# When, oh when, will the market bottom out?



## dmaxdmax (Sep 3, 2011)

I'm sure many have noticed the MOW Platinum Oceanside week on eBay for $12.5 ( or $13.75 buy it now).  Just a year ago Michelle D told me a similar week was around $20m and a year before that it was at least $5m more.

When do think we'll run out of gravity?


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## bogey21 (Sep 3, 2011)

I don't know when we will hit bottom, but I do know it has a ways to go.

George


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## timeos2 (Sep 3, 2011)

All timeshares are worth at most 5k or less. Most far less.  The real cost will always be the annual fees and resorts with high fees will have resale price pushed down by that despite high quality or location.

Lesser resorts will have lower value on resale too but offer lower fees. Resale value above 5k will be history for most resorts very soon if not already. Then it will be near bottom. At 2k it may be bottom for the very best.


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## jimf41 (Sep 3, 2011)

timeos2 said:


> All timeshares are worth at most 5k or less. Most far less.  The real cost will always be the annual fees and resorts with high fees will have resale price pushed down by that despite high quality or location.
> 
> Lesser resorts will have lower value on resale too but offer lower fees. Resale value above 5k will be history for most resorts very soon if not already. Then it will be near bottom. At 2k it may be bottom for the very best.



John,
Please let me know when Frenchmans Cove Platinum weeks are selling for 2k. I'll take 10 and give you a hefty finders fee for each one.


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## ronparise (Sep 3, 2011)

jimf41 said:


> John,
> Please let me know when Frenchmans Cove Platinum weeks are selling for 2k. I'll take 10 and give you a hefty finders fee for each one.



I started to post something earlier today when I first saw this post, but didnt want to upset the Marriott loyalists.  At first I didnt understand the OP, when he talked about something selling for $12.50 and wondered where the bottom might be....$12.50 it seemed to me had to be close. When I realized we were talking about $12500....to answer the op....that's not even close. There are other Platinum Atlantic Beach front Marriotts selling right now for half that; which ought to give us a clue

There will always be exceptions, but overall I'd agree with John. 

And what is the finders fee you pay?...Im guessing you will be buying within 5 years.....


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## GregT (Sep 3, 2011)

All,

This is an interesting thread, and we've seen similar threads before.   I do expect continued downward pressure on prices, but believe that select properties will continue to sell above the modest thresholds Timeos2 has suggested.   But his points merit consideration.

I think Marriott's _future _pricing is consistent with Starwood's _current _pricing, but that realization hasn't sunk in yet to Marriott purchasers.

Starwood has two major features that depress resale pricing (and Starwood owners, please comment).

Fact #1 that depresses value:  Their internal trading system is restricted to a small number of properties purchased resale (called the Mandatory properties) -- and to properties purchased directly from them (the Voluntary properties purchased direct). 

Fact #2 that depresses value: Although there is a Starwood preference in II, Starwood controls the inventory that is deposited, accordingly prime weeks are usually not consistently available via II

Further complicating point #1, three of the five Mandatory properties that DO participate in the internal system have MFs that are so high that it is not practical to buy them as traders in the internal system.  

Accordingly, Starwood pricing has plummeted for most of their resorts because the II trading population is manipulated and the internal system is off limits.  *Isn't this where Marriott is taking us?*

The "best" Starwood trader (Sheraton Desert Oasis, locking off into 2 1BRs, has MFs of approx $900) sells for less than $1,000.   A property with specific features (Hawaii Ocean Front/Ocean View, Colorado ski season) continues to have values that exceed Timeos2's threshold, but they are the exception.   Not even high MFs have killed Westin St. John's resale value in Platinum season, but they are not much better than Timeos2's $5K thresholds.   

The "best" Mandatory Starwood trader (Westin Kierlands 2BR) sells for $13K - $15K annually, which suggests there is significant value to the internal system that doesn't transfer to the pure II trader (which has lower MF).

I believe Marriott has duplicated both of these resale-value-punishing features.  Resale Marriotts post June 20, 2010 are not eligible for the internal system (which whether or not we have issues with components of the structure, it is valuable to simply be a participant in the system). 

Additionally, I believe (my speculation) that it will be harder and harder to trade for a prime Marriott week in II -- at least with any kind of advance planning.   I'm still waiting on a like-for-like trade into MOC, with a home resort trading preference, and three/four months have passed.    I believe that prime weeks go first through the DClub inventory, restricting the reliability of Marriott II trades.

Accordingly, I believe Timeos2 is correct that Marriotts will drop to whatever is the true value of the week itself (which can't be propped up by either its access to an internal system or propped up by predictable exchanges).   Whatever a week in Williamsburg/Ft. Lauder/Tahoe/St. Thomas is worth to the buyer will stand on its own, ie, the value of the access to that specific week.

I believe Beachproperties that have premium views will hold their value best (in my opinion) and I still believe that the Platinum weeks with Premium views will have value.  But any premium associated with a system, or trade value, is under pressure from the developers.

These are my opinions only, of course, and I still love Marriott timeshares.  I may buy more one day, but at the moment, I'm buying other systems because (absent MOC), I prefer to own a system versus a specific property.   HGVC's system appears highly stable, and Starwood's system actually just became more owner-friendly recently -- a surprising move in today's timeshare world.   If the only difference in these systems in the future is that we pay for the features (but they aren't taken away), that's a change I am expecting.  

