[2017] Just Joined Marriott Vacation Club - Was it a good choice?

[dioxide45]

I would expect some type of payback on the "investment" withink 5 to 10 years. If it would take you 20 years to break even, you are far better off just doing what one is already doing. Who knows what will happen in 20 years. One thing is known, if the economy tanks, hotel rates do drop, but MFs continue to increase. That was seen in the last recession. Hotel rates don't increase in lock-step with MFs.

 

[dioxide45]

So then you unload and move on. I realize it might not be the wisest approach for most people but I don't think it's that big of a deal. Many tuggers started out paying quite a bit for their timeshares but I don't think many regret it.

The important thing is using it. I think most people that are unhappy with timeshare, simply don't use their timeshare. If they take some time to learn how to use it, they are usually very happy with the product.

However, you simply won't find a single financial adviser (TV or otherwise) who suggests buying a timeshare. Though they are talking to the masses, and for people who go on a vacation once every few years, timeshare simply doesn't work. I know some people at work who haven't been on a vacation like we have in all the time that I have worked with them (15+ years). Many people when they travel stay with family or friends and have $0 in lodging costs. Timeshare doesn't work for them either.

 

[Jason245]

Yes. But they are very expensive. Compared to booking on Marriott.com, Points ownership is a good deal.

Travel insurance is cheaper than buying a ts.
And anyone willing to come up with that type of math is just rationalizing. (No offense I have been there myself).

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[JIMinNC]

Travel insurance is cheaper than buying a ts.
And anyone willing to come up with that type of math is just rationalizing. (No offense I have been there myself).

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We'll have to agree to disagree on that. As I outlined in a post last night, there are lots of reasons to want to own vs rent that travel insurance can't help with.

What works for you may not work for us all. Don't project your values and preferences onto others.

It's 72 degrees in Feb. I'm going to play golf....

 

[Jason245]

I would expect some type of payback on the "investment" withink 5 to 10 years. If it would take you 20 years to break even, you are far better off just doing what one is already doing. Who knows what will happen in 20 years. One thing is known, if the economy tanks, hotel rates do drop, but MFs continue to increase. That was seen in the last recession. Hotel rates don't increase in lock-step with MFs.

So you would be willing to put 10s of thousands of your money in an "investment" where you are cash flow negative for a decade(won't earn anything on it for 10 years and if you sell before that time you will get less than face back) even while inflation eats away at the principal?



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[Jason245]

We'll have to agree to disagree on that. As I outlined in a post last night, there are lots of reasons to want to own vs rent that travel insurance can't help with.

What works for you may not work for us all. Don't project your values and preferences onto others.

It's 72 degrees in Feb. I'm going to play golf....

As long as you are happy at end of day that is all that matters.

I am going to the beach In a few hours myself.

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[GregT]

So you would be willing to put 10s of thousands of your money in an "investment" where you are cash flow negative for a decade(won't earn anything on it for 10 years and if you sell before that time you will get less than face back) even while inflation eats away at the principal?



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Yes, I would, and I would do again. The return that I am getting is not financial and it is priceless.

Your points are very valid -- from a strict financial perspective.

The points made by others are equally valid, but must be viewed through a different lens. Some value control. Some value pride of ownership. Some value knowing that they will return again and again and again. Renting plays an important role, no doubt, but so does ownership.

OP is at peace with his decision and the hybrid purchase certainly improved the financial metrics. I am happy for him -- trusting that the purchase does not create a financial strain -- and hope he has many happy years of timeshare ownership with his family, and many happy memories coming. I just came back from my 78th vacation since 2005, 60 in timeshares. This one was with my son on the Big Island (HGVC Kings Land) and it was spectacular. The one on one time was priceless, and listening to the stories that he recounted to our Uber driver on the way home were something I will remember for a long time.

And I couldn't have made this trip possible without timeshares. I couldn't have accomplished my trip through renting. I made three different HGVC reservations about 6 months ago, because I didn't know what week in February I could actually travel, do to work complications. So I made the three reservations, planning to cancel two and it wasn't until early January that I knew which week I would travel. So there is a value to canceling reservations too...

