Is this a good deal?

afettere · Apr 29, 2016

I'm looking to purchase a timeshare with HGVC that meets the following 'requirements' that I have:

A decent chuck of points that I can use for flexible travel
is at a resort in a location I want (Hawaii, Florida)
Platinum season
is at a newer property
2 bedroom

So, with that in mind I found this property.

The dollar per point is higher than some other properties I've seen, but I also haven't seen many similar properties available...they have had fewer points.

My questions are as follows:

assuming I can negotiate this down a bit to $20 - $22,000, is this a good deal TODAY
would it clear ROFR
how much better would it get if I wait to purchase something later in the year (I've heard that November / December is the best time to purchase)

Jason245 · Apr 29, 2016

afettere said:
I'm looking to purchase a timeshare with HGVC that meets the following 'requirements' that I have:

A decent chuck of points that I can use for flexible travel

is at a resort in a location I want (Hawaii, Florida)

Platinum season

is at a newer property

2 bedroom

So, with that in mind I found this property.

The dollar per point is higher than some other properties I've seen, but I also haven't seen many similar properties available...they have had fewer points.

My questions are as follows:

assuming I can negotiate this down a bit to $20 - $22,000, is this a good deal TODAY

would it clear ROFR

how much better would it get if I wait to purchase something later in the year (I've heard that November / December is the best time to purchase)

If you are asking these questions you arn't even close to ready to make any purchase, so my answer is NO it is not a good deal.

Pricing also seems high in my opinion, but that is for others to tell you.

gmarine · Apr 29, 2016

I second that. Maybe a Hilton owner will comment but $22K for a resale timeshare is way too much IMO.

afettere · Apr 29, 2016

Jason245 said:
If you are asking these questions you arn't even close to ready to make any purchase, so my answer is NO it is not a good deal.

Pricing also seems high in my opinion, but that is for others to tell you.

Can you clarify why you are saying that? If anything I am looking for thoughts on pricing e.g. what would a reasonable price be? The price doesn't need to be "never seen it this low before" low, but along the lines of "the property you've linked to meets your criteria but a more reasonable price would be $XX,XXX."

As for the comment on prices being lower at the end of the year, I've seen a few threads mention that but it is not stated what that really means. So, any advice on that would be appreciated as well.

I'm not in a hurry and more interested in doing this right (meeting my criteria) and at a good price than just pulling trigger on what is only an OK deal.

afettere · Apr 29, 2016

gmarine said:
I second that. Maybe a Hilton owner will comment but $22K for a resale timeshare is way too much IMO.

The unit comes with 14,400 points/year.

SmithOp · Apr 29, 2016

afettere said:
The unit comes with 14,400 points/year.

I just paid $13K for the same thing in January, it was listed in the TUG marketplace. Keep looking. I had been looking for one of these contracts for a year before I found it at that price. I've seen them from $20K up to $27K depending on the broker.

Wgk101 · Apr 29, 2016

1. 14000 points is a decent chuck of points

2/3/4/5. Newer property, platinum, Florida-Hawaii, 2 bedroom
The only newer properties in Florida are in Orlando. Hawaii properties come at a premium. Platinum season is important only for booking home week or getting more points for you me, 2 bedrooms are available everywhere

I own 14k points in Vegas. Two plat 2 bed. I have been able to book wherever I have wanted to go at the times I wanted to go.. It takes diligence to make this happen.

Unless you want spcpecific weeks in Hi, at a higher upfront cost and higher mf I woul buy at a Lower price point and lower mf

7k two bed platinum season are going for around a $1 per point or less

Jason245 · Apr 29, 2016

afettere said:
Can you clarify why you are saying that? If anything I am looking for thoughts on pricing e.g. what would a reasonable price be? The price doesn't need to be "never seen it this low before" low, but along the lines of "the property you've linked to meets your criteria but a more reasonable price would be $XX,XXX."

As for the comment on prices being lower at the end of the year, I've seen a few threads mention that but it is not stated what that really means. So, any advice on that would be appreciated as well.

I'm not in a hurry and more interested in doing this right (meeting my criteria) and at a good price than just pulling trigger on what is only an OK deal.

Pricing has to be individually assessed based on your needs timing and wants.

You can always get a better deal..if you don't know pricing information you don't know how to value.

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SmithOp · Apr 29, 2016

afettere said:
As for the comment on prices being lower at the end of the year, I've seen a few threads mention that but it is not stated what that really means. So, any advice on that would be appreciated as well.

HGVC budget for right of first refusal is calendar year based, early in the year they are more likely to exercise rofr so resale prices go up. Sellers have just paid annual fees also, so they want to recoup that. At the end of the year HGVC has spent the rofr budget and sellers have annual fee bills coming due.

1Kflyerguy · Apr 30, 2016

I think SmithOp got a fantastic deal, from a motivated seller and a time when HGVC was not exercising ROFR.

