Private Residence Clubs: Luxury Vacation Homes at Worldwide Destinations

Sitting comfortably in the upper tier of the luxury fractional market, Private Residence Clubs are the seamless combination of a five star hotel-level of service with all the advantages of home ownership. Due to their popularity, PRCs are always being compared to timeshares, but there are many key differences that the discerning buyer should know. That is why we created this in-depth guide into the world, functioning, advantages, and everything else you have to know about the rewarding world of Private Residence Clubs.

For many, traveling to a place that feels like a “home away from home” is the most relaxing vacation. However, it’s still nice to experience the luxury and services that a first-class hotel provides. Is it possible to have both? Yes. A private residence club (PRC) combines vacation home ownership with boutique hotel amenities and services. PRCs are located in the most desirable vacation settings (like beaches, mountains, golf resorts, or highly visited cities). Each PRC residence is furnished at the same level as a first-class hotel.

What are the advantages of a private residence club? Is the experience suited for you? Learn more about PRCs with our extended coverage below.

What is a Private Residence Club?

Private residence clubs are at the high end of the fractional ownership real estate category. There are no legal or technical distinctions between the two but there are significant differences. Within the fractional ownership industry, developments selling their shared residences for $1,000 or more per square foot are deemed to be residence clubs, while fractionals are those developments selling for less.

The $1,000/s.f. hurdle is achieved by PRCs not solely based on the quality of the residences but also because of the amenities and services that are provided. Owners return to their club frequently and become well-acquainted with the club facilities, the staff, and the surrounding attractions. The PRC becomes their home away from home.

In addition to residential quality and clubhouse-type facilities, another difference between traditional fractional developments and private residence clubs is that many of the latter do not permit rental to non-owners, preferring to reserve occupancy for owner use. If an owner wants to send relatives or friends to use their PRC, they are treated as the owner’s “unaccompanied guests.”

What Is the Purchase Price and Annual Cost?

According to the 2018 Ragatz Associates report, the average price per share for all active private residence club developments is about $234,225, ranging from $163,500 for a studio to $472,000 for a four-bedroom residence. However, at the Timbers Kauai PRC ownership can be as much as $810,000. It shouldn’t be a surprise that PRC pricing varies depending on the number of owners per residential unit, location, size, type of property, and the services and amenities that are provided.

For comparative purposes, annual fees for private residence clubs can be calculated on a per-week basis to normalize the fees among different sizes of ownership shares, e.g. six owners per unit versus ten means eight weeks per year versus five. Annual maintenance fees average to $1,975 for PRCs, but can be as low as $925 for studios and as high or higher than $2,800 for four-bedroom units.

These annual fees are all-inclusive and cover maintenance, utilities, insurance, staffing, management fees and reserves for scheduled replacements. The total of these annual operating costs is divided among the property owners in proportion to their ownership shares.

A common misconception about private residence clubs is that annual fees are high compared to vacation home HOA expenses. However, by comparing the monthly costs of owning a high-end vacation home, you will find that the monthly out-of-pocket expenses that are not included in typical HOA expenses stack up quickly – taxes, energy bills, maintenance costs, housekeeping, etc. – often without access to typical PRC amenities. Depending on the market and location, individually owned second homes will cost you as much as $50K or more yearly in maintenance. Most second home owners spend six weeks at their vacation residence on average. Assuming $50,000 a year to maintain the residence, that equates to $8,300 per week in maintenance costs.

How Often Can You Use the Residence?

There are various ways in which occupancy is allocated to owners of fractional homes and private residence clubs, including:

  1. Fixed weeks: Specific owners have the same weeks each year.
  2. Floating weeks: Members reserve weeks through a procedure decided collectively by the managing club.
  3. Hybrid: As the name implies, this sharing arrangement mixes elements of both fixed and floating weeks.

According to the Ragatz report, a PRC model will allow owners from a couple of weeks to more than ten weeks of usage a year, which is why usage and ownership are also expressed as fractions, such as 1/10, 1/8 (mentioned above), 1/4, etc.

a kayak in the water


Many fractional developments offer multiple units in the same location instead of just a single unit. Depending on the legal documents, each owner uses the same residence on each visit (“unit-specific”) or will use different units (“non-unit-specific”) within the same ownership category with the categories usually based on the number of bedrooms.

