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

[BocaBoy]

Your Hawaii booking experience is the exact opposite of mine. We booked a 2BR Ocean Front at Maui Ocean Club for summer 2016 using points with ease. Booked online at the 12 month release time. In the months leading up to that booking, I shopped the system extensively from January through June and found Hawaii availability to be superb in most unit sizes/views at 12 months out, with many, many check-in dates still being available at 11 or even 10 months.

I agree with this EXCEPT for the MOC Lahaina/Napili towers, which are much harder to reserve and where booking at the 12-month mark is much more necessary.

 

[BocaBoy]

Is it really easy to "borrow" others' points at slightly more than maintenance fees? We're not interested in spending a lot of time concocting ways to save a little more money, so if it's time consuming and complex count us out.

Yes, it is really quick and easy to rent DC points on VPE. You can usually complete a deal and have the points in your account with a few hours max, and if the seller is available by E-mail when you contact him/her, it can take as little as 15-20 minutes until you have the points in your account. Payments are normally made by PayPal. I once listed something like 17,500 points for rent and a deal was completed 20 minutes after the points were listed for the entire block of points. You should also be aware that most sellers will rent you the points you need and not require you to rent more than you need.

 

[JIMinNC]

I agree with this EXCEPT for the MOC Lahaina/Napili towers, which are much harder to reserve and where booking at the 12-month mark is much more necessary.

Yep. I failed to mention I was talking about the original MOC towers, NOT Lahaina/Napili. There was availability in Lahaina/Napili when I was shopping the system, but it was definitely considerably more limited than the original towers. There was some availability, but some flexibility in date/unit would have been required.

 

[GoldenVIKE]

I would like to dig into your math on this one a bit. Not a fan of financing via MVC just to get more bonus points. A few thoughts that may be worth your pondering.....

1. Do you have the ability to pay cash for this purchase, or at the very least finance it using better terms than MVC offers?
2. Do you really need the additional 4000 points offered for financing via MVC for 18 months?
3. If the answer to #1 and #2 are yes, just want to make sure you realize you could easily rent those additional points on VPE (www.vacationpointexchange.com) for somewhere in the $2,000 to $2,220 range. So in reality, paying their financing rate is likely costing you real dollars as opposed to the way you are thinking about it as an additional discounted "value" helping to get your cost per point down.
4. If #1 is yes, and #2 is no....then it clearly makes no sense to finance via MVC.
5. If #1 is no, then I think you need to rethink your overall math regarding if this purchase really makes sense.

These are astute questions and observations, thanks! 1 is a "sort of" and 2 is a "ehh". Financing for 6-18 months does help a bit as we are holding two homes right now after doing a relo; so the fact that it "helps" in the short run and has an incentive attached to it is the reason I decided to do it. I have every intention of paying it off after 18 months.

 

[GoldenVIKE]

Yes, it is really quick and easy to rent DC points on VPE. You can usually complete a deal and have the points in your account with a few hours max, and if the seller is available by E-mail when you contact him/her, it can take as little as 15-20 minutes until you have the points in your account. Payments are normally made by PayPal. I once listed something like 17,500 points for rent and a deal was completed 20 minutes after the points were listed for the entire block of points. You should also be aware that most sellers will rent you the points you need and not require you to rent more than you need.

This is a great tip. I'm comfortable using eBay and PayPal, and this sounds like a similar process. It's on my list to explore this!

 

[davidvel]

Thanks but do you have anything objective to base this on? The math above is just math. None of that came from MCVI people.

People question this because all of us have heard nearly identical, if not verbatim, the same arguments made in presentations. Right down to the phraseology.

That aside, let's look at the math, and some problems: The 4000 one-time points are worth what they would cost to rent (about 4000*.55=$2,200), not $6000. You can’t reverse engineer the cost setting it at $1.50. It is not supported. You lost on the financing, as 400 pts =$2,200-2434=-234. (I don’t know what the tax deduction refers to.) I don’t know how you calculated MR points value, but am sure it is high. But will still give you full credit in your math.) So back to the math:
4000* $10.66/pt =$42,640.
- $1,966 (arguable value of DC points, less loss financing)
- $2,840 (benefit of the doubt for whatever (f) and (g) are)
=$37,834/4000=$9.46/pt

Now let’s use your 10year example:
$37,834 + 21,850 (10*MF+dues of 2,185)= $59,684.
So you pay $5,968.40 each year over 10 years for 4,000 pts.