Best to all,

Greg


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## dougp26364 (Sep 3, 2011)

Considering that we see some people pay upwards of $4,000 to get rid of their weeks, I'd say we have a long ways to go before we hit bottom. Some timeshares actually have negative value when it comes to getting rid of them. 

If the economy doesn't turn around, only those resort groups in strong financial standing will remain. The rest are at risk of fading into our memory. I own two such resorts that I consider at risk of failing in the next few years.


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## ada903 (Sep 3, 2011)

I believe too there are are a good amount of few properties that preserve high resale value - Marriott plat ski weeks, Marriott summer coast weeks, Marriott Aruba plat season, or Marriott Hawaii two bedroom lockoffs platinum ocean and oceanfront views.  With Starwood, weeks like WKV preserve high value for internal trading power within the SVN network, and weeks like Harborside plat and gold plus are great buys to use or rent.  

Everything else is pretty much valued based in its ability to trade well with II using a preference like Marriott or SVN - my gold Marriott Palm Springs weeks got me some awesome trades, and I love my SDO trades.  Or simply the week is valued by the owner for personal use purposes.

I followed a few resorts that are high priced in this market, very closely, and have seen prices being stable over the last year.


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## hipslo (Sep 3, 2011)

I just rented the last of my March 2012 Mountainside ski weeks last week, all for at least $1500 over mfs, and am now beginning to turn away inquiries from very motivated renters. Some time ago on this forum I offered a $1000 finder's fee to anyone who could locate a platinum Mountainside week for under $10,000.  So far I havent heard anything from anyone.


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## yumdrey (Sep 3, 2011)

Starwood ski weeks are plummeting, so Marriott ski weeks will follow its way (I guess).
Good for you that you could make more than 1.5k above MF, hope skiers keep skiing for that price in future years.

A few weeks ago, a tugger offered a ski week at Marriott resort for free in bargain basement.


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## hipslo (Sep 3, 2011)

yumdrey said:


> A few weeks ago, a tugger offered a ski week at Marriott resort for free in bargain basement.



I bet it was the Vail property - where mfs can equal or exceed rental value.


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## timeos2 (Sep 3, 2011)

hipslo said:


> I bet it was the Vail property - where mfs can equal or exceed rental value.



Exactly - and virtually every property is heading in the same direction over the next few years. One reason why the $5K maximum may not be far off. The fees are needed to maintain the quality (and the Marriott heavy cut) but eventually kill resale value as all the money is needed for the ongoing fees alone.


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## hipslo (Sep 3, 2011)

timeos2 said:


> Exactly - and virtually every property is heading in the same direction over the next few years. One reason why the $5K maximum may not be far off. The fees are needed to maintain the quality (and the Marriott heavy cut) but eventually kill resale value as all the money is needed for the ongoing fees alone.



The Vail properties were not purpose built as Marriott timeshares and as a result have had issues (and much lower value) than the other Marriott ski properties for years (decades, actually). The mf increases at MS have been modest over the period of my ownership, they just completed a major renovation cycle last year, and the reserves are well funded. 

Time will tell.  But at the moment, at current pricing, the MS ski weeks continue to generate close to a 10% return. Over the longer term, I expect rental rates at the best properties to begin to increase again, which should offfset any increase in mfs.


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## dmaxdmax (Sep 4, 2011)

Sorry if I confused anyone by leaving the "m" off $12.5

If I really want MOW rather than HHI it seems to me I'll have to pay a certain premium for my lack of flexibility.  I see lots of Platinum oceanfront weeks for rent on redweek for >$2,000.  If people are actually getting $1,000 over fees  a week will be worth more than $5,000.

However, I'm wrong a lot.


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## Lardan (Sep 4, 2011)

I think prices will drop more once MFs are announced. A years worth of MFs are a big bite to many at this point, even worse if the TS is on a loan.


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## dougp26364 (Sep 4, 2011)

timeos2 said:


> Exactly - and virtually every property is heading in the same direction over the next few years. One reason why the $5K maximum may not be far off. The fees are needed to maintain the quality (and the Marriott heavy cut) but eventually kill resale value as all the money is needed for the ongoing fees alone.



There's a maximum to the MF's? Somehow I had missed that part. Maybe I has passed out when they said it or if/when I read it. But I agree, at the rate Grand Chateau and Ocean Pointe are going, we'll hit $5K sooner rather than later. While I've been pleased with our resorts, I've been less than pleased with how the MF's have accelerated over the years. It appears to me that some Marriott resorts are better managed by their HOA's than others. Unfortunately I seem to own two that are having difficulty keeping a cap on expendatures.


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## FlyerBobcat (Sep 4, 2011)

dmaxdmax said:


> Sorry if I confused anyone by leaving the "m" off $12.5



What's the "m"  ????????


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## SueDonJ (Sep 4, 2011)

dougp26364 said:


> There's a maximum to the MF's? Somehow I had missed that part. Maybe I has passed out when they said it or if/when I read it. ...



I think the max $5K John mentioned refers back to his statement about value, not MF: "all timeshares are worth at most 5k or less."


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## dmaxdmax (Sep 4, 2011)

FlyerBobcat said:


> What's the "m"  ????????



There I go again; decades ago before computer terms entered the common tongue I was in the habit of using m for thousand and mm for million.  Sometimes I've seen m for thousand and M for million but that was confusing even then.  I think it's from Latin mille as in millennium.  Obviously I still use it.


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## chickenfoot (Sep 4, 2011)

FlyerBobcat said:


> What's the "m"  ????????



