# Lower maintenance fees



## tstraveler2 (Nov 15, 2014)

I am new to Wyndham and now understand maintenance fee rates vary from place to place.  I am interested in buying resale points and would appreciate information on the resorts with the lower rates.  Thank you.


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## staceyeileen (Nov 15, 2014)

tstraveler2 said:


> I am new to Wyndham and now understand maintenance fee rates vary from place to place.  I am interested in buying resale points and would appreciate information on the resorts with the lower rates.  Thank you.



Bali Hai
Canterbury
National Harbor
Panama City Beach

Those are some of the lowest...


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## spackler (Nov 15, 2014)

Smoky Mountains seems to be a lower-than-average one that can be obtained for little upfront cost.


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## tstraveler2 (Nov 15, 2014)

Thank you for the help.


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## pacodemountainside (Nov 15, 2014)

Don't make the newbies  mistake of focusing on lowest MF. Just like when buying car, what is total cost,   not low monthly payment which dealer reduces by increasing length of loan

Most people want low MF with exceptions like must have ARP  at a specific resort.

When doing your homework you will generally find low MF have high up front cost so over 10 year period   often  cost more.

Is Developer subsidizing  MF to facilitate  sales?

Does resort  not have adequate reserves or insurance?

Does resort charge $150+ for parking?

Does resort nickel  and dime you for  everything?

Beware of points inflation if  staying at resort.


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## spackler (Dec 6, 2014)

pacodemountainside said:


> Is Developer subsidizing  MF to facilitate  sales?



I heard this thrown about on the TUG boards from time to time...is there any solid evidence that this happens?


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## markb53 (Dec 6, 2014)

spackler said:


> I heard this thrown about on the TUG boards from time to time...is there any solid evidence that this happens?



I've heard that too, but I don't think anyone has presented a concrete example of that. I have been several times to Canterbury in San Francisco. The first presentation I did there, they were selling Canterbury points. The last time they were selling CWA and what they said were foreclosed Canterbury points. They claimed Canterbury was fully sold. If you look at the MF since it opened in 2009, I haven't seen a big jump in MF. I has gone up. But not more than other Wyndham timeshares. Canterbury is still one of the lowest MF in the Wyndham system.


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## pacodemountainside (Dec 6, 2014)

spackler said:


> I heard this thrown about on the TUG boards from time to time...is there any solid evidence that this happens?



YES!  In Wyndham SEC 10K Main Man clearly states WVO does.


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## ronparise (Dec 6, 2014)

Paco, I havent read the filings, and I know you are the accountant here, but I dont think they subsidize mf in the sense that the fees are less that they would be because of the subsidy 

Think of a hypothetical 100 unit resort that has just been completed and the sales staff has just been given 5000 (100  x 50)  weeks to sell.  This resort has a 2.5 million dollar operating budget including reserves so the mf for a weeks ownership  is calculated to be $500 

So at the end of year one of sales, lets assume 1/4 of the intervals  1250 were  sold and these 1250 new owners have paid $500 each in maintenance fees or $625000.  not nearly enough to maintain the place. so where does the rest of the money come from? The answer is the developer subsidy They make up the difference between what is collected and what is needed to pay the bills. But they dont put in any extra to reduce the $500/unit that is the calculated 1/5000 of the resorts budget/...that would be against the law

So the developer subsidizes the hoa until the place is sold out, but they dont subsidize in the sense that mf is kept artificially low to encourage sales. 

The low mf rate at certain of the Wyndham resorts is low because of the high points requirement to stay there, not because it costs less to maintain these units or because of any developer subsidy. Actually the rate x the number of points results in a higher mf (in actual dollars collected) per unit for these  so called low mf resorts,


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## vacationhopeful (Dec 6, 2014)

ronparise said:


> ....The low mf rate at certain of the Wyndham resorts is low because of the high points requirement to stay there, not because it costs less to maintain these units or because of any developer subsidy. Actually the rate x the number of points results in a higher mf (in actual dollars collected) per unit for these  so called low mf resorts,



And this makes it attractive to current owners to trade in points to UPGRADE to the new resorts. "LOOK, I spent $180 per 1,000 points but traded in my older points with a higher MFs and got a $145K per 1,000 point credit towards my new contract which makes me VIP RICHIE RICH level with a NEW month payment of ONLY $3XX for 15 years plus 300,000 free bonus points. See, I am paying less per 1K of points in MFs, have the same loan payment and own at the newest resort which will NOT have any special assessments."

And this is why the US population was trading in cars every 3 years where car loans went from 3 years to 4 years to 5 years to NOW 6 years as the normal loan length .... OR simply LEASE your car or truck for 24 month now.

This is from the a person who finished paying on her 5 year truck loan 3 years ago and her 5 year car loan 4 months ago .....


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## ecwinch (Dec 9, 2014)

They do subsidize m/f... but in the major states (i.e. Florida. California, etc) are required to disclose the subsidy in the sale paperwork.


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## Joe33426 (Dec 9, 2014)

ronparise said:


> Paco, I havent read the filings, and I know you are the accountant here, but I dont think they subsidize mf in the sense that the fees are less that they would be because of the subsidy
> 
> Think of a hypothetical 100 unit resort that has just been completed and the sales staff has just been given 5000 (100  x 50)  weeks to sell.  This resort has a 2.5 million dollar operating budget including reserves so the mf for a weeks ownership  is calculated to be $500
> 
> ...



I agree with Ron, there is generally no subsidy of MF made by developers in the sense of a "subsidy".  At least in Florida, Developers are required to fund any operating deficit during the guarantee period (in lieu of making MF payments on units owned by the Developer).  Guarantee periods generally last from inception until a few years later and can sometimes be extended depending on the association's governing documents.  Funding of the deficit is generally cheaper than paying maintenance fees on units owned, which is why Developers generally fund the deficit.  

Developers can; however, make the original operating budget intentionally low to encourage sales.  A budget is just an estimate and the original budget adopted by the Developer is usually renewed year after year during the guarantee period.  During that period and often thereafter, the Developer controls the Board, so budget is approved.  

What happens when guarantee period ends or Developer turns over the Association to the unit owner is another story.  No more guarantee of operating deficits and reserves are usually underfunded so maintenance fees increase.  So, was the Developer intentionally keeping MF low?  I think so...


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