I think the deal you found is a decent deal, and is in line with what premiere units at KL seem to go for. If you can negotiate it down, then its even better.

That said, there is almost always listings at similar price points so if your not in a hurry you can definitely continue to look around.

There is no guarantee HGVC will stop exercising ROFR at the end of the year, they could have a bigger budget this year, or they might have less...

But people always seem to be more to sell around the time of the annual dues.. Some people will start to list in the fall after they have used their points "one last time".. in an attempt to sell prior to next years fees. Others get motivated once they get the bill and want to sell.

One thing to keep in mind on waiting to year end, a sale may take a month or two to close and all the points to be available for you. If your tied to the school season, it may be harder to get a summer reservation in 2017 at some of the more popular resorts..

weems637 · May 1, 2016

Buying a timeshare is like buying a used car. Know what you are getting into. Feel good about how much you are willing to pay. If ROFR gets you, try, try again. Something to consider, buying several smaller blocks of points. Granted, the MF's will be a bit higher, but it is another option for you to consider.....

fernow · May 2, 2016

"Good deal?" is always an interesting question.

IMO- No, you do not have a "good" deal.

But is $5000 off MSRP on a new BMW a good deal? Depends on if you want a BMW. A KIA at sticker may be a better deal financially but not the car you want and therefore not a good deal for you. In one sense "If you are happy with it, then it is a good deal".

From a financial point of view, it depend on what you want to compare.

Is is a better deal then purchasing from the developer. Yes.

Have others paid less for this? My guess is the answer to that is YES. Purchases around $1/point are fairly common. Higher point units sell for slightly more PER POINT then lesser units because the MF fee per point is usually lower on the higher point units.

Compared to purchase of same/similar total points within the HGVC network? ie Buy 2 units, one for 7000 points and another for 8400 points? Your deal is probably similar or slightly better then doing that. Double MFs drive the equation here. Two units totaling more than your 14400 points will have MF plus one Club dues totaling at least $2500 and probably $3000 per year. Not good. Your deal probably has MF + club dues around $1600 (correct?)

Compared to renting a similar unit from VRBO etc? Your deal comes out at about $380/night over 10 years at 10 nights per year. Not great.

If you want to ave $250/night and your MF+club dues are $1600/yr, you can afford to pay $10,000 including closing costs for the unit assuming you "amortize" (not talking loan here, only accounting) over 10 years and use the points for 10 nights (1400 pts/night) of lodging per year. Your usage may vary.

No single answer, as it turns out.

Always remember. We want nights of lodging NOT points.

afettere · May 2, 2016

Thank you for all the great advice.

I've started to put together a spreadsheet so I can compare the various properties for sale now and try figure out the price over the next 10 years. It's a bit rudimentary and relies on the data in ads / ebay being correct. Here is a screenshot

Am I missing anything in the spreadsheet?

I'm assuming a 3% increase in maintenance fees each year - is that average? Other than going through the thread on maintenance fees, is there any database that has that info short of hacking into HGVC?

fernow · May 2, 2016

Your spreadsheet looks great. Nice comparison of the purchase options.

I have a similar spreadsheet but to "keep it real" I add $/night at the commonly available (rounded) points rates of 1000, 1200, 1400 and 1800 per night.

Again, I want to know how much I am paying for a night of lodging, not for so many points. Cost per night is largely driven by the MF.

If you pay $45k over 10 years and only rent at the 1000 pt/night rate, your cost per night is $320. But if you rent the not uncommon 1400 pt/night unit then you are paying $450/night. Ouch.

fernow · May 2, 2016

If you use $250/night as a target and 10 yr amortization, another interesting relationship is 1/9.

For every 1 penny reduction in MF/pt you can pay 9 cents more per point.

Jason245 · May 2, 2016

fernow said:
If you use $250/night as a target and 10 yr amortization, another interesting relationship is 1/9.

For every 1 penny reduction in MF/pt you can pay 9 cents more per point.

So at 250 a night we are talking about 1750 for the week... how much is a similar rental? There is no analysis in the spreadsheet to tell you if you really are saving any money..it just documents how much your spending will be..kinda one sided. .but what do I know.

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fernow · May 3, 2016

Jason245
The issue of "savings" is addressed in the post above the one you quote. By adding cells calculating nightly cost at the various points per night noted in the post, you can then compare that to other rental options.

I assumed everyone is capable of finding "comps" on VRBO or even Kayak, Hotels.com, Travelocity etc.

As and example, private units identical (same builder) to the Bay Club in Waikoloa rent on VRBO for around $250/night. Other locations and units will have different "comps"

In the post you quote, it is a simple rules of logic IF-Then conditional statement. In this case, the IF statement is a TRUE FALSE statement conjunction.

As with any such statement, you select your hypothesis and test the conclusion against it.