Best,

Greg

 

[SueDonJ]

I will never understand why some TUGgers insist on trying to convince others that the only correct ownership of a timeshare is as a financial investment vehicle, and that means they must be purchased as inexpensively as possible and used as cost-effectively as possible. That's the justification some have to satisfy for themselves in order to own timeshares. All well and good for them, but some others of us simply bought to use and we're happy as long as our timeshares are giving us the value we expected.

I'm married to a tax professional who spreadsheets the hell out of life and looks for dollar implications in the phases of the moon. During the early years he searched out bargains on everything we ever purchased and insisted that we prioritize cost over ever other factor, only to learn (as Jim did) that the convenience and protections afforded by a direct vendor can be many times more valuable than upfront dollars saved. When we started looking at timeshares we both decided we'd deal directly with Marriott, we'd purchase at specific resorts for usage there rather than exchanging, and we wouldn't overspend what we'd budgeted upfront. That's exactly what we've done and we've never regretted our decision, despite knowing that others have done the same things via fewer dollars. We have NEVER during a timeshare stay looked around at all the other people wondering how our costs compare to theirs. We simply don't care about other people's budgets and spending habits.

ANYBODY with even the slightest money sense will tell you that timeshares are not a practical monetary investment. They'll tell you that if you learn all the ropes and have time to devote to property management you might be able to make money through ownership, but the products themselves and the management model will always be subject to fluctuations that can/will adversely affect your bottom line. For investment purposes we carefully investigate and use products designed for that specific need. Our timeshares don't fit that bill, and that's okay.

 

[Fasttr]

You also never took into account the opportunity cost of the cash you used for buy in (e.g. the interest you would have got on your "investment.

I believe the OP has, but perhaps you are not understanding his analytical approach.

Here is another way to look at it from the OP’s perspective of comparing his purchase to booking on Marriott.com. I offer up one example from the middle of the value curve from the OP's list of examples he provided in a later post....

Surf Club Aruba December Week 2-bd Oceanview 3500 4505 $1.29
With 3500 being the points needed to secure the ressie and 4505 being the cost in cash it would take to secure that ressie if booked on Marriott.com

So lets look at it this way. To buy those 3500 points, the OP feels he will be all in around the $7 per point mark, so let’s call it a $24,500 investment to cover those 3500 points

The annual MF’s on those 3500 points is approx. $1855.

So OP’s upfront investment of $24,500 saved him the difference between paying $4505 and paying the $1855 he paid in annual MF costs to secure that specific ressie.

$4505-$1855 = $2650 annual outlay savings to secure that specific ressie.

So OP’s investment of $24,500 returned $2650 for him, or about 10.8% return on that initial investment.

By using an example in the middle of his range (of course some deals are better and some are worse), I feel I am using a reasonable example.

Again, I am comparing his rate of return to Marriott.com, as he has justified in numerous posts, is the benchmark to be used for HIS investment decision, as he would not be a Redweek renter, so any example comparing to that source of reservations for HIM is not viable.

 

[Jason245]

I will never understand why some TUGgers insist on trying to convince others that the only correct ownership of a timeshare is as a financial investment vehicle, and that means they must be purchased as inexpensively as possible and used as cost-effectively as possible. That's the justification some have to satisfy for themselves in order to own timeshares. All well and good for them, but some others of us simply bought to use and we're happy as long as our timeshares are giving us the value we expected.

I'm married to a tax professional who spreadsheets the hell out of life and looks for dollar implications in the phases of the moon. During the early years he searched out bargains on everything we ever purchased and insisted that we prioritize cost over ever other factor, only to learn (as Jim did) that the convenience and protections afforded by a direct vendor can be many times more valuable than upfront dollars saved. When we started looking at timeshares we both decided we'd deal directly with Marriott, we'd purchase at specific resorts for usage there rather than exchanging, and we wouldn't overspend what we'd budgeted upfront. That's exactly what we've done and we've never regretted our decision, despite knowing that others have done the same things via fewer dollars. We have NEVER during a timeshare stay looked around at all the other people wondering how our costs compare to theirs. We simply don't care about other people's budgets and spending habits.

ANYBODY with even the slightest money sense will tell you that timeshares are not a practical monetary investment. They'll tell you that if you learn all the ropes and have time to devote to property management you might be able to make money through ownership, but the products themselves and the management model will always be subject to fluctuations that can/will adversely affect your bottom line. For investment purposes we carefully investigate and use products designed for that specific need. Our timeshares don't fit that bill, and that's okay.

