18,000
for 60 days. For more information on Exclusive Resorts, see page 94 in the May
2004 issue of Robb Report magazine.Membership at Private Retreats by Abercrombie
& Kent, another major name in the luxury destination club market, starts at
$250,000 (100 percent refundable) with annual dues of $8,750 and up, plus $150
nightly fees.
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