My calculations suggest that:

IF: your target is $250/night AND you use 10 year amortization
THEN: (to compare various offers) you can pay 9 cents more per point for every 1 cent reduction in MF/pt

newportbeach · May 3, 2016

Someone mentioned Bayclub and comps at $250 a night. I am too old to
learn spreadsheets but if 7,000 points could be obtained for $1,000 or for that matter 14,000 for $2,000 at a mf of $1350 per 1,000. I would assume that would out perform 14,000 points at $20,000. Plus there is no rofr at Bayclub.
Yes its only an associated HGVC but look at the capital savings vs the risk of
one day BayClub being no longer associated. Remember HGVC points are all
equal.

Ron98GT · May 3, 2016

RichardL said:
Someone mentioned Bayclub and comps at $250 a night. I am too old to
learn spreadsheets but if 7,000 points could be obtained for $1,000 or for that matter 14,000 for $2,000 at a mf of $1350 per 1,000. I would assume that would out perform 14,000 points at $20,000. Plus there is no rofr at Bayclub.
Yes its only an associated HGVC but look at the capital savings vs the risk of
one day BayClub being no longer associated. Remember HGVC points are all
equal.

The chance of that would be slim to none. They would have to liquidate the Kohala TS also, since it's built on the same property: they are joined at the hip, literally. Unlike most, if not all, of the affiliates, you book the Bay Club on the HGVC Club website. FYI, I own a 2-BDRM at the BC.

1Kflyerguy · May 3, 2016

The cost per night figure is really just another metric, and is not exactly representative of real life. I often more more than 7 nights out of my ownership by traveling in a lower season or only reserving a 1BR instead of the 2Br that i own.

That why i focus more on the cost per point figure.. I do track my reservation history, every time i book a club reservation i log the point cost, and then find the cost to book the same room or as close as i can get via hilton.com.

Its not perfect, but help me to calculate some type of value for my ownership.

Jason245 · May 3, 2016

fernow said:
Jason245
The issue of "savings" is addressed in the post above the one you quote. By adding cells calculating nightly cost at the various points per night noted in the post, you can then compare that to other rental options.

I assumed everyone is capable of finding "comps" on VRBO or even Kayak, Hotels.com, Travelocity etc.

As and example, private units identical (same builder) to the Bay Club in Waikoloa rent on VRBO for around $250/night. Other locations and units will have different "comps"

In the post you quote, it is a simple rules of logic IF-Then conditional statement. In this case, the IF statement is a TRUE FALSE statement conjunction.

As with any such statement, you select your hypothesis and test the conclusion against it.

My calculations suggest that:

IF: your target is $250/night AND you use 10 year amortization
THEN: (to compare various offers) you can pay 9 cents more per point for every 1 cent reduction in MF/pt

If rental is 250 a night and mf plus points "amortization" is equal it makes no sense to buy. You are taking on perpetual liability for zero benefits. My take is you should have payback within 3 years... anything longer than that doesn't make financial sense.

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rizzod206 · May 10, 2016

afettere said:
I'm looking to purchase a timeshare with HGVC that meets the following 'requirements' that I have:

A decent chuck of points that I can use for flexible travel

is at a resort in a location I want (Hawaii, Florida)

Platinum season

is at a newer property

2 bedroom

So, with that in mind I found this property.

The dollar per point is higher than some other properties I've seen, but I also haven't seen many similar properties available...they have had fewer points.

My questions are as follows:

assuming I can negotiate this down a bit to $20 - $22,000, is this a good deal TODAY

would it clear ROFR

how much better would it get if I wait to purchase something later in the year (I've heard that November / December is the best time to purchase)

Hi,

I am a Business Analyst by trade also shopping the market. In addition to tracking average prices like you have done, I also did a break even analysis which helps me determine if any particular unit is a "good deal" based on the price vs the MF.

I was feeling kind so I went ahead and entered your variables into my worksheet. The main assumption I have here is that you'll be using the 14,400 points to buy 2 weeks in a 2 bedroom at an equivalent cost of finding a hotel of $300 per night (conservative $4200, think Las Vegas or similar $150/nt 1BR or $300/nt 2BR). Most effective use would be 3 weeks of a 1BR but thats kind of a long vacation so seemed a little unrealistic-maybe not but seemed so for me!

Some other assumptions below

-3.5% MF increase per year based on compilation of MF increases I've databased from the TUG forum
-4.63 hotel increase based on the 2014/2015 YOY change on the top 16 US destinations from the HPI (Hotel Price Index) provided by Hotels.com. (I realize a longer term trend would be better but thats the best data I had available without much digging- some other sources I couldn't verify came in around 5% avg last 10 years but can't forget 2012 crash in this estimate so even that would be skewed).