So, what will you reserve each year for your 4000 points? Will it be worth more than $6,000? Nope.

 

[GoldenVIKE]

I tend to think of things much in the same way that you do. When evaluating the financials of points ownership, we never compare against booking on Home Away, Redweek, VRBO, AirBNB, etc. Too many hassles and risks dealing with other owners, as you allude to. I always compare ownership against the actual ways we would book if we didn't own - hotel online sites, Orbitz, Expedia, etc. or in some cases dealing with a Realtor who has a condo rental operation on behalf of owners. (There we are renting someone's condo, but are dealing with the Realtor, NOT the owner themselves.)

By contrast, many (most?) TUGgers are much more comfortable investing the time, energy, and risk of renting from an owner in order to save some money. So if you are looking for the best possible deal, comparing against a $2500 Redweek rental makes more sense than comparing against a $5,000 booking on Marriott.com. Also, many on TUG are legacy weeks owners who are not totally sold on buying MVC Trust points to get the flexibility and value of the Points system. These points are more expensive than legacy resale weeks, but as you have figured out, Points come with advantages as well. I think you should pay attention to what everyone is saying, keep an open mind, and consider whether any of their very informed points apply to you - but always keep in mind that TUGgers are a group that is much more willing to play the timeshare "game" than it sounds like you are.

I do agree with Fasttr in post #19 that if you are financing the purchase because you can't afford to pay cash, then I would reconsider since MVC financing terms aren't usually great and I'm not a big fan of using debt for a discretionary luxury purchase. But if, on the other hand, you could pay cash and are just using the financing (and absorbing the financing costs) as a way to get the bonus points, then maybe financing is OK based on your numbers. Some have suggested looking at a Hybrid Bundle as the best way to get a better price point on Points ownership, and that is usually the case (that's what we did in 2014), but most of those wind up costing in the same $7-$8/point range where you are already at price-wise, so I'm not sure if it would be worth the "rescind and replace" strategy.

Many TUGgers recommend buying the minimum number of points (1,500) and then renting what you need each year on www.vacationpointexchange.com (VPE), since those points can be "rented" (actually its a points transfer in MVC terminology) for about the same cost as what you would pay in maintenance fees on owned points. That way, you totally eliminate the up-front cost. That is a good alternate strategy since, while VPE rentals are another consumer-to-consumer transaction just like renting on Redweek or VRBO, the transaction is usually totally electronic with payment via PayPal, and once the owner has transferred the points to you, that owner is totally out of the picture and the points are yours to do with as you wish (unlike a condo rental from an owner where the owner is essentially acting as your landlord until your check-in/out). Rented (transferred) points, however, cannot be banked, borrowed, or transferred again, so they are stuck in the use year you acquire them in. As a result, you have to plan your points needs carefully, and a trip cancellation could leave you with points that can't be easily used. For that reason, I think points rentals are a better strategy for occasional years when you need more points than usual, rather than as a permanent alternative to owning points. There are however a number of TUGgers who use point rentals as their primary points strategy.

So I do think that you are approaching this decision to purchase in a methodical and financially consistent way - and have done a good job making an informed decision. Some may disagree with looking at the finances this way, but the way we looked at our purchase in 2014 was very similar to the approach you have taken to validate the economics.

In your post you mention the use of Points for cruises, tours, hotels, etc. I will caution you that your 4000 points won't go very far in the Explorer Collection. You may have to combine two or three years worth of points to book some of those items, and may find that booking direct for cash is just as cost effective. In most cases, MVC has to acquire that inventory from other companies, so it is not as cost effective as using points at an MVC location.

