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Is a Vacation Home Alternative Right for You?

Susan Weiner

A typical vacation home—one that comes with a mortgage and limits you to one location—isn’t for everybody. Some people want the freedom to vary their location. Others seek hotel-like amenities and other services.

There are alternatives to traditional vacation home ownership that also offer advantages over making hotel reservations for every trip. Options have evolved since the days of the stereotypical hard-sell timeshare sales pitch. “Vacation ownership is more flexible and has more offerings than most people believe,” says Ed Kinney, global vice president, corporate affairs and communications for Marriott Vacations Worldwide Corporation.

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Traditional vacation homes work for some people, especially those who want a place that’s always available without the need to make reservations. Others may want to build memories in one location over time. Yet, they have drawbacks. They need maintenance and may limit your ability to visit other places.

A vacation home alternative may work better for vacationers who like to roam or who don’t like to deal with taking care of a property. Some alternatives involve owning a stake in a specific piece of real estate. Another option is vacation clubs that charge an initial membership fee and annual dues, much like a country club. In return, you gain access to the club’s units for a set number of weeks per year.

Buy a condominium if you want convenience and control, says Brian Wheeler, director of real estate and development at Big Sky Resort in Big Sky, MT. “With a condominium, you don’t deal with any of the maintenance.” You can also decorate in the style that you prefer. If that isn’t an issue, consider a condominium hotel, which offers hotel rooms or units with one to three bedrooms. “In a condo hotel, the furnishings are likely owned by the condo association. You can’t put in your own couch or lamp,” Wheeler says. On the other hand, if you need to rent out your property, the condo hotel can manage that so you don’t have to deal with the renters yourself.

If you seek a variety of location and lodgings, consider a hotel-affiliated vacation club. Participants in the Marriott Vacation Club, for example, can take advantage of different offerings as their needs change over time. Instead of buying a specific unit, they buy points they can use for different experiences, Kinney says. One year, a couple might take a one-bedroom villa. The next year, they might take a multi-bedroom unit for a family reunion in a different location. Different units, locations, and seasons cost different numbers of points. Reservations can be made up to a year in advance.

Advantages of hotel-affiliated properties over hotels include the ability to accommodate larger groups, access to amenities such as kitchens, and the properties’ focus on leisure travelers. “It’s like a vacation home in a villa-type setting,” Kinney says.

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If Marriott isn’t your style, there are plenty of luxury alternatives, including private residences, residence clubs, and residence rentals, says travel agent Elaine Smith of E-destinations. “You can feel like you’re at a resort, but you also have independence and privacy in a villa or condo-like setting.” Her clients often seek out offerings by the hotel brands to which they feel allegiance, such as Four Seasons, Montage, Ritz-Carlton, and Rosewood. The ambiance of the locations may vary by brand and property.

Exclusive Resorts, which offers privately managed luxury residences with two to five bedrooms, along with access to five-star hotels and resorts, suggests that you look beyond hotel affiliates. “Hotel-affiliated vacation clubs provide access to only a select number of their properties, which are often [only] available at off-peak times and subject to an excessive amount of blackout dates. Simply put, they are discounted buying programs with restrictions,” says Adam Wegner, the firm’s executive vice president of strategy and corporate development.

Nontraditional vacation home options may also open the door to other experiences. The Marriott Vacation Club, for example, offers cruises in partnership with International Cruises and Excursions and high-end experiences in places like Tuscany with other third-party providers, says Kinney. For its part, Exclusive Resorts offers its Experience Collection that includes a Kenyan safari and watching the Kentucky Derby from a suite with VIP access to Derby parties.

These alternatives aren’t for everyone. The biggest challenge may be the need to plan ahead for vacations. “I have some clients who complain because they paid and didn’t go anywhere because they didn’t plan ahead,” says Ellen Crowley, a financial advisor with CAPTRUST. Regardless, the many options available today mean that there is something for everybody. With a little research and planning, you can find the vacation spot that’s right for you. 

Figuring out what’s important before you buy will help you make good decisions. Big Sky’s Wheeler suggests that you consider your needs over the next five to ten years, not just right now. This is particularly important for families with children.

Questions to ask before making a decision

  • Location - 
Do you like to visit the same place again and again or do you prefer variety? If it’s the same place, a home or condominium may be right for you. Some condos, like those at Big Sky, offer vacation clubs where you can trade weeks at your unit for weeks elsewhere.
  • Size and Type of Unit - 
If you buy a specific home, do you want a standalone house, a condominium, or townhouse? For an alternative vacation home, do you want something that’s just big enough for you? Do you want to accommodate a larger group of family and friends? Or do you want to be able to change the size of your group from year to year?
  • Budget - 
How much do you want to spend? In addition to travel expenses and annual condominium, association or other fees, you may be responsible for utilities, a golf club membership, and other expenses. A house or condo may bring in some offsetting rental income.
  • Ability to Plan Ahead - 
Can you plan your vacation well in advance? If you choose an option other than traditional home ownership and wait until the last minute, your desired location may not be available.
  • Amenities - 
Do you want easy access to a spa, golf course, or kiddie pool? Other amenities? List your must have items before you start shopping.

About the Author

undefinedSusan Weiner is a Chartered Financial Analyst®, journalist, and a writer and editor for leading investment and wealth management firms. Her work has been featured in Advisor Perspectives, Boston Globe, Bottom Line/Personal, CFA Magazine, Financial Planning, Louis Rukeyser’s Mutual Funds, Wealth Manager, and other national publications.