In unit-specific fractionals, owners are entitled to a specific home and share the maintenance and repair costs of only that home. In contrast, in the non-unit-specific model, they share all the costs for all the homes within that category. To better understand the advantages of each usage model, you can look at the following lists:

Unit-Specific Usage

  • Feels like a home away from home since you visit the same home each time and get familiar with its floor plan, location within a development, etc.
  • The relatively small group of owners is allowed a great deal of autonomy in decoration, repairs, budgeting, and other issues regarding the property.
  • Through a fractional exchange program, owners can visit other destinations when desired.

Non-Unit-Specific Usage

  • There is more flexibility in the reservation process since more than one home is available for occupancy.
  • Some PRCs allow owners to reserve more than one residence during the same time period.
  • Typically, clubs using the non-unit-specific model offer upper-tier amenities compared to their counterparts.

Be advised that ownership and usage rights are not the same things. Multi-unit fractionals can have non-unit-specific usage, meaning that each person gets a deeded fraction of a particular home but they may or may not stay in the unit they own. On the other hand, a fractional owner of a multi-unit property might use the same home every time if it has a unit-specific use plan.

Same Time Each Year

In a fixed-date system, each owner gets a property assigned to them for days or weeks (and even months) that remains the same every year. In this scenario, the most desirable periods, such as high season or holidays, are priced higher. On the contrary, a non-fixed-date usage model will allow members to purchase a different period each year. Here are some advantages and disadvantages to each model:

Fixed-Date Usage

  • Users are guaranteed to have their homes available in the period they desire to use it the most.
  • Relationships with neighbors are facilitated and allow extended families to coordinate their visits.
  • Owners who want to save money or are not interested in the high seasons can buy off-season dates.
  • This model usually allows for lower dues and is easier to operate than others.
  • Fixed-date usage can be combined with non-fixed-date usage, allowing some owners to have the former while others enjoy the latter.

Non- Fixed-Date Usage

  • High season costs are lowered because it allows for more owners to share it.
  • This model has a greater variety and usage flexibility overall.
  • The risk that life changes for the owners will render their time unusable is eliminated.
  • While it can be difficult to find owners willing to purchase undesirable periods in a fixed-date arrangement, the non-fixed-date one eliminates the problem.

Rotational use in Private Residence Clubs

PRCs target a more affluent type of owners, ones that not only appreciate the luxury treatment and amenities but also want their ownership to replicate whole ownership as much as possible. Therefore, PRCs offer much more flexibility in terms of accessibility and scheduling than other fractional real estate.

a large living room with a large ocean view

Based on a rotating system, owners can request vacation times on a Planned Weeks basis, Space Available basis, and Short Notice basis.

PRC owners are allocated a set amount of time (planned weeks) to guarantee that each owner gets use during high seasons. Spontaneous visits (space available) are available throughout the year – if there is occupancy available any owner can claim it. Finally, short notice visits allow owners to stay for as little as one night and as much as seven nights if the conditions are met.
It also bears repeating that most private residence clubs do not allow rentals, preferring to maximize flexibility and availability for the owners.

As for the topic of rotational plans, there exist three of them.

  1. Fixed rotation plan: This plan allocates weeks throughout the year according to a fixed rotation. For example, in a property with eight fractional owners, each is assigned every eighth week, and the rotation starts with a different person each year. More complex forms of this model exist, usually with variations of time allotted to each person.
  2. Usage reservation system (year reserved in advance): Owners are allowed to book their time based on availability through rules stated in the club legal documents. For example, using eight fractional owners, the selection process might give the owner the first choice of two weeks out of the entire year, followed by the second owner, and so on. Once finished, the process begins again in reverse, then again until everyone has had their pick, and the year has no more spaces.
  3. Usage reservation system (year partly reserved in advance): This is a more complex system usually reserved for larger PRCs. The reservation process typically allows all owners to reserve three planned weeks prior to the start of the club year. The remaining occupancy is dictated by the number of owners per unit – eight owners leave 28 weeks for space available use; ten owners leave 22 weeks. Once the advanced reservations are all made, the remaining weeks are available on a first-come-first-served basis, subject to many more restrictions regarding how far they can be reserved and how many reservations can be done per owner.

Reasons to Buy

Residence clubs appeal to both the head and the heart.

