Rent vs. own comparison for a few timeshares I follow

ronparise · Jun 26, 2016

skotrla said:
Yes, you are correct that before deciding to rent vs. buy you have to decide you want to go to a resort, likely after having been there a couple of times already - we visited Escapes Galveston twice as renters and then bought before our third trip. I would agree that doing a rent vs. buy analysis for a place that you didn't plan to go wouldn't make much sense.

I only started the analysis to the point of paralysis is response to objections with my methodology, like when it was suggested that hotels.com with 1000 possible stays at a specific resort was not a fair comparison to being an owner and that redweek.com with 3 possible stays was a better comparison. I've spent 10x as long on the back and forth posts as I did on the first hotels.com comparisons to 5 resorts - I definitely overanalyze things, but I thought the 60s per resort quick comparison I initially did was pretty simple. Given that this thread is the most active thread I've participated in for the last several months, I am enjoying providing responses to good points that people bring up.

I don't really agree that this isn't valid to someone not looking to rent units out. If your ownership is not going to give to a substantial discount over what you can get as renter (with comparable availability), then ownership (at least of the float/points kind) doesn't make much sense. My comparisons were at decent maintenance fees - clearly at the high end maintenance fees that some people pay (even if purchased at a low cost via resale), you won't break even when compared to renting.

-Scott
Owner, HICV Google+ Group

The point I was trying to make is that as important as some sort of financial analysis is, (or should be) when purchasing a luxury item its usually being done (or should be) with discretionary funds, The assumption is made that the kids college fund is properly funded, that retirement funds are on track, that your income is solid, that you have a roof over your head and you are not worried about tomorrows dinner. . When spending what I call "mad money" squeezing the most value out of each dollar isnt always the most important thing.. I know Id rather own my car than lease, own my house rather than rent and own my vacations rather than stay in a hotel or other rental property. There is one resort where, when I walk in the lobby, the staff greets me by name. I like that. Thats worth something to me but I cant figure out where to plug that into my spread sheet

The point is, its not always about the money.

skotrla · Jun 27, 2016

ronparise said:
The point I was trying to make is that as important as some sort of financial analysis is, (or should be) when purchasing a luxury item its usually being done (or should be) with discretionary funds, The assumption is made that the kids college fund is properly funded, that retirement funds are on track, that your income is solid, that you have a roof over your head and you are not worried about tomorrows dinner. . When spending what I call "mad money" squeezing the most value out of each dollar isnt always the most important thing.. I know Id rather own my car than lease, own my house rather than rent and own my vacations rather than stay in a hotel or other rental property. There is one resort where, when I walk in the lobby, the staff greets me by name. I like that. Thats worth something to me but I cant figure out where to plug that into my spread sheet

The point is, its not always about the money.

I assume that your preference to owning over renting has some economic bounds. Generally speaking, owning is expected to be the cheaper solution in the long run, and time preference might drive you to be an owner. However, I think there are some places in CA that do 50yr mortgages on homes now - I imagine there are many cases there where owning costs significantly more than renting.

Regarding staying in the same place on vacation regularly and getting to know the staff, in my opinion those benefits tend to be independent of owning vs. renting. Remember that in my analysis, I'm looking at renting vs. owning at the exact same resort. If renting is cheaper than owning (with comparable availability), then you could presumably go there just as often if you were so inclined.

-Scott
Owner, HICV Google+ Group

ronparise · Jun 27, 2016

skotrla said:
I assume that your preference to owning over renting has some economic bounds. Generally speaking, owning is expected to be the cheaper solution in the long run, and time preference might drive you to be an owner. However, I think there are some places in CA that do 50yr mortgages on homes now - I imagine there are many cases there where owning costs significantly more than renting.

Regarding staying in the same place on vacation regularly and getting to know the staff, in my opinion those benefits tend to be independent of owning vs. renting. Remember that in my analysis, I'm looking at renting vs. owning at the exact same resort. If renting is cheaper than owning (with comparable availability), then you could presumably go there just as often if you were so inclined.

-Scott
Owner, HICV Google+ Group

So as i have suggested we all have our own reasons for doing things. I'm not questioning yours I'm only saying for me I'd rather own a thing than rent it.
And as long as I can afford to indulge that preference that's what I'm going to do

For example at my age I probably only have 15 years of independent living left. At a fair market rent of about 20000 a year, if I rented I'd spend about $300000 over those 15 years. So how much sense does it make that just spent $300000 to buy it and will have to spend another $75000 in taxes and insurance not to mention the necessary maintenance? Not much, but I did it anyway. We won't even talk about the relative cost of owning two boats vs renting for as much as I use them. But I like owning this crap.