For me it is more about loss mitigation than getting best deal.

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[davidvel]

I like your buckets, but will offer one clarification to the statement bolded above.

Points owners don't really get access to any unit before everyone else. While the detail behind the inventory assignment process used by MVCI is somewhat opaque, what we do know from the legal governing documents that support the program is that you can think of it as two buckets of inventory:

1. The Weeks Bucket. This includes traditional MVCI weeks which are NOT enrolled in the Destination Club, plus those which are enrolled, but the owner elects not to convert their week to points in any given year. These weeks are available to owners to book at their home resort for use, or to deposit to Interval International for trading purposes. Weeks owners are competing only with other weeks owners for the inventory in this bucket. Reservations can be made at 12 months, or 13 months for multi-week owners.
2. The Points Bucket. This includes all weeks owned by the MVC Trust (which is the inventory that backs up the Points you are buying), plus the weeks that Weeks-based owners "elect" for points in any given year. These "elected" weeks are deposited into an entity referred to as the MVC Exchange Company. (There are also other ways weeks may find their way into the Exchange company, such as weeks owners convert to Marriott Rewards points might be put into the Exchange Company by MVCI.) Under the program rules, the inventory in the MVC Trust is available for booking ONLY by other Trust Points (like those 4,000 you own now). Trust owners also have access to the inventory deposited into the MVC Exchange Company. Enrolled owners who do not own Trust points can only access the inventory in the MVC Exchange Company. In actual practice, however, the weeks owned by the MVC Trust usually get deposited into the MVC Exchange Company sometime very early in the reservation window, making them available to ALL points - both Trust and Enrolled/Elected - at that point. Points reservations can be made at 13 months out (the lowest level owners pay a 20% premium to book prior to 12 months out), but not all of the inventory gets released at 13 months. MVCI holds back at least half and saves it for the 12 month release date.

So, bottom line - weeks inventory stays in the Weeks bucket and can only be claimed by other weeks owners. Points inventory stays in the Points bucket and can only be claimed by Points.

Note: This theory has never been confirmed, and the governing documents do not support creating "buckets" allowing reservation of weeks by owners (whether you, me, or the trust) only within said buckets.

 

[Quilter]

Had trouble sleeping last night. Could have been the 2 Dr. Pepper's I had while driving to Williamsburg. Should have invested my money instead of buying them.

So, for distraction and to bring on a sense of sleepiness I went back to the 1st page of this thread. With the first reading I was lost on the math. New pricing for DC points and the incentives is different than what I was accustomed to as a buyer of weeks. Us weeks buyers were offered MR 180K points which would get us to any hotel in the world and pay for our airfare. (1999) Then that changed to other variations of MR points packages or a free week at a timeshare property. We would work our MR points packages to see if we could get 2 "world" trips" and we did.

Rereading the math that began this thread was similar as you have to come up with some value for the points so you can add and subtract. Wow it reminded me of a thread I posted in 2003 defending our purchase of MSE. We ended up with 580+ MR points which was enough for 2 travel packages in high Cats. The Sequel is a lock-off so I added the value of 2 weeks for 1 MF. In the end we paid 18,9K for the week. Too much. But I consoled myself that it had value as a good trader and we'd get 2 weeks out of 1 MF. With the DC it's now a point generator. It's not a large amount of points but when you break down the MF to point ratio it's close to $.50 so it's comparable to DC points MF. I work those points for a decent rate of return.

Our MCV purchase has turned into a rental with decent return.

We're into MVC with about a $100K. If we had invested that $100K it would have gone through the downfalls of Y2K, 911, "The Great Recession". There's no guarantee how much of the $100K would have survived.

We did get value for that 100k. 24 travel packages. Couple million points have flowed through both our MR accounts. We've each had a million+ miles flow through our AA accounts. Not to mention the other airlines. Southwest and the companion pass being the latest of our goals

As others have said. . . family memories. Priceless.

Some of the comparisons made to other products do not ring true to me. Apples and oranges comparisons to jewelry stores and used cars are not relevant to me because the end product will not the same.

Whether you rent from an owner or pay the big bucks to "own" a Marriott TS the end product at the chosen resort is exactly the same. The units are the same, the weather will be the same, resort activities are open to everyone. No one cares on site whether you rented or "own".
We have never rented points, we always rent weeks from owners and the process is so easy. There are so many weekly timeshare rentals available, lots of Marriotts. Some people we know rent the same unit from the same owner over and over, a golf week in HHI late March early April.