Its the roman numeral system using Latin alphabet to signify numbers.  Older movies use to use it in the trailer to indicate year produced

M= 1,000
C=  100


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## ronparise (Sep 4, 2011)

dmaxdmax said:


> There I go again; decades ago before computer terms entered the common tongue I was in the habit of using m for thousand and mm for million.  Sometimes I've seen m for thousand and M for million but that was confusing even then.  I think it's from Latin mille as in millennium.  Obviously I still use it.



Are we dating our selves...I use, and expect to see k (as in kilo or m (the roman numeral for a thousand) for a thousand and  mm (a thousand thousands) for a million

But I wasnt confused by your post...the context told me all I needed to know

My best guess (and the point I was trying to make in my post)  is that I think the bottom, when it comes, will be a lot closer to $12.50 than the current asking price of $12,500  for the week referenced in your post

And I think it all has to do with the relationship between mf and rental prices. If mf is $1000 and I can use the same thing for $1000 by paying rent, than the value of ownership is zero. If however, mf is $1500 but it costs $2000 to rent the same thing, you can simply calculate the right price to pay...

to use an overly simplistic example, (ignoring interest rates, and inflation.and intrinsic value and the Marriott name).... I would want a 10 year payback...so to save $500 a year Id be willing to pay $5000 for the week. If, as has been argued here, you can rent a Marriott for twice mf (a $1500 spread ??) then I would be willing to pay $15000 for that week.

Because I am afraid that rents are going down and mf is going up and that sometime soon they will be equal;  I am not willing to pay anything for a Marriott (or any other timeshare)...

There are exceptions of course...and it is those exceptions that Im looking for.


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## FlyerBobcat (Sep 4, 2011)

dmaxdmax said:


> There I go again; decades ago before computer terms entered the common tongue I was in the habit of using m for thousand and mm for million.  Sometimes I've seen m for thousand and M for million but that was confusing even then.  I think it's from Latin mille as in millennium.  Obviously I still use it.



Thanks....  I'm used to seeing "k" but was pretty sure I was able to figure out the meaning..  Thanks for the clarification thought, as maybe a novice would not have guessed correctly...   Thanks


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## OldPantry (Sep 4, 2011)

ronparise said:


> Are we dating our selves...I use, and expect to see k (as in kilo or m (the roman numeral for a thousand) for a thousand and  mm (a thousand thousands) for a million
> 
> But I wasnt confused by your post...the context told me all I needed to know
> 
> ...


I'm on board with this entire line of analysis. A timeshare "investment" makes sense only if rental income exceeds those maintenance fees.  I would quibble a bit, though, with your goal of a ten-year payback.  I don't think that's good enough.  That's just getting your capital back.  What about the opportunity cost?  If you invested that $5000 in a traditional way, you'd expect to have the money back in ten years, PLUS an investment return that (at least) exceeds inflation and taxes.
     I just passed on a platinum EOY Timber Lodge ski week for this very reason.  The $5500 investment seemed modest compared to the $2000+ that could be realized renting the unit.  Then I added in peripheral costs ($750 to buy, lockoff costs, Redweek listings, taxes).  Still OK, till I considered that the $6250 would generate over $300/year if invested in a reasonably conservative long-term instrument (like a bond).  Add all that together, and the $2000 rental pretty much disappears in the expenses.  So, not worth the risk and hassle.
     I think Timeos is pretty much spot on: $5000 will be the upper limit for all but the most glittering prospects, those that can demand truly premium rentals.  Everything else will drop to the point that a cold-blooded INVESTOR will think it worth his/her while.  For example, in the case I described above, I would probably leap if the price dropped to $2000-2500.  Then I could use the property when I wanted, and make money the rest of the time.


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## MOXJO7282 (Sep 4, 2011)

ronparise said:


> There are exceptions of course...and it is those exceptions that Im looking for.


MOW platinum OS or OF is one of those exceptions. Maybe not at the price currently on the ebay auction but MOW plat it one where there will be enough interest to keep it above $7500 - $10,000. And OF even more. Heck a gold OF will start over $7500 perhaps even stay over $10k. I know I'm a buyer at that price because that unit will rent at $12-$1500 above MF so that would fit into my model very nicely.

Also keep in mind Ebay is but a small slice of the resales that occur and it is the lowest price point that is for sure.

Below is a list of the 50 or so Marriotts. Most I agree if they haven't already will fall into the $1- $5k range, but some will always be the exception. I believe most of the  properties that I own will always fit into that category, Maui, Aruba Plat, MOW plat., Newport plat, GO Gold OF

I'm sure there are others, like the ones Hipslo owns and tracks. I'd like anyone else to contribute a thought towards this.

What other Marriots from the list will alwasy be in high demand, and therefore always stay above the $7500 figure?