You know what they say. The guy that dies owning the most toys, wins

It's not all about the money

Robert D · Jun 28, 2016

I own a lot of timeshares that I rent during the peak ski season in Vail and Avon, CO. Even during the peak season, I'm happy if I can get 50% - 70% of rack rates for my rentals, depending on the resort. If I can't make decent money at those rates, I don't want to own them. Renters will always pay more to rent directly and when they do, they can rent less than a full week and they usually get daily housekeeping service. I wouldn't use more than 60% of rack rate in your rent vs. buy analysis. If it's even close, you're better to rent because you don't have the liability of having to pay the maintenance fee each year, which almost always go up. That said, I agree with Ron that if you're going to use the condo each year, then that skews it toward owning.

John Cummings · Jun 28, 2016

We rented a 2 BR unit at Wyndham Beachwalk Waikiki in April for $700 /week.

1Kflyerguy · Jul 4, 2016

I do a somewhat similar analysis of my individual stays. We own with HGVC which is points based, and we rarely book exactly one week.

Every time time i book a trip, i also go to Hilton.com and try to book the same room and dates for cash. I record everything in a spreadsheet, and at the end of the year i can compare the MF + reservation fees to hilton.com cash rates.

I can agree this is not a perfect system. Before i bought a timeshare i would have been booking via a hotel website. But now that i discovered TS, we do rent from other owners sometimes as well.

skotrla · Jul 26, 2016

Memorial Day Weekend 2017 HICV Comparison

Since this thread was moved, not sure if anyone will see this, but here's the Memorial Day analysis I was planning on doing for 2 HICV resorts.

Scope: May 25-May 30 (Memorial Day weekend with one day on either end) - comparable stay should be 5 nights min and include Fri-Mon 3-day weekend, cancellation policy should be comparable to $100 fee for canceling a few days before arrival

Properties: HICV Galveston 1BR-K, HICV Las Vegas 1BR-K

7/26
-----
Galveston Hotels.com: $1731
Galveston HICV: $613 (94.4K, 65% less, $5.5/1K, Pointshield)

Las Vegas Hotels.com: $1058
Las Vegas HICV: $547 (82.4K, 48% less)

I'll check availability each month and update.

If anyone finds a rental from another source during this timeframe at one of these resorts, please post.

-Scott
Owner, HICV Google+ Group

ronparise · Jul 26, 2016

skotrla said:
Since this thread was moved, not sure if anyone will see this, but here's the Memorial Day analysis I was planning on doing for 2 HICV resorts.

Scope: May 25-May 30 (Memorial Day weekend with one day on either end) - comparable stay should be 5 nights min and include Fri-Mon 3-day weekend, cancellation policy should be comparable to $100 fee for canceling a few days before arrival

Properties: HICV Galveston 1BR-K, HICV Las Vegas 1BR-K

7/26
-----
Galveston Hotels.com: $1731
Galveston HICV: $613 (94.4K, 65% less, $5.5/1K, Pointshield)

Las Vegas Hotels.com: $1058
Las Vegas HICV: $547 (82.4K, 48% less)

I'll check availability each month and update.

If anyone finds a rental from another source during this timeframe at one of these resorts, please post.

-Scott
Owner, HICV Google+ Group

So whats the point?

sometimes it makes sense to own a timeshare.

Yes we know that

My favorite example is the 4 day Mardi Gras weekend. Hotels charge $300+ per night, My Wyndham La Belle Maison studio (sleeps 4) costs me 44,500 points (less than $250) so $1200 vs $250

VegasBella · Jul 26, 2016

My experience is that for absolute best value it requires significant knowledge of resort systems and how to work them. Factor in the constant change and it's a significant amount of time and energy spent tracking down and getting the best value.

My time and energy is valuable to me so I choose a balance wherein I get good value but maybe not always the absolute best value.

Example: I want to be on the beach in So Cal every Summer for at least a few weeks. If you watch the Rentals Offered forum (plus look at Redweek etc) there are always a few Summer So Cal weeks available that will work for me and they're often priced at or below MF. If I wanted the best value and the least financial risk I would simply rent every time. Instead I rent some of the time.

But I want more consistency than that. I also absolutely adore my CBI ownership. It's a great value but it's also more than that. For example, when we arrive there's a sense of calmness we have that simply doesn't exist during other vacations. It's not just the place though, it's the fact that we're owners and we know we're coming back year after year. Other vacations can be fun or relaxing etc but the fixed week, fixed unit nature of our CBI ownership makes us very very relaxed.

John Cummings · Jul 27, 2016

Everybody is comparing TS with hotels. I thought it was about renting a TS vs buying one. Like I said we rented a 2 BR at Wyndham Beachwalk at Waikiki in April for $700.00 /week. I found it by simply doing a search for TS rentals in Waikiki.