It allows families to purchase vacation real estate at a price that is proportionate to personal use. It is deeded real estate with the potential for appreciation, it’s a property that can be willed or sold, and offers the same tax benefits as a second home.

a landscape with trees and a body of water with a sunset

Equally as important, owners belong to a private club offering personalized service and the comradery of like-minded individuals. They and their families can get to know each other and the staff. They will know what to expect the minute their vacation starts; the place will be perfectly clean and maintained. Top-shelf groceries and toiletries will always be stocked, and all sorts of club-exclusive services and amenities will be at their disposal at any time. This combination of long-term benefits and familiarity combined with a 5-star treatment all around is rare, and few investments manage it like a private residence club.

Since PRCs are in the upper tier of the real estate market, they are an amalgamation of the best in terms of design, materials, decoration, luxury, and attention to detail in the daily upkeep. Many of them include private pools, Jacuzzis, fitness centers, game rooms, private lounges, access to nearby golf courses, and other high-end resort amenities.

Hassle-free, Luxury Ownership

Another big part of the appeal of fractionals is that ownership is entirely hassle-free. Aside from having a staff that takes care of the personalized service of all the owners, private residence clubs will never ask you to worry about repairs, maintenance, or any other kind of housekeeping, since the upfront price and annual fees will already cover the costs.

Those maintenance responsibilities will all fall on a professional company that will manage all aspects of the properties. These companies are the key to the success of PRCs since more are operated by well-established hospitality companies that operate worldwide in other ventures such as resorts, hotels, and more. Names like Ritz-Carlton, Four Seasons, Rosewood, and St. Regis will conjure up images of luxury in the minds of even the most discerning travelers.

chairs on a patio

Full-Service and 5-Star Style

Private residence clubs offer you the benefits and pampering of a 5-star hotel in the privacy and comfort of a second home. Each time you visit the property, the house will be thoroughly cleaned and prepared for your arrival, so all that’s left for you to do is relax and start enjoying your vacation. It is a significant benefit for busy entrepreneurs and professionals that want a respite from their daily life.

Many private residence clubs also employ 24/7 concierge services to make you feel comfortable from the moment you arrive at the property. They will be the ones to stock up your refrigerator, set up golf times, make dinner reservations for the whole family, and are overall in charge of spoiling their guests. They will also help you find relaxation and fun outside of your home, of course, by getting you tickets for shows, spa times, planning hiking routes, white water rafting, and all sorts of recreational activities.

Other services might include luxury transportation from the airport to your residence, valet parking, dry cleaning and laundry services, among other things. And just to make everything feel a little more like home, you have the option to leave personal belongings in storage and ask for them to be put out before your arrival. Everything described above and more is the elements that make a PRC an experience all of its own in the real estate market.

Enjoy Tax Benefits

Since fractionals are mostly a piece of deeded real estate with the potential for appreciation, and we have already established that the law considers all fractional models under one description, these properties can be sold or willed. They also enjoy the same tax benefits afforded to second homes. For example, the interest on a loan taken out to purchase a fractional property will be tax-deductible.

In this particular subject, it is crucial to clear the air around a few topics related to fractionals and private residence clubs. First and most prominent among them is the fact that, despite the potential for appreciation, luxury fractionals are a lifestyle choice and not an investment, and should not be treated as such. Here is why.

The properties that form PRCs have a significant markup by the developer, which accounts for marketing and developer overhead; this means that each unit’s actual value is lower than what owners are paying for them. Usually a markup is 20-30% of the unit cost, lower than timeshare (40-50%), but much higher than an investment fund like Equity Residences (averages 5-6%). Also, reselling part of a deed is not the same as the whole unit, so the property’s appreciation might not reflect equally on the fractioned deeds. Even then, reselling might be a hassle for owners. Those who wish to buy a PRC should do so for the homeownership and luxury treatment that the model offers.


Private Residence Club

  • Significantly lower ownership price compared to whole ownership of a comparable vacation home
  • Purchase price is proportionate to the typical amount of personal use
  • Annual savings over the cost of luxury vacations and a better experience
  • Annual savings over the cost of the yearly all-in cost of maintaining a second home
  • Located in premier destinations in all types of vacation environments
  • No ownership responsibilities – the professional club staff takes care of everything
  • Ability to exchange for vacations at other luxury properties around the world

a person taking a picture of a body of water


Like any other real estate expense, investing in a PRC requires research and planning. Taking your time to choose the best club for you and your family will save you many frustrating moments.

Take into consideration the following points.

How To Choose a Private Residence Club

a long dock leading to a house on the water

► It’s all about location

As in regular real estate transactions, location is critical. Popular destinations will always have a high frequency of visitors and hold their value better. You should also seriously consider a PRC that offers a high-end exchange program that offers locations around the world.