1	Marriott's Newport Coast® Villas
2	Marriott's Kauai Beach Club
3	Marriott's Maui Ocean Club
4	Marriott's Monarch
5	Marriott's OceanWatch Villas
6	Marriott's Aruba Surf Club
7	Marriott's Canyon Villas
8	Marriott's Desert Springs Villas
9	Marriott's Desert Springs Villas
10	Marriott's Shadow Ridge
11	Marriott's Timber Lodge
12	Marriott's Mountain Valley Lodge
13	Marriott's Streamside
14	Marriott's BeachPlace Towers
15	Marriott's Crystal Shores
16	Marriott's Villas at Doral
17	Marriott's Cypress Harbour
18	Marriott's Grande Vista
19	Marriott's Harbour Lake
20	Marriott's Imperial Palms Villas
21	Marriott's Lakeshore Reserve
22	Marriott's Royal Palms
23	Marriott's Sabal Palms
24	Marriott's Legends Edge
25	Marriott's Oceana Palms
26	Marriott's Ocean Pointe
27	Marriott's Kauai Lagoons - Kalanipu'u
28	Marriott's Waiohai Beach Club
29	Marriott's Maui Ocean Club
30	Marriott's Ko Olina Beach Club
31	Marriott's Custom House
32	Marriott's Willow Ridge Lodge
33	Marriott's Grand Chateau
34	Marriott's Fairway Villas
35	Marriott's Barony Beach Club
36	Marriott's Grande Ocean
37	Marriott's Harbour Club
38	Marriott's Harbour Point
39	Marriott's Heritage Club
40	Marriott's Sunset Pointe
41	Marriott's SurfWatch
42	Marriott's MountainSide
43	Marriott's Summit Watch
44	Marriott's Manor Club
45	Marriott's Aruba Ocean Club
46	Marriott's St. Kitts Beach Club
47	Marriott's Frenchman's Cove
48	Marriott's Village d'Ile-de-France
49	Marriott's Playa Andaluza
50	Marriott's Club Son Antem
51	Marriott's Marbella Beach Resort
52	Marriott's Phuket Beach Club


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## MOXJO7282 (Sep 4, 2011)

OldPantry said:


> For example, in the case I described above, I would probably leap if the price dropped to $2000-2500.  Then I could use the property when I wanted, and make money the rest of the time.




I can guarantee you will never see a MOW plat OS or better at $2,000. Anyone who thinks that just doesn't know MOW and the high demand there is for it.


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## ronparise (Sep 4, 2011)

OldPantry said:


> I'm on board with this entire line of analysis. A timeshare "investment" makes sense only if rental income exceeds those maintenance fees.  I would quibble a bit, though, with your goal of a ten-year payback.  ......................................... a cold-blooded INVESTOR



The ten years was pulled out of the air. And I dont think a cold blooded investor
will give timeshares a second look. 

I was looking to justify a  timeshare purchase at any price . To do that you have to "play" with the numbers. These are not "pure" investments...we use this stuff, and its hard to put a value on that. 

Thats why MOXJO7282 has it right...what gives timeshares value and sets the price is what others are willing to pay...most of us aren't that cold blooded when it comes to providing a vacation for our family and ourselves


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## m61376 (Sep 5, 2011)

As Ron above alluded to, the personal factor I think ultimately has as much, or perhaps a greater impact, on sustaining timeshare prices than objective spreadsheet calculations. While such calculations are very important to the few who routinely rent their units, I think mot owners have purchased just to enjoy quality time with those they care most about.

We here on Tug tend to overanalyze things, but I think most buyers compare the purchase price to what it would otherwise cost them to rent, frequently using rental rates on Marirott.com as a barometer of cost, and feel as long as they break even within 5-10 years they've done well. While they may consider MF's, I don't think most people worry about increasing MF's when deciding value.

That's why I agree with Joe when he states that there are some properties that will always retain value, just because they will always have a dedicated audience that loves to return to the destination and they are destinations where demand exceeds supply.

I am not so sure that the price downfall is due to a decimation of the timeshare model; rather, I think it is more a reflection of tough economic times, and people are hesitant to "invest" in purely discretionary items. While people are beginning to travel again, there are many still suffering from the recession, and even those who were fortunate not to have been directly impacted are very cognizant of the fragile economy and are nervous spending large sums of money that they don't need to part with. I do think that the downward spiral will naturally reverse itself when the economy rebounds, and there is increased consumer confidence. 

So, while I may be wrong, I'm of the mindset that ultimately prices will again creep up, at least for prime properties during time periods that people like to travel. I think the ones in jeopardy are those properties where the average consumer can easily rent for at or less than the MF's (such as off season weeks that can easily be rented on Marriott.com or through one of the travel search engines for amounts that approach the MF's).


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## OldPantry (Sep 5, 2011)

ronparise said:


> The ten years was pulled out of the air. And I dont think a cold blooded investor
> will give timeshares a second look.
> 
> I was looking to justify a  timeshare purchase at any price . To do that you have to "play" with the numbers. These are not "pure" investments...we use this stuff, and its hard to put a value on that.
> ...



Sure.  Most timeshare folks aren't that cold-blooded.  The huge majority bought in a flush of enthusiasm after a carefully orchestrated hard sell (guilty, guilty).   BUT, buyer's remorse is in full swing, and the result is plummeting resale prices.  So, what will stop the plunge?  A true INVESTMENT opportunity.  If purchase prices get low enough, then folks interested in making money will step in when they can swing a nice return on investment.  That means making enough on the spread between maintenance fees and rental income to justify the investment.  When that opportunity arises, you'll see cold-blooded buyers, and plenty of them.


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## OldPantry (Sep 5, 2011)

MOXJO7282 said:


> I can guarantee you will never see a MOW plat OS or better at $2,000. Anyone who thinks that just doesn't know MOW and the high demand there is for it.


Hmm.  You guarantee it?  Well, what if those lovely low maintenance fees (about $1000/year?) went to $2000?  Or $3000?  Out of the question?  Well, my Ko Olina fees have nearly doubled since I bought, so another doubling doesn't look all that far-fetched to me.  Even if you are unaffected by such things, there will be other owners who are.  A straw in the wind are the Kauai Beach Club 1BRs, whose prices have been in freefall.  Why?  Their maintenance fees are out of line.  I'm sure many of those owners would have "guaranteed" that their units would never fall below ... name a figure.


