When second home ownership got hot over the last decade, and seemingly every friend and co-worker dumped cash into Lake Tahoe ski cabins or beach homes in the Hamptons, another phenomenon emerged. Destination clubs sprung from the idea that one vacation home simply wasn’t enough. In fact, neither were two, four or six homes for that matter.

Destination clubs give members access to a portfolio of properties, from beach retreats and ski chalets to swank urban pied-à-terres and homes that abut big-name golf courses. A one-time, typically partially refundable membership fee along with annual dues secure access to a set number of nights to spend at a club’s portfolio of homes. Deposits range from $30,000 to $1,950,000, and annual dues start at $2,300 but can go up to as much as $86,000 a year. But before you write that big check (most clubs don’t have financing options), you’ll need to fully evaluate a club, looking at its property portfolio, pricing structure, reservation policies and, most importantly, your exit strategy.

It’s all about location

What will first draw you to a club is its mix of destinations: Ski properties in Colorado or Utah to get you on the slopes at least once a winter, beach homes in Cabo San Lucas and city condos that can fill any suburbanite’s need for an urban fix. If it’s a popular resort area, chances are that a destination club or two has planted their flag there. There are exceptions; homes need to appeal to a wide swath of vacationers and attract visitors on a nearly year round basis, so forget finding a club with properties in popular summer time haunts like the New Jersey shore or Martha’s Vineyard. Also, a club will likely tout a list of areas that it’s eyeing for future development. In truth, those homes could be available in just a few months or might be years away from being ready to use, so make sure a club’s property game plan matches your own needs.

Understand the pricing structure

The membership deposit is the largest single financial component of joining a destination club. Clubs often have various levels of membership, with the more expensive offerings offering more nights and a higher number of advanced reservations. These are key because they allow members to plan more vacations in advance and, in theory, increase the chances of landing their desired home, even in prime vacation months. Median dues hover around $20,000 and cover property taxes and association fees in communities, and also go towards a capital reserve fund for property repairs.

Before you join take a hard look at a club’s financials. In 2006, the second largest destination club, Tanner & Haley, imploded into bankruptcy and all of its members were faced with the possibility of losing their deposits. The debacle prompted the formation an industry trade group that called for greater financial transparency, assuring members that deposits are backed by the club’s real estate assets or cash reserves. Look for clubs that provide third party-audited financial statements. As another level of due diligence, look at how many homes the club owns versus how many are leased. Clubs should own 70 to 80 percent of their property portfolio and leases should not make up the bulk of a club’s property portfolio if they are promising refunds on member deposits.