► Compare upfront costs to other private residence clubs and resales at the property

You will want to know whether the cost of membership is higher or lower than in other PRCs and, if so, why. Compare the costs of ownership with the annual vacation value, associated benefits, and expected long-term value of other PRCs. Factor in your lifestyle, your family preferences, your vacationing habits, the flexibility of schedule, transportation costs, and what you desire to see and do the most on vacation.

► Know if the annual fee will increase over time

Simply put, annual fees are an ongoing cost that must be paid every year, making it a priority to know if and how much will increase. This fee covers the maintenance costs of a whole year and is divided amongst all owners of the unit (or units) proportionately to their ownership periods. Other costs, such as maid and concierge services, external facilities, and others, will also be factored into the fee.

All of this means that an increase in annual fees should go hand in hand with an increase in property value and the amenities that come with it, but since this is not always the case, you should make sure that you will not end up paying more for the same unit year after year.

► Find out if there will be future special assessments that cost you money as an owner

Significant remodels, or expansion plans, for the property, are added expenses, and you must know that they will be added to the cost of ownership. The better PRCs have a reserve account that is funded every year to cover a schedule of predictable replacement and repair needs.

► Research if the value of previous members’ ownership increased or decreased

As in all things real estate, slight decreases in value are standard. Massive depreciation, however, is not. A significant reduction in value means that your shares will soon follow and depreciate rapidly, so it is crucial to research this aspect before you make a decision. The investment aspect for most PRCs is in the annual savings, not large anticipated appreciation.

► Expected use of the home over time

Remember that, aside from the financial aspects, your family situation might also change over time. After vacationing at the same property for a few years straight, you might want to change things up and visit other properties around the world The children might no longer be children after a while and will want to see exotic locations, or maybe they have taken up surfing, golf, or skiing (which may or may not be satisfied by an exchange program).

When you consider the passage of time, a PRC that offers various ways and locations to spend your time can be the smart thing to buy. Not all private residence clubs use the same use system, so research is essential.

How Do Private Residence Clubs Compare with Other Luxury Vacation Options?

a living room with a wood ceiling

High – End Vacation Home

Owning a vacation home should be a pleasure, not a burden. A PRC offers all the benefits of a fully deeded luxury home without any of the upkeep and maintenance responsibilities that go with it. Your fractional vacation home will be perfectly maintained at a fraction of the cost, while you enjoy the level of service of a luxury hotel.

Read our in-depth guide if you are considering a vacation homeownership option.

Luxury Real Estate Private Equity Fund

Private residence funds are based on investing in a diversified portfolio of vacation residences.

An investment in a luxury real estate private equity fund promises a financial upside, as well as vacation savings. Investors are owners of the portfolio. As such, they participate in the portfolio appreciation and get their investment back upon the portfolio liquidation. Funds only accept accredited investors and require an upfront investment of at least $160,000. Fund investors can exit in 10 years when the properties are liquidated.

Luxury Real Estate Private Equity Fund Private residence club
Ownership structure Investors collectively own a portfolio of homes A buyer owns a deed to a fraction of a property
Financial upside Investors share in portfolio appreciation and portfolio rental income Varies. More often than not PRCs decrease in value at resale
Annual fees $0 – $11,000 Varies.
Out-of-Pocket cost per night at the residence $71-$130 $0
Initial Investment $160,000+ Varies. $234,000 on average, but can go much higher
Selection of residences Depends on capital contributions by investors. A non-levered fund only buys residences with available cash. Can hold up to 25 residences in the fund. Strategic partnerships significantly expand this number. Usually one resort/residence. Access to more residences can be obtained via an exchange program
Accredited investor status Only accepts accredited investors Accepts members without regard to the AI status

Compare Private Residence Clubs With Forms of Vacation Real Estate Ownership - Download Our Comparison Chart 

Destination Club

While the lines between a private residence club and a destination club can be blurry since the terminology is mostly interchangeable, there are a few key differences between them. Most notably, all PRCs offer real estate ownership, while a destination club can offer either equity ownership or, more commonly, a membership that gives you a right to use properties in the portfolio. Also, if you were to exit the club, a PRC interest would be offered at market price for a gain or loss. A destination club’s exit strategy might vary depending on the structure but, typically, annual fees include the cost of operating the homes and the company, a resale has to go through the destination club company and members get only a percentage of their initiation fee returned.