Robert D · Jul 28, 2016

skotrla said:
Since this thread was moved, not sure if anyone will see this, but here's the Memorial Day analysis I was planning on doing for 2 HICV resorts.

Scope: May 25-May 30 (Memorial Day weekend with one day on either end) - comparable stay should be 5 nights min and include Fri-Mon 3-day weekend, cancellation policy should be comparable to $100 fee for canceling a few days before arrival

Properties: HICV Galveston 1BR-K, HICV Las Vegas 1BR-K

7/26
-----
Galveston Hotels.com: $1731
Galveston HICV: $613 (94.4K, 65% less, $5.5/1K, Pointshield)

Las Vegas Hotels.com: $1058
Las Vegas HICV: $547 (82.4K, 48% less)

I'll check availability each month and update.

If anyone finds a rental from another source during this timeframe at one of these resorts, please post.

-Scott
Owner, HICV Google+ Group

I'd also look on Airbnb, Craig's List, Redweek, and Myresortnetwork for the timeshare rental. You might be able to rent a full week for less than the 5 nights.

ronparise · Jul 28, 2016

John Cummings said:
Everybody is comparing TS with hotels. I thought it was about renting a TS vs buying one. Like I said we rented a 2 BR at Wyndham Beachwalk at Waikiki in April for $700.00 /week. I found it by simply doing a search for TS rentals in Waikiki.

I think the comparison is buying a timeshare and paying maintenance fees, compared with renting comparable vacation accommodations.

Those comparable accommodations might be a hotel or someones home/condo advertised on VRBO or a timeshare advertised on TUG or craigslist or airbnb

Its just that its easy to find hotel rates.

I prefer to make my buying decisions comparing timeshares to owning a second home

x3 skier · Jul 28, 2016

ronparise said:
I prefer to make my buying decisions comparing timeshares to owning a second home

That's what I did when I bought my timeshares in Steamboat Springs. Two six weeks shares in ski season at under $25k in total vs a full condo at a minimum of $150k made it a no brainer for me. Not to mention the savings in condo fees and taxes.

OTOH, I'm building a couple of airplanes that will cost a ton more than renting one when I want to fly. But, I want the airplanes just like you want a boat

Cheers

presley · Jul 28, 2016

VegasBella said:
For example, when we arrive there's a sense of calmness we have that simply doesn't exist during other vacations. It's not just the place though, it's the fact that we're owners and we know we're coming back year after year. Other vacations can be fun or relaxing etc but the fixed week, fixed unit nature of our CBI ownership makes us very very relaxed.

I have that same experience with Seapointe. Whenever I go there, I know I'll be able to go there again and I don't feel any pressure to do everything each time. It's truly a vacation home for me. Even if the only thing I do is hang around on the balcony looking at the ocean, I am happy. There are always activities that sound fun, but I usually don't do them because I know that as an owner, I will be back.

John Cummings · Jul 28, 2016

ronparise said:
I think the comparison is buying a timeshare and paying maintenance fees, compared with renting comparable vacation accommodations.

Those comparable accommodations might be a hotel or someones home/condo advertised on VRBO or a timeshare advertised on TUG or craigslist or airbnb

Its just that its easy to find hotel rates.

I prefer to make my buying decisions comparing timeshares to owning a second home

Personally, I don't make comparisons. Sometimes we would much rather stay in a luxury hotel and other times not. Cost has nothing to do with it.

uscav8r · Jul 28, 2016

John Cummings said:
Personally, I don't make comparisons. Sometimes we would much rather stay in a luxury hotel and other times not. Cost has nothing to do with it.

Well, cost does have something to do with it. If it did not, there would be nothing stopping you from going luxury 100% of the time.

John Cummings · Jul 28, 2016

uscav8r said:
Well, cost does have something to do with it. If it did not, there would be nothing stopping you from going luxury 100% of the time.

Not true. There are locations where timeshares are better like the Grand Mayans in Mexico. There are TS locations where there are no luxury hotels. On the other hand the reverse is also true. We are location oriented. We pick our location to visit and then decide what type of accommodations we want. For example we do not like condo living which many TS are. We never cook on vacation so a kitchen is not something we need as long as we have a refrigerator for snacks.

Lisa P · Jul 29, 2016

John Cummings said:
Everybody is comparing TS with hotels. I thought it was about renting a TS vs buying one. Like I said we rented a 2 BR at Wyndham Beachwalk at Waikiki in April for $700.00 /week. I found it by simply doing a search for TS rentals in Waikiki.

Just curious... did you decide to travel or alter your vacation plan (dates, destination, unit size) because you found this? Or did you actually have a specific plan to vacation in Waikiki on those dates with a need for 2BR occupancy and you were simply able to fulfill your lodging need with this great rental? Was it a last minute rental?

