Excerpt from our comprehensive Decision Guide to Destination Clubs. Click here to request a free copy (downloadable PDF).

Top 10 Terms: Asset Value

Almost every destination club quotes an average asset value for their portfolio of homes. $3 million, $4 million, $5 million – it’s become a game of escalation as new clubs target more and more expensive properties to distinguish their offer from existing players. The figure is designed to give you a comparison point against a second home you might purchase or already own.

The chart below shows the correlation between average asset value and the pricing tier of the destination club.

Everyone knows the cliche about real estate: location, location, location. Two different clubs could own very different homes in the same destination. One is on the mountain, has five bedrooms, and allows ski-in/ski-out access. The other may have three bedrooms and require a ten-minute walk to the lifts. The size and actual site of the residences drives asset value, yet both homes offer a fantastic ski experience.

The average asset value is better viewed as a “target” than an “actual.” Barring a real estate slowdown, the value of homes in a clubs portfolio increases over time. Is the average based on the acquisition price or a recent, independently-appraised value? Also, does the value include the value of furnishings?

An average value could be skewed if a club owns a few marquis properties, raising the average, or if a club has acquired a number of urban homes, which tend to be lower in value than beach or ski properties. Some clubs provide two different average asset values to distinguish between resort homes and city homes.

Rather than rely on the average value as a metric to compare one club against another, we recommend you study the floor plans and actual sites of the residences to gauge their fit to your family’s travel needs and ask about the value of homes in development in the next 6-12 months.