However, destination clubs offer a variety of properties in different locations for member use while private residence clubs may offer an exchange system, though not all of them.


Most states in the U.S. consider any real estate owned by multiple entities to be governed by timeshare law, including private residence clubs. However, timeshares laws grant certain valuable protections to their owners. Private residence clubs are in better locations than timeshares, far more luxurious, have far fewer owners per unit, and offer more amenities with much fewer people on the property at any given time. Plus, the ownership is deeded. Timeshares are often considered to be the pre-purchase of vacations and the financial value is realized after five or more years of use. Here is a quick list of the pros and cons of timeshares:

Pros of Timeshares

  • Some of them, though not many, do offer deeded ownership.
  • You know for sure that you can visit the property in the same period every year.
  • Certain flexibility to exchange for other vacations is afforded.
  • On average, it is less expensive than whole and even fractional ownership.
  • Just like with PRCs, there are no second home maintenance.responsibilities

Cons of Timeshares

  • Flexibility on when you can use the property is limited or sometimes non-existent.
  • You must pay the annual maintenance fee even if you didn’t use it.
  • Maintenance fees may include an annual profit for the developer
  • Exchange programs for other locations and experiences can be problematic.
  • It is more often than not a very downgraded experience from a high-end luxury vacation
  • Little or no resale value

Vacation Club

The operative term when talking about vacation clubs is “right to access,” and not ownership. A vacation club refers to a group of people that can share access to a variety of leisure properties, ranging from vacation homes to hotel rooms. A degree of confusion is added when you consider that many companies in the timeshare industry, aware of the bad reputation that timeshares have, call themselves vacation clubs.

The main differences between vacation clubs and PRCs boil down to the number of locations and ownership status. While vacation clubs offer a wider variety of properties for travelers who want to visit a new part of the world each vacation, these properties are usually leased by a parent company. They might not be available after a couple of years. Also, vacation clubs work on a membership basis, so you will not own any of the destinations.

Pros of Vacation Clubs

  • The variety of destinations and property types is excellent.
  • Availability to travel throughout the year (not locked into specific week or weeks)
  • Access to high-end private residences, including larger 4- to 6-bedroom that you couldn’t get otherwise
  • Customized concierge service offering to plan trips before and during your stay

Cons of Vacation Clubs

  • Relatively low entry
  • The availability of specific residences during specific times of the year is not guaranteed since the bookings are all made on a first-come, first-serve basis.
  • There are no benefits of ownership.
  • The exchange options are minimal and are usually dictated by the club itself.
  • There is no resale value
  • You pay an annual fee, nightly fee, monthly fee or a combination thereof for use of the homes which may or may not represent a significant discount over comparable rental rates

Condo Hotels

A condo-hotel is a hotel where the rooms have been sold to individuals as condominium units. These condo units will become a part of the hotel’s inventory that are rented to the public and operated by a hotel management company. This is an investment-driven product whereby rental income is shared by the owner and the management company and use by the owners is typically limited. If rental is mandatory and/or rental revenues are shared by all owners via rental pool, the purchase and sales transactions are covered by securities law, not real estate law. The many differences between condo-hotels and PRCs the size of the units, the building configurations, the use limitations, the rental emphasis and the securities aspect.

Private residence club exchange option

Owners of a private residence club can trade in their time for someone else’s at a different location. Several companies serve this particular niche, but it depends on the rules of your specific club. Some of them will only allow you to trade with other PRCs within their network, or might include hotel stays around their world if they are partnered with or managed by hospitality companies.

Is A Private Residence Club the Luxury Travel Choice For You?

a man and woman walking with children

Who will benefit from and enjoy a private residence club the most? We can say with confidence that PRCs have proven to be a very satisfying choice for many people with a high net worth, who pay for their fractional real estate interest in cash and for whom appreciation is not the primary purchase motivation. While fantastic options for leisure and luxury, PRCs should not be viewed as a financial investment —despite conveying real estate ownership.

The real target for private residence clubs is someone who will see their purchase as a lifestyle investment that provides annual savings over luxury vacation rentals, a private club environment, personalized service, a very predictable experience, and an alternative to the high costs and responsibilities of solely owning a second home in an increasingly expensive market. People who need a mortgage and can’t afford the annual fees and transportation costs, or globetrotters with a burning desire to visit a different destination every vacation are not the best candidates.

An accredited investor is someone who earned income that exceeded $200,000 (or $300,000 if married) in each of the prior two years, and reasonably expects the same for the current year; OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).