IMO, a general rent vs. own comparison only makes sense when looking at typical availability of the desired accommodations for season, destination, unit size. Like many people, our schedules do not allow much flexibility in to work around the occasional awesome deal that presents itself, and certainly not for last minute travel. We are interested in reasonably reliable sources of vacation accommodations when and where we want to travel. Everyone's not the same, of course.

uscav8r · Jul 29, 2016

John Cummings said:
Not true. There are locations where timeshares are better like the Grand Mayans in Mexico. There are TS locations where there are no luxury hotels. On the other hand the reverse is also true. We are location oriented. We pick our location to visit and then decide what type of accommodations we want. For example we do not like condo living which many TS are. We never cook on vacation so a kitchen is not something we need as long as we have a refrigerator for snacks.

Well whatever you do do, it is "luxury" compared to camping!

John Cummings · Jul 29, 2016

uscav8r said:
Well whatever you do do, it is "luxury" compared to camping!

We can certainly agree on that. Our idea of camping is to stay at the Hilton

VegasBella · Jul 29, 2016

John Cummings said:
Everybody is comparing TS with hotels. I thought it was about renting a TS vs buying one.

Actually, my post right above your statement was comparing timeshare rental vs owning.
Also, hotels.com rents out timeshares, not just hotels. I'm pretty sure the OP is comparing the same resorts.

ronparise said:
I think the comparison is buying a timeshare and paying maintenance fees, compared with renting comparable vacation accommodations.

Yes.

John Cummings said:
We are location oriented. We pick our location to visit and then decide what type of accommodations we want.

I think most people travel this way. That's why hotels.com and RCI and II search usually begins with location. For most of my own travels I choose location first and then figure out the rest.

That said, unlike you I strongly prefer to have a kitchen while traveling so I often rule out plain hotel rooms and only look at timeshares, extended stay style hotels, and rental homes.

Personally, I think the biggest downside of timeshares is that they are not available everywhere. Some of my favorite places don't have any timeshares.

x3 skier · Jul 29, 2016

John Cummings said:
We can certainly agree on that. Our idea of camping is to stay at the Hilton

My wife's idea of "roughing it" was the ice machine is on a different floor.

Cheers

skotrla · Aug 8, 2016

Lisa P said:
Just curious... did you decide to travel or alter your vacation plan (dates, destination, unit size) because you found this? Or did you actually have a specific plan to vacation in Waikiki on those dates with a need for 2BR occupancy and you were simply able to fulfill your lodging need with this great rental? Was it a last minute rental?

IMO, a general rent vs. own comparison only makes sense when looking at typical availability of the desired accommodations for season, destination, unit size. Like many people, our schedules do not allow much flexibility in to work around the occasional awesome deal that presents itself, and certainly not for last minute travel. We are interested in reasonably reliable sources of vacation accommodations when and where we want to travel. Everyone's not the same, of course.

Amen! My general argument is that rental weeks on timeshare rental boards are not an efficient market., so the price listed is not a good measure of actual cost/value. We too pick a place/date and book something within a few days - if the stay we are looking for is not available, we use an alternate booking method with greater availability (e.g. hotels.com, Orbitz, etc.).

-Scott
Owner, HICV Google+ Group

skotrla · Aug 27, 2016

August update

Scope: May 25-May 30 (Memorial Day weekend with one day on either end) - comparable stay should be 5 nights min and include Fri-Mon 3-day weekend, cancellation policy should be comparable to $100 fee for canceling a few days before arrival

Properties: HICV Galveston 1BR-K, HICV Las Vegas 1BR Deluxe

8/27
-----
Galveston Hotels.com: $1611
Galveston HICV: $613 (94.4K, 62% less, $5.5/1K, Pointshield)

Las Vegas Hotels.com: $1091
Las Vegas HICV: $547 (82.4K, 50% less)

7/26
-----
Galveston Hotels.com: $1731
Galveston HICV: $613 (94.4K, 65% less, $5.5/1K, Pointshield)

Las Vegas Hotels.com: $1058
Las Vegas HICV: $547 (82.4K, 48% less)

Rent vs. own comparison for a few timeshares I follow

ronparise

skotrla

ronparise

Robert D

TUG Review Crew

John Cummings

1Kflyerguy

TUG Review Crew: Veteran

skotrla

ronparise

VegasBella

John Cummings

Robert D

TUG Review Crew

ronparise

x3 skier

TUG Review Crew: Veteran

presley

TUG Review Crew: Expert

John Cummings

uscav8r

TUG Review Crew: Expert

John Cummings

Lisa P

TUG Review Crew: Rookie

uscav8r

TUG Review Crew: Expert

John Cummings

VegasBella

x3 skier

TUG Review Crew: Veteran

skotrla

skotrla