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## dioxide45 (Sep 5, 2011)

OldPantry said:


> Hmm.  You guarantee it?



I would agree. Many people said similar things about the housing market five years ago. We see where that landed them.


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## bogey21 (Sep 5, 2011)

OldPantry said:


> So, what will stop the plunge?  A true INVESTMENT opportunity.......*That means making enough on the spread between maintenance fees and rental income *to justify the investment.  When that opportunity arises, you'll see cold-blooded buyers, and plenty of them.



You assume that will happen.  IMO it is more "if" than "when".

George


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## Lardan (Sep 5, 2011)

I too definitely think the problem with timeshares today is the economy itself. I think there are many people that would purchase a timeshare if they had the discretionary income to do so, but they are concerned about continuing with the needs instead of the wants.

If I would be purchasing timeshares to attempt to make a profit by renting I would analize it so much I would not make the purchase.  Is the reward worth the effort and risk in our present economy?  The way the economy is right now would I put out five thousand or more with the hope of getting my investment back in a few years?  I don't think so, too much uncertainity for me.  There is money to be made I'm sure, but only for those who really understand the market, I mean really understand it.

I agree there will come a time where some people will buy up many of these for rock bottom prices doing quite well with renting and reselling for profit. I wonder though for everyone in the black doing this, how many will be in the red.

More power to those in the timeshare market to make a profit, but it is not for me.  I have enough stress and "things" to deal with.  When I go to these next year it will be to have a great vacation, and the nice part is I know we will.

I know I have rambled here a bit, but it does have a purpose.  I do hope some "rookie" does not read these posts about people making this easy money renting the units and think they can too. Personally, I think it is tough to do this.  Actually I think it will get even tougher before easier in the present economy.  Great time to purchase for the joy of ownership and having great vacations, but for me it ends there.

This is coming from a guy who is not anti-risk. I have several real estate investments, am in the stock market, and precious metals as well.  I think one purchasing a timeshare for profit needs to look at these things:

-Liquidity of your purchase.

-Uncertainity of MFs.  I guess it is not uncertainity if they will increase, but how much of an increase.

-The economy.  I certainly don't profess to have a crystal ball, but I think it will take years for our economy to recover.  Also it will get worse before it gets better, but it will get better.


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## MOXJO7282 (Sep 5, 2011)

dioxide45 said:


> I would agree. Many people said similar things about the housing market five years ago. We see where that landed them.



Yes but I think you would agree that some housing areas have already recovered quite a bit of their value. I know I live in an area that was less affected and has rebounded nicely.

You cannot compare 1 BDRM unit pricing to 2 BDRM pricing on high demand locations like MOW.

Sure MFs can go to $3k and the sky can fall tomorrow too.


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## MOXJO7282 (Sep 5, 2011)

Lardan said:


> I too definitely think the problem with timeshares today is the economy itself. I think there are many people that would purchase a timeshare if they had the discretionary income to do so, but they are concerned about continuing with the needs instead of the wants.
> 
> If I would be purchasing timeshares to attempt to make a profit by renting I would analize it so much I would not make the purchase.  Is the reward worth the effort and risk in our present economy?  The way the economy is right now would I put out five thousand or more with the hope of getting my investment back in a few years?  I don't think so, too much uncertainity for me.  There is money to be made I'm sure, but only for those who really understand the market, I mean really understand it.
> 
> ...



I agree with most of these comments with the exception of the very last sentence about it getting worse before better, I'm a glass "half full" guy so we may stay down for awhile more but I don't think it will get worse.

My point has been all along that there are exceptions and I believe MOW plat with view is one of them. I mention view because in my extensive experience view adds alot of value. As does 2BDRM vs. 1BDRM units, so I'm not talking about an off-season 1 BDRM gardenview. Those I agree will probably continue to see downward pricing pressure. 

Now if you're going to give me a "sky is falling" scenario I don't have a response for that because I don't live my life in fear of the worst case. Not to say I'm risky, I've taken calculated risks and they've paid off.

I remember when we first got into Marriott TSs and we was trying to convince my BIL to partner with me. It would have been perfect because he's my wife's lovely twin sister's husband and they have same aged kids who are as close as siblings. The reason he wouldn't get involved was because he was convinced a hurricane would hit one of the properties and he would be out his money. Now he knows he made a mistake because he sees what we've accomplished first hand because his family is welcome to come with us on every trip. 

Just last week he was freaked out that we were driving into the hurricane even though I told him I was going below the path and was going to be there a full day before the hurricane arrived. He said I was risking my families safety. I just don't think that way.


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## OldPantry (Sep 5, 2011)

bogey21 said:


> You assume that will happen.  IMO it is more "if" than "when".
> 
> George


Well, actually, I wasn't trying to say that it will happen for sure.  I said that it would happen, if a meaningful spread between MFs and rental occurs.  THEN it's a when.  Why?  Because the world is chock full of investors desperately seeking a decent inflation/tax adjusted return.  Ultimately, timeshares could be a decent alternative to rental real estate.  That would provide a bottom (yeah, a LOW bottom) to pricing.  And, if somebody makes real money at the game, then the next guy might pay more.  Woohoo, rising prices!