Another caution I will offer is to not assume that booking a Marriott timeshare is as easy as going on Marriott.com or orbitz.com and booking something. Timeshare tends to book much, much farther in advance than the hotel sites do. If you are wanting prime time in Maui, summer in Hilton Head, winter in Florida or the Caribbean, etc. you need to be prepared to be online and/or on the phone right at 9am on the 13-month or 12-month inventory release day. Even then, you may or may not be able to get exactly what you want. Timeshare inventory is limited, so people tend to move fast. So while there is still something of a "game" to any timeshare booking, I absolutely agree the MVC Points system is the closest thing I've found in the timeshare world to just going online and booking a hotel room or condo. It's much easier and less stressful than the old timeshare "weeks-based" trading game through II and RCI. Just don't expect it to be totally without "gamesmanship" or you may become disappointed. So far, we've always been able to get exactly what we want using the Points system, but others can report less successful experiences.

Wow, this is enormously helpful. Thank you so much for taking the time to share some of your wisdom on this. And to everyone that's posted, I think I'm coming to some conclusions here:

1. There are cheaper ways to travel, and more cost-effective ways to manage a timeshare stake, but it looks like you really have to know what you're doing. Most of the posters on this site appear to be experts at this. I'm am a novice, but we'll explore some of those methods over time and who knows maybe in the future we'll change our vacationing strategies. For now, MVC is how we'll dip our toes in the water; and it sounds like most agree that this is at least a better and more cost-effective way to manage travel than booking on marriott.com or orbitz.com. I'm content with the financial aspect of this, even if more savvy TS owners can achieve better "returns" through a more refined strategy.
2. We're going to stay with our 4,000 pt destination club because while the financial aspect of all of this is important, we also are doing this for ease, and while MVC appears to be among the "easiest" TS methods in general, the 4,000 pt ("Select") level comes also with some perks like the ability to book 13 months out. We'll almost certainly end up with more in the future, and when the time comes to expand our vacation portfolio, we may consider resale through a reputable broker (vs. direct), buying legacy weeks, or some of the other methods mentioned on here.
3. It's good to know that renting points or weeks from others can be a good and easy way to augment our travel budget. We'll definitely be doing that. The 7,000 pt level allows for more ability to book Luxury (Ritz-Carlton & FRBO-type luxury homes) properties and shorter stays at the 13-mo window, so that may be where we settle long run; but it looks like once we find the right combination of perks, expanding "ownership" beyond that level may be unnecessary. That's great to know!

 

[GoldenVIKE]

I would humbly suggest that instead of posting a thread asking if it is a good choice and then proceeding in the OP to broadcast that it was a good choice, you open your mind and suspend your analytical conclusions and look objectively at what some very experienced people are telling you here. Many of them started their paths in your EXACT position.

Mmm kay. I shared my thought process, shared various assumptions and variables associated with it, and asked for feedback on it. I was looking for some specific feedback, not general feedback about whether people like MVCI. Not sure how I could have presented this better, but sorry if you were put off by my posting.

 

[dioxide45]

Mmm kay. I shared my thought process, shared various assumptions and variables associated with it, and asked for feedback on it. I was looking for some specific feedback, not general feedback about whether people like MVCI. Not sure how I could have presented this better, but sorry if you were put off by my posting.

Welcome to TUG! We are really a friendly bunch around here. I don't think anyone has negative intentions. I saw this thread last night but opted to not weigh in as there are far more people experienced in the points game than I. I was going to point out that I hope you have some thick skin. This thread has actually gone fairly well with some good points made and only one possible reference to your post sounding like a timeshare salesman. If this was 8 years ago, you would have been accused multiple times of being a timeshare salesman in here to shill and piss us all off. There are several regulars here that have been accused of such, even the moderator.

I do somewhat agree with Ty1on. Your thread title did start out asking if it was a good choice and then you did go on to expunge how it was a good choice. So his/her point is valid. Though, keep a thick skin, you need it around here sometimes. The written work doesn't always come across as one intended it. Just keep at this and you will find that we really are a friendly bunch just wanting to help people in this wonderful world of timeshare.

I am always of the mind set that if someone comes to TUG still within their rescission period that they are always best to rescind their purchase. You have can always go back later and buy the same thing, however, once outside that rescission period you are stuck. You also have something that is financially worth only about a quarter of what you paid for it. However, you seem to have some here with a lot more knowledge and analysis under your belt. You seem happy with what you purchased, if you can justify it to yourself and it makes sense to your family, then go for it. Your happiness is what is most important to you and your family, not what a bunch of friendly strangers think

 

[JIMinNC]

People question this because all of us have heard nearly identical, if not verbatim, the same arguments made in presentations. Right down to the phraseology.

