A tumultuous ride over the past 5 years got me thinking about the future of vacation home ownership. Things seem to be settling down. However, they are settling down at a snails pace compared to what we saw from the late 90’s to 2007. Was it a false surge in resort real estate? Absolutely! People were not buying for personal use but for financial gain. After all, prices were rising at record rates, and people were flipping contracts without closing and making big profits. And the bottom line was not views, or family enjoyment, but simply profits. How much and how quick.
I watched buyers line up at our launches and buy up to 28 units each. They did not care about the views, floor plans, and amenities. They only cared about how quick they could flip it and for how much profit. Financing? They never expected to have to close. A contract could be flipped a week later for a $100,000 profit.
Who do we blame? We could say the sales people for selling the wrong values. But can we really blame them since they were being paid commissions? Or maybe the mortgage lenders, who, with 5% down and easy to qualify programs, made buying multiple units achievable for people who really could not afford them. Or was it the buyer for being greedy? Remember the old game we all played as kids called Musical chairs? In 2007 the music stopped and the nine people standing had one chair to find. Maybe one out of nine of these flipping investors found a safe chair. The rest? Well, they probably gave it all back.
So, what is the future for second homeownership? Many of these owners now feel “stuck” with ownership and the expenses that come with it. In the past people could sell and buy a different second home every 5 years, however, in today’s economy most people who bought more than 5 years ago could not sell it for anywhere close to what they paid for it. So, owners are looking for more value. More benefits to turn an under-utilized asset into something that is more acceptable financially. Many have turned to short-term rentals or obtained travel benefits by joining luxury exchange or reciprocity clubs like 3RD HOME. And what was first driven by the economy will no doubt become the standard.
Wade Shealy
Founder, CEO, and Chairman
Firstly, in our society at large, we have evolved into a community driven by a desire for options. Whether it’s a second car or a second watch, or a second home, we have grown accustomed to having options expand our lives in multiple ways. At THIRDHOME, we understand this core human desire and are satisfying it in a new way, specifically within the second home market.
Secondly, the current economic climate has affected most industries, but the luxury property development sector has been hit harder than most. Selling real estate is now more challenging, and agents and developers need meaningful points of difference and added-value services to help drive sales. THIRDHOME has created a unique proposition that will differentiate its offering by creating an owner benefit that no one else is currently providing.
Built as a private club where members gain access to multiple luxury second homes via a limited access property exchange network, THIRDHOME has created a unique value proposition for second home ownership based on the principle of reciprocity. Enabling our members to ‘get out what they put in’ lies at the heart of everything do.
Our thinking is simple. If you own a luxury second home, you should not have to pay rental rates to use others when you travel. Use your second home to give you a THIRDHOME anywhere else in the world.
The Club has rapidly grown to over 14,5000 properties in 100 countries worth an average of $2.4 million each. Members have access to a network of other homes of a similar level all over the world. And, given the economic climate, everyone is looking at what they own through different lenses and asking themselves – ‘Am I getting the most value possible from owning this particular home?”
THIRDHOME is the answer to the main question and concern that prevents the purchase of a second home – before I buy this property, am I sure that I want to be coming back here year after year?
Now, with THIRDHOME membership, a single second home now opens the door to hundreds of others all over the world for a reasonable membership and a nominal reservation fee.
THIRDHOME will revitalize vacation home sales and resort/luxury property investments and provide second home-owners with a win-win way to leverage their investment.
To find out more, visit https://www.thirdhome.com/