Saturday, 27 September 2014

Vacation Investment Your Best Chooise

The right to use time (usage) only vs the right to usage as well as an ownership stake (equity.)
Time - based offerings:

Include 1) rentals, 2) timeshare, 3) points clubs and 4) destination clubs.

Equity- based offerings:
Include 5) sole-ownership, 6)co-ownership (syndication), 7) fractional ownership, 8)private residence clubs and 9) condo (hotel suite ) investments.

1) Rentals:
Offers unlimited options in all parts of the world.

2) Timeshare:
Offers investors the opportunity to buy time in fully furnished leisure resorts, usually in blocks of 1 week. There is a choice to suit different needs, and most resorts offer affiliation to a worldwide exchange program, allowing investors to exchange into a variety of resorts all over the world.

3) Points clubs:
In this offering investors buy points into a club which owns accommodation in a variety of resorts. There is an upfront cost based on how many points are purchased as well as annual levies. Some clubs also charge booking fees. Points clubs are presented as the offering with the most variety and flexibility.

4) Destination clubs:
Your investment consists of an upfront joining fee, as well as annual dues or levies.

5) Sole ownership:
Shared ownership with friends, family or invited investors. The advantages are in the shared initial cost and ongoing costs.

6) Fractional ownership:
Fractional ownership offers equity in property at a fraction of the cost, with all responsibility for maintenance and admin.taken care of by the fractional company. Many fractional schemes offer membership to an exchange company, entitling investors to exchange their usage into other Worldwide Resort Resales.

Investors pay an upfront purchase price, and share the ongoing costs in the form of an annual levy. The current trend has favoured Fractional ownership and Private Residence Clubs, as investors seem to prefer the reduced costs, with the benefits of capital growth.

The author believes Fractional or Private Residence Club's offer a great alternative investment as part of your portfolio diversification.