I agree this thread is most informative and it hit a nerve for many on both sides of the fence.

Not so. There is a hierarchy to room placement. Owners get priority. DC falls below that. II falls below that. marriott.com falls below that.

 

[davidvel]

Not so. There is a hierarchy to room placement. Owners get priority. DC falls below that. II falls below that. marriott.com falls below that.

Not necessarily. Both DC and Marriott.com allow you to "purchase" specific view categories. You will get that view category. With II, you are guaranteed nothing, and will likely receive it.

 

[vacationtime1]

Not necessarily. Both DC and Marriott.com allow you to "purchase" specific view categories. You will get that view category. With II, you are guaranteed nothing, and will likely receive it.

I think Quilter is saying that within each view category there is a hierarchy for room assignments; owners get the best OF rooms, OV rooms, etc.

That said, a private renter (i.e. not a rental through Marriott) should get the same room that the owner from whom it is rented would have received.

 

[Hi I'm new here]

I'm going to stop talking for a while, some of you will be pleased and I'm sure Marriott would love to silence me. I hope the conversation continues indefinitely and at some point I'll jump back in.

Anyone who wants to enjoy a Marriott timeshare can rent through owners for the same or less an "owner" pays in yearly maintenance fees. One and done rental, no ongoing obligations. This same renter could take the upfront investment the OP wants to make, roughly fifty thousand dollars and dollar cost average this money into a mutual fund. Historical averages of various funds, the rule of 72 and ignoring short term market fluctuations will result in a tidy sum of cash twenty years later. They could still enjoy the same Marriott timeshares but they haven't tied up any cash.

Anyone who wants to take the OP's route and spend fifty thousand dollars in 2017 to "own" will likely recover very little of that investment in twenty years. Yearly maintenance fees make this an unattractive product to the masses. This person will also pay several thousand dollars annually in yearly fees to stay in the same unit others rent. I don't recall any particular pride of ownership and my actual experience as an "owner" was no different than when I rented. "Ownership" obligates you to ever increasing yearly fees. "Ownership" gives you the right to exchange points for timeshare usage that is easy to rent.

I keep putting the word "ownership" in quotes. This appears to be a state of mind for some but it is a poor financial decision.

Good luck to the OP and any other newbies.

 

[dioxide45]

I will never understand why some TUGgers insist on trying to convince others that the only correct ownership of a timeshare is as a financial investment vehicle, and that means they must be purchased as inexpensively as possible and used as cost-effectively as possible.

Why? Because it is true My way is always the right way!

 

[BocaBoy]

I thought we had fully debated this issue in one of the best threads I can ever remember seeing on TUG. I don't think Jason 245 read the first 200+ posts because he is starting at square 1 and raising the same old questions with no acknowledgement of the points in those discussions and apparently no recognition of the OP's goals in joining MVCI. Jason, do you have any new perspectives to add to what has already been said?

 

[taffy19]

For me it is more about loss mitigation than getting best deal.

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What does this mean? Can you explain.

 

[BocaBoy]

Why? Because it is true My way is always the right way!

So true. We don't always have to agree, and you and I have certainly disagreed on many occasions (although not so much recently), but much is to be learned by having an open mind.

 

[Jason245]

I thought we had fully debated this issue in one of the best threads I can ever remember seeing on TUG. I don't think Jason 245 read the first 200+ posts because he is starting at square 1 and raising the same old questions with no acknowledgement of the points in those discussions and apparently no recognition of the OP's goals in joining MVCI. Jason, do you have any new perspectives to add to what has already been said?

They are not old questions. They are the basics.

If OP has reached the point where they believe they are fully educated and that a purchase from developer still makes sense than tug has done it's job.

Ultimately, it is no skin off my back either way. That being said, OP appear to be rationalizing and has some form of deep seeded fear in doing anything outside of big Corp channels. There are people like that and ultimately they have to do what is comfortable for them.

I find having insurance and an attorney is much cheaper. I also find that there are so many quality rentals offered from sites like airbnb, hotels.com etc that I can accommodate those needs as well. Ultimately, the OP has a low risk tolerance, and as such they pay the premium.

