Alternative Luxury Home Uses: Flexible Ways to Enjoy and Share Your Property

Luxury homes can be much more than a roof over your head. You can extract more value from your luxury home, especially during unused time, to suit your lifestyle. 

There's a rising interest in alternative models like fractional ownership and home swapping that offer both lifestyle and financial enrichment.

In this article, we explore these traditional and alternative models, diving into their benefits and drawbacks. 

1. Home exchange

Home exchanging allows you to swap your home with other equally luxurious properties in desirable locations worldwide. 

Platforms like HomeExchange Collection provide year-round access to a network of premium properties for a small annual subscription fee. It offers protections like cancellation protection, up to $2,000,000 in damage coverage, and member verification.

For luxury homeowners, home exchanging offer tremendous value in many ways, including:

• Affordable accommodations: Travel to your favorite destinations, without the added baggage of expensive hotels or luxury vacation rentals. These days, $1,000 may not even get you the top-end luxury suites. Whereas with home exchanging on HomeExchange Collection, you can stay unlimited nights in luxurious accommodations for $1000/year.
• Free pet sitting: Many travelers are pet lovers and exchanging homes enables you to find guests willing to care for your pets while you are away, for example by using the pet filter feature on HomeExchange Collection. No paid pet-sitting services or sending your pets to unfamiliar environments. Knowing your pets are in good hands, there's rest and peace of mind.
• Access to premium amenities while away from home: Enjoy the same elegance, comfort, and lifestyle you're used to, with access to amenities like home theaters, saunas, private pools, hot tubs, gyms, beachfront access, and much more. 

Swapping can happen in two ways:

• Direct or reciprocal swaps: When you and another owner stay at each other's home during a period that works for both parties. This means you'll be a guest and a host for the same owner. 
• Non-reciprocal or GuestPoint swaps: In this case, you can stay in another person's home, but they are not obligated to spend time in yours. By hosting you, they can earn GuestPoints, then they can use these points to stay anywhere in the world they'd like during any dates.

2. Co-ownership or fractional ownership

Although co-ownership or fractional ownership is not new, this model of luxury home use is experiencing a resurgence. 

The idea is that rather than outrightly selling your luxury home, you divide the property into portions and sell a fraction of it while retaining ownership of the remaining portions.

This option suits homeowners who view their luxury homes as investment vehicles. All the benefits or uses of fractional ownership include raising capital and mitigating real estate investment risks. 

Some drawbacks to consider include:

• Zoning and legal considerations
• What the co-ownership dynamics would look like, such as timeshare, which will require a water-tight agreement
• Property management and usage

3. Hosting private events

Hosting private events is another creative and lucrative way to make the most of a luxury home. 

You can host personal events like wine tasting or suggest your home to close friends and family looking for intimate settings for book readings or talks. 

Luxurious properties are often very spacious with picturesque views, two key features sought after for specific events like corporate and executive retreats, exclusive networking events, and at a push, even weddings. 

For weddings, location is critical. Properties in quieter neighborhoods or those with strict HOA rules may face restrictions due to noise, traffic, and parking. 

However, for homes in accessible yet private areas, offering your space for small-scale events is a definite possibility. 

Takeaway: Extract more value from a luxury home with a home exchange

There you have it, flexible ways to enjoy your incredible property.

It can be swapping your Los Angeles mansion for a luxury villa in Manila, or building social capital by hosting friends and family events. 

If home exchange sounds like something you'd like to explore, check out HomeExchange. If you have a luxury home, HomeExchange Collection might be a great fit for you! For an annual fee of $1,000, you can enjoy unlimited swaps to premium properties worldwide. Visit HomeExchange Collection today and explore the possibilities!

FAQs

Below, we answer some popular questions regarding luxury homes, including what qualifies as one and IRS guidelines: 

What defines a property as a luxury home?

Luxury private homes are distinguishable based on many factors, including quality of materials and finishing, situated in a coveted city or location, offering privacy, built on generous square footage, evident personalized touches by the owner, and containing high-end amenities like a gym, spa, sauna, and state-of-the-art electronics. 

At what price point does a home qualify as luxury?

There are many schools of thought on this subject matter. Some say a property qualifies as luxury if it falls into the top five per cent of properties in the region, based on market value, while others have a lower threshold at 10%. That said, the national median price of a single-family luxury home in the United States was $1,293,551 in 2024, likely in the more affordable locations. Villas and resorts command higher prices. 

How can I make my home feel luxurious, even on a budget?

We could write a whole article on this subject matter, but for the sake of brevity, here are a few tips to elevate your home into a luxurious retreat:

• Invest in statement pieces, including furniture, decor, and paintings
• Adopt a sophisticated color palette
• Upgrade your lighting fixtures
• Smartly use decorative molding and trim like wainscoting and wall paneling
• Add some natural elements like plants, stone, and wood

Also Read: Luxury Renovations That Increase Home Value and Curb Appeal

How do I upgrade or transform my current home into a luxury property?

Transforming your home into a luxury property requires significant financing. We recommend working with an interior designer to upgrade the look of your indoor spaces, investing in premium amenities like saunas and gyms, overhauling your outdoor space, upgrading key areas like the bathroom and kitchen with modern fixtures and aesthetics, and much more. You can start small, but have an overall plan from the onset so that every upgrade or remodeling fits into a larger picture. 

What are the IRS guidelines for owning a second home?

The IRS allows you to deduct mortgage interest on a second home ownership, just like your primary residence, all within the usual limits. Property taxes are also deductible, no matter how many luxury vacation homes you own. That income is tax-free if you rent your second home out for 14 days or fewer per year. Beyond that, though, you'll need to report the earnings and split your expenses between personal use and rental time. 

How can I reduce or avoid capital gains tax on a second property?

The three popular tips for reducing or avoiding capital gains include using a 1031 exchange to defer capital gains tax, renting out the home for rental income, or making it your place of primary residence. More importantly, consult a tax professional for more clarity and personalized tips to accrue increased tax benefits. 

Are high-end homes a smart long-term investment?

The short answer is that it depends. Location and local regulations play a crucial role in determining the long-term future of a luxury home as an investment. That said, luxury homes in premium locations are a wise long-term investment because they appreciate and are great for portfolio diversification. 

How does co-ownership of a vacation or luxury home work?

This model makes vacation home ownership accessible for more people. Think of a luxury house as pizza. An owner can split the pizza into any number of desired slices, say four. They may decide to sell one of the slices to other buyers. In this example, the owner now owns 75% of the property, while the other investor owns 25%.

Is participating in a home exchange program worth it for luxury homeowners?

Home exchange offers cost-effective travel without sacrificing comfort and existing lifestyle standards. It allows access to similar upscale properties to yours around the world and provides a more authentic, local experience. It also offers additional perks like pet sitting, house maintenance, and meeting the insurance requirements for long holidays. 

What is the most reliable platform for luxury home swapping?

HomeExchange Collection is the most reliable platform for luxury home swapping. All houses are vetted and scrutinized to meet the minimum high-bar luxury standards. The platform also offers various guarantees and protections of up to $2,000,000 in damage coverage to keep your home and belongings safe.