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## jont (Sep 5, 2011)

MOXJO7282 said:


> My point has been all along that there are exceptions and I believe MOW plat with view is one of them. I mention view because in my extensive experience view adds alot of value. As does 2BDRM vs. 1BDRM units, so I'm not talking about an off-season 1 BDRM gardenview. Those I agree will probably continue to see downward pricing pressure.
> 
> 
> .



Joe
I don't mean to get off topic, but im curious as to how much rental value an oceanfront or oceanside unit has over an oceanview at MOW? I have a plat. OV unit which I am considering using as a rental to help offset the costs of my other units. I've seen OF units advertised for about $2500. Based on your experience can, OV get $1800-2000 for a july week? Thanks.


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## timeos2 (Sep 5, 2011)

MOXJO7282 said:


> does 2BDRM vs. 1BDRM units, so I'm not talking about an off-season 1 BDRM gardenview. Those I agree will probably continue to see downward pricing pressure.



Those weeks don't exist in a vacuum. As more and more of those owners default due to lack of value those fees will push the fees even higher thus the very high probability that overall fees will rise more than average & exceed the level that makes renting viable.  Plus as other areas have lower rentals & fees eventually most buyers/renters decide the value is too good & a view/location, no matter how nice, isn't worth all the extra cost. Thinking this won't occur is, IMO, being blind to what is happening throughout the timeshare world. Far too many think it doesn't apply to their resort / system but they find out the hard way no resort / system is immune. None. It just a matter of to what degree they get hit. Some will be less than others but none will be bypassed. And the odds are against them.


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## Lardan (Sep 5, 2011)

timeos2 said:


> Those weeks don't exist in a vacuum. As more and more of those owners default due to lack of value those fees will push the fees even higher thus the very high probability that overall fees will rise more than average & exceed the level that makes renting viable.  Plus as other areas have lower rentals & fees eventually most buyers/renters decide the value is too good & a view/location, no matter how nice, isn't worth all the extra cost. Thinking this won't occur is, IMO, being blind to what is happening throughout the timeshare world. Far too many think it doesn't apply to their resort / system but they find out the hard way no resort / system is immune. None. It just a matter of to what degree they get hit. Some will be less than others but none will be bypassed. And the odds are against them.



Am I reading what you said correctly that defaults are based on a lack of value?


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## suzannesimon (Sep 5, 2011)

I own 2 beach homes, one in Delaware and another in Florida.  They have both taken another dip in value when I thought the worst was over.  I think vacation properties of all kinds are a luxury that most people can't afford or are afraid to commit to in this economy.  This too
 shall pass if we live long enough.


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## dmaxdmax (Sep 5, 2011)

Rather than the MF vs rental calculation, the issue that most concerns me is the total cost of TS vs the cost of a semi-equivalent vacation.  I know there are folks who spend a lot of time building spreadsheets that consider all sorts of variables such as the savings of eating in vs going to restaurants but this isn't helpful for the way we travel.  Our non-room expenses are all over the map from trip to trip; for example over the last 7-8 years we've:
Rented beach chairs and umbrellas from 0-5 days 
Eaten high end meals 0-3 days
Had any number of overpriced poolside cocktails

The list goes on and on and is a factor of weather and pre-vacation stress as much as anything.  If life has been one solid sprint for a month before the trip we will gasp a little at the price of a margarita but it will have little effect on how many we drink.  Great weather and pleasant breezes result in more sand chair rentals.  Sand flies and jellyfish might keep us by the pool and if we're on a diet we may drink nothing but water, saving a ton of money.

We don't actually drink that much but we are foodies have fallen in love with places at every price point.

I'm sure we'd be better off if we had a budget but we're in our 50s and unlikely to change.

What all this means is that I'm looking for an overwhelming advantage to purchasing a TS before writing a check.  A slight or modest advantage will likely be erased by misc spending that can vary by location.  Fees of $1m per year plus $10m spread over 10 years results in expense of $2m per year which isn't quite overwhelming enough but it's getting there.  Naturally i'm rooting for a lower bottom...insert joke here.


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## MOXJO7282 (Sep 5, 2011)

jont said:


> Joe
> I don't mean to get off topic, but im curious as to how much rental value an oceanfront or oceanside unit has over an oceanview at MOW? I have a plat. OV unit which I am considering using as a rental to help offset the costs of my other units. I've seen OF units advertised for about $2500. Based on your experience can, OV get $1800-2000 for a july week? Thanks.



I don't really know the rental market for MOW other than July 4th OS that I own. I saw the Ebay OS plat and it got me thinking so I'm trying to get up to speed myself on the resort. I do know MOW OV is different than the other OV I own and manage in that they are the back buildings and I do see a much lower selling price point than OF and OS on the few that I've seen. 

Again don't know about the rental market but trying to find out because from what I do know is usually 2 BDRM Marriott on the ocean with a view translates into $2k plus if not more.

 Looking at the offerings on Redweek it tells me a few things. number one there are many listings form plat MOW which translates into high demand no question. Also a number of rental listings are in the $2.5k - $3k range. Assuming they all are inclined to reduce to $2700 for OS/OF, you might expect to get $2k-$2300 for oceanview. 

So if you buy OS plat for $12k and can rent and use successfully, and the sky doesn't fall with MFs, your ROI is 10-12 years. That is still pretty good if you're young at heart and comtemplate traveling for that many years.

Looking at the info I've studied I'd probably seriously be a buyer if the price got to $10k for OS. Maybe I'll make that offer to the seller.