That aside, let's look at the math, and some problems: The 4000 one-time points are worth what they would cost to rent (about 4000*.55=$2,200), not $6000. You can’t reverse engineer the cost setting it at $1.50. It is not supported. You lost on the financing, as 400 pts =$2,200-2434=-234. (I don’t know what the tax deduction refers to.) I don’t know how you calculated MR points value, but am sure it is high. But will still give you full credit in your math.) So back to the math:
4000* $10.66/pt =$42,640.
- $1,966 (arguable value of DC points, less loss financing)
- $2,840 (benefit of the doubt for whatever (f) and (g) are)
=$37,834/4000=$9.46/pt

Now let’s use your 10year example:
$37,834 + 21,850 (10*MF+dues of 2,185)= $59,684.
So you pay $5,968.40 each year over 10 years for 4,000 pts.

So, what will you reserve each year for your 4000 points? Will it be worth more than $6,000? Nope.

Why spread the upfront over only 10 years? The OP is 30-something, so it's not unreasonable to assume a 30-40 year time horizon. Granted, lifestyles change and the OP may not actually own MVCI for 30+ years, so using that long of a holding period is probably just as wrong on the long side as I think using 10 years is way too short. I would suggest something more like 20 years as a middle ground. So, using your numbers:

$37,834 + $43,700 (20*MF+dues of $2,185)= $81,534.
So you pay $4,077 each year over 20 years for 4,000 points.

I couldn't quite follow your numbers vs the OP's numbers in total, but it looked like your numbers may not account for some of the benefits he did - such as the value of the vacation package he was traveling on, which was refunded with the purchase. If so, your numbers may overstate his "net cost"/per point cost somewhat. But using your numbers, the OP would need about $4000 worth of vacations each year out of 4,000 points. For comparison, 4000 points gets you a 2BR OF in Hilton Head in what is basically Gold season (spring/fall) or a 1BR OV at Maui Ocean Club during the second tier points seasons at MOC. Booking either on marriott.com would cost around $4100 to $4500, so about breakeven or a little better at 20 years. If the OP owns his points for 25 or 30 years, the numbers clearly favor the Points vs. Renting.

Obviously, your numbers don't factor in maintenance fee increases which we all know will average 3% - 5% a year. But generally hotel rates rise at similar rates based on industry data over the long term. This relationship between hotel rates and maintenance fees was debated ad-naseum in another thread recently. While the factors that drive maintenance fees increases are somewhat different the those that drive hotel rates (hotel rates are impacted by supply & demand whereas maintenance fees are not), the fact that they rise at similar rates means ignoring inflation in this analysis is probably OK.

 

[davidvel]

Why spread the upfront over only 10 years? The OP is 30-something, so it's not unreasonable to assume a 30-40 year time horizon. Granted, lifestyles change and the OP may not actually own MVCI for 30+ years, so using that long of a holding period is probably just as wrong on the long side as I think using 10 years is way too short. I would suggest something more like 20 years as a middle ground. So, using your numbers:

$37,834 + $43,700 (20*MF+dues of $2,185)= $81,534.
So you pay $4,077 each year over 20 years for 4,000 points.

I couldn't quite follow your numbers vs the OP's numbers in total, but it looked like your numbers may not account for some of the benefits he did - such as the value of the vacation package he was traveling on, which was refunded with the purchase. If so, your numbers may overstate his "net cost"/per point cost somewhat. But using your numbers, the OP would need about $4000 worth of vacations each year out of 4,000 points. For comparison, 4000 points gets you a 2BR OF in Hilton Head in what is basically Gold season (spring/fall) or a 1BR OV at Maui Ocean Club during the second tier points seasons at MOC. Booking either on marriott.com would cost around $4100 to $4500, so about breakeven or a little better at 20 years. If the OP owns his points for 25 or 30 years, the numbers clearly favor the Points vs. Renting.

