“Necessity,” as Plato once wisely remarked, “is the mother of invention.”

So it’s no surprise that a new generation of second home and vacation ownership is growing in an otherwise sluggish market. After all, we are in a recession, so less is more.

Take private fractional jets, for example, like Warren Buffet’s NetJets. Considered the ultimate luxury, private jet travel was a rare thrill few could afford, but then in the ’90s someone had the idea of ​​taking a $20 million jet and splitting it up to make better economic sense for both companies ( large and small) and wealthy travelers who could share in the gigantic acquisition costs and maintenance expenses. Even companies that could afford “everything” saw the benefit of cost sharing based on how much time you would spend sitting in a hangar, eating money.

It was such a smart business model that even Warren Buffett, who is a very selective and savvy investor, believes in sharing the costs and expenses of luxury items. As he explains, “why buy the cow when you can have the cheap milk?”

Well, apply that logic to the second-home market and it becomes clear why private home club sales, also known as fractional ownership, have been gaining ground in winning over vacation home buyers and for some time. Shared ownership simply makes more sense in today’s financial climate.

What IS a Private Residential Club?

The concept began in 1991 when Steve Dering, founding partner of Destination Club Partners (DCP) International, launched the world’s first private residence club at the renowned Deer Valley Resort in Park City, Utah. He divided the purchase price and expenses of each ski-in/ski-out luxury townhome in the mountain retreat among like-minded owners and perfected a simple and equal reservation and use system to coordinate each owner’s time enjoying your home.

Dering’s luxury real estate model worked so well that it spread to other prestigious destinations around the world.

The idea is simple, and that simplicity is evident in testimonials from Residence Club Owners everywhere. You find a million-dollar getaway in your favorite exotic location, pay a percentage of its cost, and then enjoy it as many times as you like, with minimal restrictions.

In addition to experiencing a much less financial burden, club owners are also pampered, completely free from the hassles of long-distance home management. Not worrying about cleaning, airing rooms, paying utilities, taking care of constant house maintenance, insurance and burglary protection, or renting between visits. All maintenance is done prior to your arrival. And when you return home, leave the dishes in the sink and the beds unmade; club staff do too.

Now you can own a million-dollar home, for around $150,000, a fraction of the acquisition and maintenance costs…and basically use it as often as you want if it’s available. With the services of a boutique hotel, the club’s staff oversee the arrangements, managing everyone’s use of the house through a simple reservation policy, and, well, taking care of everything else, too. As with any other deeded real estate purchase, ownership rights can be sold, conveyed, or placed in a trust.

In short, you’ll discover the smartest way to own expensive luxury real estate in a volatile market. It’s like owning a piece of paradise at a fraction of the cost.

It’s not a timeshare

If you’re thinking, “timeshare?”… please don’t.

Few people can truly justify owning a million dollar second home that they use 5-6 times a year, so now, many buy a piece of one and only pay for what they use. Private residence clubs offer luxury real estate with high-end furnishings, greater flexibility, and many more amenities than traditional timeshares offer and, in most cases, beyond what full ownership can offer, from janitors to housekeeping and even grocery shopping services. You’re also buying real property and not just “time” as with traditional timeshares where you’re usually locked into the same week in the same place, year after year.

Private residence clubs are the opposite of timeshares. While they greatly cut costs, they provide the services one would expect from a boutique hotel, without the guilt. You don’t even get these attributes by owning everything. In fact, they’re “the cheapest way to vacation like a rock star,” as los angeles times put it.

The new second home

As anyone who owns a television or opened a newspaper can attest in recent years, there has been a sea change in the habits of vacation and second home buyers, largely due to the changing priorities of baby boomers (the most assets in this market). They have become more pragmatic and more cautious about spending large chunks of their wealth during these unsettled times.

Industry analysts say it’s for this very reason that private home clubs have expanded into a billion-dollar-a-year business and seemingly go against the grain of the rest of the housing market.

Today, dozens of these clubs can be found in North America, Europe, the Caribbean, and Latin America, proving that this homeownership model, which generates over 90% customer satisfaction, is here to stay.

The initial development of DCP International was so successful that they now have over 40 clubs worldwide with over a billion (with a B) in sales since the early 90’s. Now in partnership with Residence Club Partners of Asheville, NC , the couple have launched 8 new clubs in the last 36 months.

Only Residence Club Partners has added to its portfolio of destinations, including The Asheville Club at 151 and The Preserve at Rock Creek, both in western North Carolina; The Creekside Club and Ridge Run Club, both located in the popular Deep Creek Lake area of ​​western Maryland; and the new Del Pacifico Club on the Pacific coast of Costa Rica.

“There has been a definite increase in people’s appetite for private home clubs in recent years due to the decreased financial risk of the model for buyers and the ‘win for the buck’ mentality,” he writes. international luxury living. As Dering says, it’s because “the popularity of residential clubs is based on simple logic. The cost of ownership is more in line with actual use.”

And this shouldn’t come as a surprise.

“The fundamentals of the vacation home market have changed. The days of buying a $3 million home…with the expectation of 20% annual appreciation are gone for the foreseeable future. Recent events will enhance the appeal of high-end fractional products compared to full ownership,” explains Dr. Richard Ragatz of Ragatz Associates, the leading fractional and second home marketing consulting firm.

John Grant, author of The Green Marketing Manifestoechoes the sentiments:

“We are seeing a complete redesign of modern life… Fractional ownership, where products are pooled and shared, will explode.”