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## MOXJO7282 (Sep 5, 2011)

timeos2 said:


> Those weeks don't exist in a vacuum. As more and more of those owners default due to lack of value those fees will push the fees even higher thus the very high probability that overall fees will rise more than average & exceed the level that makes renting viable.  Plus as other areas have lower rentals & fees eventually most buyers/renters decide the value is too good & a view/location, no matter how nice, isn't worth all the extra cost. Thinking this won't occur is, IMO, being blind to what is happening throughout the timeshare world. Far too many think it doesn't apply to their resort / system but they find out the hard way no resort / system is immune. None. It just a matter of to what degree they get hit. Some will be less than others but none will be bypassed. And the odds are against them.



No disrespect but you are speaking from my BIL's perspective that the glass is always "half empty". I don't prescribe to that. 

If I did we would've missed out on 5 Maui, 5 Grande Ocean, Aruba, MOW trips with my beautiful young family that has been worth a million times more valuable than the rental income that now almost equals my overall spend with Marriott.

Personally we all get caught up in how much is my TS worth when my weeks don't have to have value as long as they continue to rent MFs +$1. Add to that all the great vacations and that is all I need. 

If I lose my job and at some point have to liguidate I'm pretty sure its a long time away from when I will have trouble selling anything I own before I get stuck with one, like so many non-Marriott owners have. 

Weren't you one of them with Westgate? That will never happen with Marriott plat weeks, esepcially the high end but even the lower palt which still sell at least for something.


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## timeos2 (Sep 5, 2011)

Lardan said:


> Am I reading what you said correctly that defaults are based on a lack of value?



Value as defined in resale (which for non-primo weeks is virtually zero at even the best resorts) and vacation for the money. An off season week at even a great resort just isn't worth $1000+ annual fee when hundreds if not thousands of them as good or better go for much less. he owner sees that and is likely to stop paying as the use and resale value just isn't there anymore for that low demand time.

Combine that with the overall poor economy & high unemployment and the weak use times are at tremendous risk of default.


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## OldPantry (Sep 5, 2011)

MOXJO7282 said:


> No disrespect but you are speaking from my BIL's perspective that the glass is always "half empty". I don't prescribe to that.
> 
> If I did we would've missed out on 5 Maui, 5 Grande Ocean, Aruba, MOW trips with my beautiful young family that has been worth a million times more valuable than the rental income that now almost equals my overall spend with Marriott.
> 
> ...



I get the idea that great vacation experiences are "priceless".  True.  Irrelevant to a discussion of what a timeshare is worth, but true.  I wouldn't give up my own lovely Ko Olina experiences, even though they were, in retrospect, grotesquely overpriced.  Refusing to regret the past is healthy; but would you really argue that having those identical vacations at half the price would have made them less wonderful?  It's great that you have enjoyed your timeshares over the years, but what does this have to do with the worth (yes, money) of a timeshare (yours or mine, then or now)?  Would you now be willing to pay twice the going rate for another timeshare, knowing that the memories will be precious?  If so, let's chat.


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## MOXJO7282 (Sep 5, 2011)

OldPantry said:


> I get the idea that great vacation experiences are "priceless".  True.  Irrelevant to a discussion of what a timeshare is worth, but true.  I wouldn't give up my own lovely Ko Olina experiences, even though they were, in retrospect, grotesquely overpriced.  Refusing to regret the past is healthy; but would you really argue that having those identical vacations at half the price would have made them less wonderful?  It's great that you have enjoyed your timeshares over the years, but what does this have to do with the worth (yes, money) of a timeshare (yours or mine, then or now)?  Would you now be willing to pay twice the going rate for another timeshare, knowing that the memories will be precious?  If so, let's chat.


That was my point in our use/rent model we don't really pay for vacations. We take two great vacations a year and our rental income still is well beyond MF+$1. Yes for the first 4 of our 12 unit we bought direct but none since 2004 and that was when MAR points given was 500k, so my overall buy in costs aren't to extreme. 

My original point was there are exceptions to the rule that all timeshares will eventually be $1 and those are the weeks I look to acquire. MOW plat with OS/OF is definitely one of those exceptions.


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## GregT (Sep 6, 2011)

This remains an interesting thread -- the intangible things that I value about a timeshare (that will never make it to a spreadsheet) are:

1) Forced vacations -- I actually have to plan them now (and they can't be canceled because of work)
2) Fabulous memories -- would I really have taken all these vacations without timeshares?
3) Future memories -- I am confident and excited about XX years (God willing) of more memories to come

Strange things these timeshares, because I love them, and yet I am a very very data driven guy.  For me, this is much more emotional/sentimental decision than a financial one.  To his credit, Joe has figured out a system to pay for his portfolio and get his vacations too -- a very creative solution.    I'm just happy to actually go on vacation and have one less stress to deal with.  

Side note, one of my good friends who goes with us to Maui annually always rents the same unit in Kaanapali Alii (2BR OF, $750/night).  Well, that unit was sold to a new owner and is no longer available to rent out.  This summer, he had to take another 2BR, different unit -- and he hated the unit and the location.  He would have paid double to get the old room back.   Not really on point here, but renting isn't always painless -- and its not always a financial decision.  

Best to all,

Greg


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## ronparise (Sep 6, 2011)

GregT said:


> For me, this is much more emotional/sentimental decision than a financial one.



And yet no bidders...

