The second home market has evolved from the traditional home that you own outright to alternatives such as fractional ownership, membership in a destination club, or purchasing a unit in a hotel condo.
Fractional ownership involves a specific period of time in which you have access to a particular resort or the opportunity to exchange for another product. This provides a high-end lifestyle without the hassles of single ownership, says Lani Kane-Hanan, senior vice president of Marriott Vacation Club in Orlando. Marriott has a resale program for owners and allows moving between the Marriott and the Ritz products.
A destination club is a group membership with annual dues and a deposit that can range from $50,000 to more than $1 million. You get a refund of between 50 percent and 90 percent when you leave says Brad Handler, chief executive officer of Exclusive Resorts in Denver. "We provide opportunities for people to try lots of different locations," Handler said. His club is geared toward intergenerational travel as well as couples. There is no resale market for his product as he buys the membership back.
A condo hotel is different from the other two products as you buy the entire unit and there is an opportunity to put back into the rental program, explained Dan Paris, senior vice president, Brooksville Development Corporation in Orlando. Paris said his units are also family oriented.
"Condo hotels are a big issue," said Paul Courtnell, senior partner, Gunster, Yoakley & Stewart, West Palm Beach. "Vast majority of these units have been sold on prices that are not sustainable as hotel rooms; resale questions just as important as in timeshare." Courtnell said timeshares do not have a strong resale market.
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