Jessie Hewitson November 03. 2008 2:41PM UAE / November 3. 2008
Members of property clubs have access to villas, such as this one in Portugal, around the world. Many include housekeeping staff and a concierge. Courtesy Indigo
Holiday homes require commitment. True, they may bring familiarity, comfort and stability to your life, but there is one major drawback: unless you’re really rich, you have to remain faithful to them. And for anyone who feels the prospect of limiting themselves to one home for the rest of their lives too constricting, there is a holiday home option for commitment phobes: overseas property clubs.
The idea of these clubs is that, for the same price as a fairly ordinary overseas home – around Dh1.18 million – you get the use of several multimillion-dirham pads around the globe. The main companies operating these schemes are Rocksure and The Hideaways Club, both of which started in 2006.
The concept, which came from the US, is an extension of fractional ownership combined with the more appealing aspects of upmarket timeshare. Over the Atlantic, fractional ownership – where you buy a share of the property, often a quarter, and get an allotted time to use it each year – is very common. Buying into a club like this, however, where you get to use villas around the globe, is a more recent development.
Rocksure was the first to open its doors for business in early 2006. The club has six luxury pads to offer its members: in Portugal, Marrakech, Brazil, Phuket, Colorado and Croatia. All properties will have at least four double bedrooms, with a good-sized swimming pool and terrace. Each one comes with its own housekeeper and a cook to rustle up something delicious for dinner.
Full membership costs Dh1.12m, plus an annual service charge of Dh10,660 – which works out to Dh2,664 per week if you’re using the four-week quota – and covers cleaning, gardening, utility bills and a welcome pack that contains drinks and food. The first fund of 36 members sold out. Now Rocksure is selling its second, with a maximum membership of 40.
It describes itself as a “property fund” with a lifespan of seven years. Once the allotted years have lapsed, all the properties will be sold and the profits distributed among its members, minus a 17.5 per cent charge levied by the fund’s managers. Not all the money goes into the fund – Dh8.9m (or five per cent of the total cost) is kept from the money raised to cover costs, such as stamp duty taxes, renovations, furnishings and contingencies. Service charges, which include maids, are kept down by renting out the properties on the open market when investors do not want to use them.
________________
Bob Waun accurately predicted the disastrous subprime and zero down payment mortgage effects in a July 2005 Chicago Tribune article. Now his latest book “Besting: Better Nesting” predicts that the housing slump is actually the beginnings of a mass migration by the baby boom generation, maybe to new forms of real estate ownership.
“78 million US boomers, and 200+ million boomers worldwide are beginning to compete for rare-air vacation real estate. The second home market is a bright spot in the real estate business.”
‘Besters’ are buying better nests, not downsizing for retirement, this is a dynamic shift in lifestyle expectations for retirement. “Besting or Better Nesting: between Empty Nesting and the Old Age Home” details the economic and social forces behind the second home real estate markets in the US for the coming decade.
78 million people can’t all buy the same parcels of real estate. A trend toward shared ownership, fractional, condo hotel (condotel), timeshare and destination clubs are just the beginning of this property evolution suggests Waun.
Besting offers a bold and sweeping picture of the future of second home ownership and the real estate markets at large.
“Not my parent’s retirement … a visionary and insightful read on real estate expectations of an aging nation,” said Dante Alexander, President of the National Association of Condo Hotel Owners. This is a must read for anyone interested in the real estate or resort and vacation ownership industries in the coming decades.
Post a Comment