Obviously, your numbers don't factor in maintenance fee increases which we all know will average 3% - 5% a year. But generally hotel rates rise at similar rates based on industry data over the long term. This relationship between hotel rates and maintenance fees was debated ad-naseum in another thread recently. While the factors that drive maintenance fees increases are somewhat different the those that drive hotel rates (hotel rates are impacted by supply & demand whereas maintenance fees are not), the fact that they rise at similar rates means ignoring inflation in this analysis is probably OK.

I agree, we can't include every variable. In fact I think it gets worse if we do. Reducing his upfront by a few thousand wouldn't really change the annual nut over 10-20 years. Of course, we also omit the value of that money over 10-20 years, which would be there if renting direct.

I frankly don't believe that the OP is a novice, as he describes himself. But I've been wrong, and time will tell. To have your first post titled "Was it a good choice?" and the detailed analysis that really doesn't hit the true cost but uses the time-tested "investment," "prepaid vacations" language raises questions. And then to really not get any responses saying "this is a great deal keep it", but then instantly deciding that he'll keep the deal....I'm still skeptical.

And of course, the comparison is to renting direct vs. buying points, with no examples of real-life usage plans. A potential 20-25 year break even cannot be sold as a good "investment" strategy, IMHO.

 

[GoldenVIKE]

I agree, we can't include every variable. In fact I think it gets worse if we do. Reducing his upfront by a few thousand wouldn't really change the annual nut over 10-20 years. Of course, we also omit the value of that money over 10-20 years, which would be there if renting direct.

I frankly don't believe that the OP is a novice, as he describes himself. But I've been wrong, and time will tell. To have your first post titled "Was it a good choice?" and the detailed analysis that really doesn't hit the true cost but uses the time-tested "investment," "prepaid vacations" language raises questions. And then to really not get any responses saying "this is a great deal keep it", but then instantly deciding that he'll keep the deal....I'm still skeptical.

And of course, the comparison is to renting direct vs. buying points, with no examples of real-life usage plans. A potential 20-25 year break even cannot be sold as a good "investment" strategy, IMHO.

...terms like payback period, return on investment, etc are common terms used by anyone familiar with finance.

I think that the debate has evolved a bit, but in a good way that's educational to at least me certainly.

My initial questions were really just:
1. does owning a TS via MVCI make financial sense vs. owning no TS at all (or vs. some other option that's as easy for a novice to TS and MVCI)?
2. does my math make sense in terms of helping to answer this?
3. should i go resale or direct through MVCI?

Many of the posters have approached the debate from a different angle, and basically answered a different question:
4. could you do better financially through more complex nuanced strategies than by owning through MVCI?

And now my conclusions based on the great education you've all provided are (to the same questions above):
1. yes (there seems to be no debate about this, right?)
2. mostly (with some nuances including the next point #3, but no major faults in logic that would render MVCI a terrible overall decision vs. not owning TS at all)
3. i'm actually starting to lean toward resale now that you've taught me that DC points can easily be rented for around $.55/yr - that does change my math and the way i was valuing those 'throw in' points. Based on this it looks like resale is more like 23-30% cheaper than direct assuming acquisition cost of $4.50 to $5.00. This is in contrast to the 2-15% that I had originally calculated.
4. Unequivocally yes. I'm guessing that every single poster on this thread has found ways to maximize the financial aspect, and probably by a huge margin. But, it seems that the tradeoff is that it takes a lot of time, effort, knowledge, and a tolerance for snafu that at the moment my wife and I don't have.

So for now, we're definitely going with MVCI points system, as this seems like a nice compromise between full-fledged TS participation vs. just booking trips online. We may cancel the contract and go resale. And we may over time acquire the knowledge and appetite for the game that you all seem to be playing very well. If we do that we'd likely augment ownership in MVCI (due to the benefits of ownership such as 13-mo access and more control) with some of the tricks you're all so keen to. Thanks again everyone!

 

[MOXJO7282]

My wife and I (33, 36 yo) with 2 kids (1, 2 yo) just joined MVCI (4,000 points level) mostly to realize financial benefits over time (including in retirement in the distant future), but also for some of the intangible benefits the club offers like access to bigger villas, broader experiences, etc.

Part of our decision to buy was based on financial analysis. I'd like to lay this out to you experienced TS users and see if we're missing anything, or if any of the assumptions I'm making may not be accurate. We're within our 10-day review period so we could still back out...