If you would like a copy of the spreadsheet I'd be happy to share it. If we all buy low then we can effectively influence prices downward

It's best to input how YOU would vacation as that will give you the best idea of cost savings / personal value.

Looks like if you bought at $20,000 you'd break even at year 8 under conservative circumstances (assuming you booked a lot of Las Vegas or similar) and MF / Hotel indices continue along the assumptive trend lines.

Jason245 · May 11, 2016

Timesharenoob206 said:
Hi,

I am a Business Analyst by trade also shopping the market. In addition to tracking average prices like you have done, I also did a break even analysis which helps me determine if any particular unit is a "good deal" based on the price vs the MF.

I was feeling kind so I went ahead and entered your variables into my worksheet. The main assumption I have here is that you'll be using the 14,400 points to buy 2 weeks in a 2 bedroom at an equivalent cost of finding a hotel of $300 per night (conservative $4200, think Las Vegas or similar $150/nt 1BR or $300/nt 2BR). Most effective use would be 3 weeks of a 1BR but thats kind of a long vacation so seemed a little unrealistic-maybe not but seemed so for me!

Some other assumptions below

-3.5% MF increase per year based on compilation of MF increases I've databased from the TUG forum
-4.63 hotel increase based on the 2014/2015 YOY change on the top 16 US destinations from the HPI (Hotel Price Index) provided by Hotels.com. (I realize a longer term trend would be better but thats the best data I had available without much digging- some other sources I couldn't verify came in around 5% avg last 10 years but can't forget 2012 crash in this estimate so even that would be skewed).

If you would like a copy of the spreadsheet I'd be happy to share it. If we all buy low then we can effectively influence prices downward It's best to input how YOU would vacation as that will give you the best idea of cost savings / personal value.

Looks like if you bought at $20,000 you'd break even at year 8 under conservative circumstances (assuming you booked a lot of Las Vegas or similar) and MF / Hotel indices continue along the assumptive trend lines.

You are missing the cost of capital component to this.

Also the fact that in places like vegas one can rent TS accomodations for next to nothing (2BR can be got for $300/week on RCI last call). you could probably rent a 2BR there for 1200 or less per week, heck look at

http://tug2.com/MarketplaceClassifi...vada&ResortArea=6&ResortGroup=60&ForRent=True

Elara is ~$1k for a week in a 2BR.

All of a sudden, the $4200/year drops to ~$2400/year and pay back moves to the 16-20 year range.

rizzod206 · May 11, 2016

Jason245 said:
You are missing the cost of capital component to this.

Also the fact that in places like vegas one can rent TS accomodations for next to nothing (2BR can be got for $300/week on RCI last call). you could probably rent a 2BR there for 1200 or less per week, heck look at

http://tug2.com/MarketplaceClassifi...vada&ResortArea=6&ResortGroup=60&ForRent=True

Elara is ~$1k for a week in a 2BR.

All of a sudden, the $4200/year drops to ~$2400/year and pay back moves to the 16-20 year range.

That is true I did not factor in the cost of capital or opportunity cost of doing something else with the money. Depending on your credit that could make a huge difference. I used to be a loan underwriter and I've seen people leverage a paid-off car for a rate around 3% for timeshare- that's probably the best possible case scenario for financing.

Unsecured it would get pricey in a hurry, but if you have the money sitting around rates on savings accounts are ridiculously low so if you could leverage it to take vacations you would want to or already have planned to take at a discount there is value there.

rizzod206 · May 11, 2016

Jason245 said:
You are missing the cost of capital component to this.

Also the fact that in places like vegas one can rent TS accomodations for next to nothing (2BR can be got for $300/week on RCI last call). you could probably rent a 2BR there for 1200 or less per week, heck look at

http://tug2.com/MarketplaceClassifi...vada&ResortArea=6&ResortGroup=60&ForRent=True

Elara is ~$1k for a week in a 2BR.

All of a sudden, the $4200/year drops to ~$2400/year and pay back moves to the 16-20 year range.

I know there are occasionally times when you can get a 2BR for cheaper- I've rented a 2BR at the Grand Mayan Riviera Maya for only $700. However in general you have to be extremely flexible to find these deals and they can be unicorns depending on the season of travel. My assumptions were based on my own searches trying to find a 2BR unit in Las Vegas checking both hotels and timeshares in the month of October.

Ultimately sometimes you have to think about your own time value. Sure I found a 2BR at the Grand Chateau for $250 per night for a long weekend but I spent hours on end searching for the deal and most things I found were around $300. I would assume that an owner wouldn't have the same hassle- but could be wrong. I am curious if anyone could attest to the "Hassle Factor" of booking through HGVC as opposed to scouting rentals or hotel websites.

Is this a good deal?

afettere

Jason245

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gmarine

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afettere

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SmithOp

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Wgk101

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SmithOp

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weems637

fernow

afettere

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Ron98GT

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