As long as they walk into the deal with their eyes open and know that their sunk cash flow is very large and they are willing to accept(and have the money) watching enough cash to pay for a car just evaporate after purchase and rescind time expires.

There have been to many on these boards that realize too late that these "deals" are sand pits.



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[Jason245]

What does this mean? Can you explain.

From my research, most if not all timeshare ownerships go down in value, either through prices remaining static (inflation impact) or the units falling to near worthless as rofr stops being exercised.

Given that, it becomes a game of getting the best product you can while mitigating my cash flow loss.

Cash outflows are buy in (sunk cost with no assumed recovery), club or membership fees, reservation fees and mf.

My goal is to be able to dump whatever I own and know that from a cash flow perspective, I lost as little as possible. Once I hit breakeven, it becomes a annual mf to stay value assessment.

The sooner I breakeven the better. And any cash flow loss is mitigated.

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[GregT]

Anyone who wants to enjoy a Marriott timeshare can rent through owners for the same or less an "owner" pays in yearly maintenance fees. One and done rental, no ongoing obligations.

What you say is correct, but please also recognize the value of being able to cancel without penalty. I would reiterate again comments from my post above that there is significant value in being able to cancel a reservation, not just in the securing the original reservation. I just returned from a vacation that could never have happened with owner rentals and it was tremendous one on one time with my son.

There are far too many variables to reduce this down to a one-structure-fits-all solution. For me, my work heavily impacts when I can travel, and I may not know until very close to the travel dates what is possible. So, I currently am holding two reservations at Ritz Carlton St. Thomas (Thanksgiving 2017 and February 2018), one at HHV (across Veteran's Day in 2017), one at Ko Olina (across President's Day 2018) and one at Elysian Beach Resort (March 2018).

I will maybe use one or two of them and will cancel the others -- but I have no idea what work will be like across all those dates so I will make the reservations and then cancel them (or rent them) as desired. The only one that is modestly problematic is the Ko Olina, because it's an II trade. But I'll cancel that if I have too.

For summer 2017, I've got lots of contiguous reservations in Hawaii (WPORV, MOC, Ko Olina, Grand Waikikian) -- I just shortened the WPORV reservation from 12 days to 7 days because it's clear now I can't take the full trip, and Grand Waikikian will likely also be canceled.

But, this structure -- true flexibility -- would not be possible without owning the different timeshares. Plus, it's fun for a quantitative person like me!!

Best,

Greg

 

[Jason245]

What you say is correct, but please also recognize the value of being able to cancel without penalty. I would reiterate again comments from my post above that there is significant value in being able to cancel a reservation, not just in the securing the original reservation. I just returned from a vacation that could never have happened with owner rentals and it was tremendous one on one time with my son.

There are far too many variables to reduce this down to a one-structure-fits-all solution. For me, my work heavily impacts when I can travel, and I may not know until very close to the travel dates what is possible. So, I currently am holding two reservations at Ritz Carlton St. Thomas (Thanksgiving 2017 and February 2018), one at HHV (across Veteran's Day in 2017), one at Ko Olina (across President's Day 2018) and one at Elysian Beach Resort (March 2018).

I will maybe use one or two of them and will cancel the others -- but I have no idea what work will be like across all those dates so I will make the reservations and then cancel them (or rent them) as desired. The only one that is modestly problematic is the Ko Olina, because it's an II trade. But I'll cancel that if I have too.

For summer 2017, I've got lots of contiguous reservations in Hawaii (WPORV, MOC, Ko Olina, Grand Waikikian) -- I just shortened the WPORV reservation from 12 days to 7 days because it's clear now I can't take the full trip, and Grand Waikikian will likely also be canceled.

But, this structure -- true flexibility -- would not be possible without owning the different timeshares. Plus, it's fun for a quantitative person like me!!

Best,

Greg

Insurance gives that flexibility. .and if you can't plan in advance .. ts isn't necessarily the right product.

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[dioxide45]

What does this mean? Can you explain.

I think what is meant, if you only spend a small amount of money, you only have a small amount to lose. If you spend big bucks and it doesn't work out, you are out big bucks.

 

[Jason245]

I think what is meant, if you only spend a small amount of money, you only have a small amount to lose. If you spend big bucks and it doesn't work out, you are out big bucks.

That too..

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