I know you cant put a price on the memories, and they wont show up on my spreadsheet either, but we all have somehow put a price on this timeshare, (ebay # 300591656898) the one that started this thread....and its less than $13,750. How we came to our valuation is not important, whether it be a comparison to similar rentals, or a complicated spreadsheet analysis, or a consideration of possible future memories...The fact is its not worth $13750 to any of us...The open question is: why not?

Marriott's Oceanwatch Villas PLATINUM, OCEAN SIDE! 2/2
2 Bed/2 Bath - Annual Platinum Ownership - Ocean Side!!
Item condition:	--
Time left:	16d 14h (Sep 22, 201112:18:57 PDT)
Bid history:	0

US $13,750.00	
Buy It Now


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## MOXJO7282 (Sep 6, 2011)

ronparise said:


> And yet no bidders...
> 
> I know you cant put a price on the memories, and they wont show up on my spreadsheet either, but we all have somehow put a price on this timeshare, (ebay # 300591656898) the one that started this thread....and its less than $13,750. How we came to our valuation is not important, whether it be a comparison to similar rentals, or a complicated spreadsheet analysis, or a consideration of possible future memories...The fact is its not worth $13750 to any of us...The open question is: why not?
> 
> ...



It's just not at the right price point for this point and time. If they keep lowering gradually as they did once already it will find a home soon in my opinion. A Barony Plat OS recently sold for I think $9800 and I think a MOW plat OS is a better value so I'm thinking around $10.5k -$11,500.


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## DanCali (Sep 6, 2011)

MOXJO7282 said:


> Sure MFs can go to $3k and the sky can fall tomorrow too.



Starwood has resorts with MFs in that neighborhood. And 5-6 years ago MFs at those resorts were half of what they are today. People who bought resale (not a typo) for $40K at that time now have weeks worth less than half that amount.


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## dmaxdmax (Sep 6, 2011)

GregT said:


> This remains an interesting thread -- the intangible things that I value about a timeshare (that will never make it to a spreadsheet) are:
> 
> 1) Forced vacations -- I actually have to plan them now (and they can't be canceled because of work)



Oddly enough we see this as a blessing and a curse.  2 years ago my wife was diagnosed with cancer (she's fine!!) but test results were due the Friday of our TS week.  Some people would be best off losing themselves at the pool but this isn't her personality and that year will be forever remembered as the cancer year.  If we had a regular hotel room/ suite we would have cancelled and booked a room for later in the year.  The results were negative so a future week would have been one of celebration.

Last spring we went to Universal to see Harry Potter.  It was a last minute trip but we got a small suite at a semi-affordable price.  One of our best trips ever but it blew our travel budget for the year.  If we'd had a TS week reserved later in the year we would have missed out on 72degrees with no crowds and great memories.  In fact, the weather was so great that we added a couple of days at Disney's Beach Club.

My mother's health destroyed our summer travel plans and we lucked out that I couldn't rent the week I wanted.  As it happens we're going for a 4 day weekend at the end of September to a deluxe non-TS condo with 3 bedrooms, one for mom.  It's working out perfectly for us at $225 a night.  7 days at MOW would have been great but 4 days at Northbeach Plantation won't stink either.

I love staying at Marriott TSs and will do so again.  In fact we've never had anything but great experiences (except cancer year).  However, the lack of flexibility carries a high price that can't fit in a spreadsheet and is why I need an overwhelming opportunity to justify a purchase.


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## bogey21 (Sep 6, 2011)

The "Bottom" is only important if you want to buy; want to sell; or MFs get out of hand.   Otherwise use and enjoy!!

George


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## GregT (Sep 6, 2011)

GregT said:


> This remains an interesting thread -- the intangible things that I value about a timeshare (that will never make it to a spreadsheet) are:
> 
> 1) Forced vacations -- I actually have to plan them now (and they can't be canceled because of work)
> 2) Fabulous memories -- would I really have taken all these vacations without timeshares?
> ...





ronparise said:


> And yet no bidders...
> 
> I know you cant put a price on the memories, and they wont show up on my spreadsheet either, but we all have somehow put a price on this timeshare, (ebay # 300591656898) the one that started this thread....and its less than $13,750. How we came to our valuation is not important, whether it be a comparison to similar rentals, or a complicated spreadsheet analysis, or a consideration of possible future memories...The fact is its not worth $13750 to any of us...The open question is: why not?
> 
> ...



Ron,

My post was more a philosophical one, prompted by reading other posts about how bad things were going to get and how everybody should just rent.   You'll recall from my early post that I still expect downward pressure on pricing (like Starwood) and perhaps I am too optimistic (for the reasons in my post) for thinking things will not get as bad as has been suggested in this thread. 

Best,

Greg


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## MikeM132 (Sep 7, 2011)

chickenfoot said:


> Its the roman numeral system using Latin alphabet to signify numbers.  Older movies use to use it in the trailer to indicate year produced
> 
> M= 1,000
> C=  100


V=5
I=1
hmmm.......


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## Queen (Sep 7, 2011)

MOXJO7282 said:


> I can guarantee you will never see a MOW plat OS or better at $2,000. Anyone who thinks that just doesn't know MOW and the high demand there is for it.



What is MOW?  I am finding it hard to read the comments with so many abbreviations that I don't know what they mean.

Thanks.


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## cbm32 (Sep 7, 2011)

It does take some getting used to the acronyms.

I believe that one is Marriot Oceanwatch


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## MOXJO7282 (Sep 7, 2011)

cbm32 said:


> It does take some getting used to the acronyms.
> 
> I believe that one is Marriot Oceanwatch


Yes in Myrtle Beach SC.


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