What is Shared Vacation Ownership?
For many the spiraling cost of luxury assets is putting them beyond the reach of anyone but the very rich. It is also becoming more and more burdensome to manage and maintain these assets.
For some, owning a second property and rarely using them has become a waste of both time and money. Research shows that second holiday homes are only used for 27 days per annum by the owner of the property.
Shared Vacation Ownership provides a shrewd alternative. There are generally 3 primary types of shared vacation ownership, namely: fractional ownership, private residence clubs, and condo hotels. All 3 forms are governed by the companies act and is essentially a vehicle for co-owning an asset. In this regard it has some similarities to syndication. Dream Lifestyles has developed its own unique shared vacation ownership model, which we believe is the future of accommodation in the tourism industry. Shared vacation owners enjoy a high degree of flexibility around the use of the relevant asset, but without the burden of maintenance costs and administration burdens associated with other forms of ownership.
Shared vacation ownership is vastly different to timeshare. It is ownership of an equity based share in a company that holds an asset or portfolio of assets. In the case of our unique structure, the shareholder receives a dividend from the operational profits of the operating company. In addition, because the shareholder also becomes a member of Dream Lifestyles they are entitled to make reservations at the property at hugely discounted preferential rates for 7 nights/annum/share owned.
Therefore, through shared vacation ownership you are entitled to use of an asset annually. This could be a quarter share in a private jet, a sixth share in a private yacht, a fiftieth share in a cruise ship, 60 days of driving a high-performance sports car, or a 4 week vacation use plan of a portfolio of luxury residences anywhere in the world.
Buy What You Use
In the Dream Lifestyles' unique leisure and lifestyle investment structure you can have full yet indirect ownership of a range of assets. You buy a share in the company that owns the asset and thus have preferential and exclusive use of that asset for a certain period annually based on the number of shares you buy.
Unlike timeshare, this use is not tied to the same time period each year. With our structure you have the choice as to when you want to use the asset. This use is clearly defined and is administered on behalf of the owners by Dream Lifestyles.
Ownership also means that you can sell your share at any time, at any price, bequeath it to your heirs, allow friends to use it, invite guests to share it with you and, of course, enjoy it yourself.
With Dream Lifestyles you buy what you use. You choose how many shares you want to buy. If, for example, you see yourself and your family spending one, two, four or more weeks per year at Shepherd's Tree Game Lodge, and you also want to own equity in the lodge, you can buy what you want. This can be anything from a one share to fifty-two shares in the lodge. Due to your membership in Dream Lifestyles, you will therefore be entitled to anything from one week to fifty-two week's use.
Equity Based Investment
In the instance when ownership is based on an underlying asset it also creates an opportunity for a real return on your investment. There are two ways that this happens.
Property based assets will increase in value over time and so will the value of your share. The benefits based on that share, however, remain locked in for the duration of your investment. Over the long-term you will save considerably on what your use of the asset would have cost you for comparable luxury. Our calculations indicate that it will cost our members about 40% of the market related cost for the period of their investment.
In the short-term you are able to rent out your use of the asset at market related prices. The professional administration of this option is provided to Members of the Destination Club through Dream Lifestyles. As the value of the underlying asset increases, the rental that you are able to receive will also increase.
Comparison with Alternatives
Destination Clubs are often compared to other “fractional” real estate programmes like timeshares or private residence clubs. The destination club model typically gives the consumer more choice and less overhead.
Ownership of a Dream Lifestyles property means:
- Equity in a property of your choice;
- Annual dividend from the operating profits of the property;
- Return on investment through savings on holiday spend and the Rental Pool Programme;
- Capital appreciation;
- Hassle-free use of that property at the price you can afford for the time period that you desire using it;
- An asset that is managed and maintained by professional companies with expertise in both the property and tourism hospitality industry;
- You have the choice of either using your week at the lodge or obtaining an equity return on your investment by pooling your week in the Rental Pool Programme;
- All the benefits of ownership, when you want, without the overheads normally associated with ownership;
- The Dream Lifestyles scheme also incorporates membership of a Destination Club. This overcomes the limitations of fractional ownership by giving you access to a range of leisure destinations and luxury lifestyle assets.
A summary of how the Destination Club model compares to some of the other options:
- Luxury Hotel – Though appealing for a couple’s getaway, luxury hotels are often inflexible and less suitable for children and multi-family groups.
- Luxury Rentals – Though you may choose to rent a house you want, where you want it, the research and cost can be high.
- Second Home Ownership – This option provides the benefit of full asset appreciation with a home that is uniquely suited to and customised for your family. The downside is lack of destination flexibility, and the cumbersome reality of owning a home.
- Destination Clubs – These clubs combine the services of a luxury hotel chain with the ownership of a second home. Destination clubs are especially well-suited for families or groups who are looking for small or large residences with the option of either self-catering or a fully-catered service with hotel amenities.