Booking Value of a Point
First, practically all calculations hinge on how much annual "value" we're going to get out of the points on an annual basis in terms of booking vacations. I understand that this can vary greatly, but based on 50 internet comparisons of how much it'd cost to book various MVC villas through the internet, vs. how much they cost to book with DC points, it looks like assuming about $1.50 per point per year is a reasonable target. (For example, using 4,000 points should be the rough equivalent of spending $6,000 on the open market, and 6000/4000=$1.50) The average was actually $1.21 across the 50 searches but valued-minded owners can skew that upward. Still, I ran numbers at $1.50 and $1.20 just to get a range.

Owner Up-Front Acquisition Costs
Second, the way ownership is acquired is a big factor too. In doing a little research on the internet we decided to buy through Marriott rather than go resale because (a) it seems a hell of a lot easier and our time is valuable, and (b) the ultimate cost per point that you pay (after Marriott's incentives w/ direct and after junk fees with resale) is about the same. To buy resale looks like you'll be a little over $7 per point after you pass ROFR w/ a $5+ bid, and after you pay the transfer, education, closing, and other junk fees. Our all-in cost per point was $7.56 after incentives. Those included (a) 20% discount off of the $13.32 starting price (b) $999 reimbursement of our presentation trip (c) $1750 bonus due to adding an extra day onto our presentation trip (subtract $400) - you have to ask special for this (d) 4,000 bonus points for signing up at presentation - valued at $6,000 (e) 4,000 more bonus points for financing 70% of the purchase, which are net valued at $3,566 considering interest fees and tax deduction in the 18 months required to carry the loan for the bonus (f) $1,660 value of putting all up-front costs on Marriott Rewards card for 5x points, and (g) $1,180 closing costs. In summary depending on exactly how much you get resale points for, (using $4.50 to $5.00 range before junk fees) and assuming an annual booking value of $1.20 to $1.50 per point, the potential savings for going resale is around 2-15% (see below). Not worth the headache to us. Note that the math would be different at different levels of ownership.

Point: @$4.50 @$5.00
$1.20: -15.18% -9.02%
$1.30: -13.15% -6.85%
$1.40: -11.02% -4.56%
$1.50: -8.78% -2.16%

Calculating the Value of MVC Ownership
There are several ways to calculate return on a potential investment and I looked at just about all of them...

Perpetual Bond: 7.7% to 12.2% return on investment
Taking the future marginal value of the booking value of a point, over the maintenance and ownership fees yeilds $0.62 (@ $1.20) to $0.92 (@ $1.50) in net value per point per year. In the $1.50 per point example, that's $1.50 - $0.53 annual maintenance fee - $0.05 annual dues ($185 / 4,000 points) per point. Simply dividing the annual "return" on a point into the initial "investment" in that point is a simple calculation of interest as if it were a perpetual bond.

Internal 30-year Rate of Return: 6.1% to 11.5% return on investment
This method looks at all future cash flows and then finds the interest rate that would make the net present value $0. The range of results for our particular situation is 6.1% (at $1.20/point) to 10.4% (at $1.50/point). Add about a point to that if you successfully acquired a resale allotment of points at a discount vs. buying from Marriott direct. Note that this method doesn't contemplate some big things, including (a) the inflation hedge benefit of MVC ownership, (b) any residual value at 30 years, meaning that if the ownership still has value or can be re-sold for any amount at the end of the 30 year period, that's just a bonus.

Breakeven exit period: 3-7 years
The amount of time it'd take to be able to realize a break-even proposition when netting out (a) upfront costs (b) future savings and (c) cash-out in this case assuming the ability to sell at $4 per point in the resale market. Buying direct from Marriott range is 4-7 years, with 3 years possible if you get a good resale deal and realize $1.50 annual booking value per point.

Payback period: 8-12 years
Similar to the above, but assuming you're not going to sell and exit, it'd take a little longer to reach the point at which the total amount you've paid is equal to the total market value of the travel that you've booked through MVCI. Shave a year off both ends if you score a great deal on a resale. It's interesting to note that this goes to 20 years if the booking value per point drops to $1.00.

Cumulative Net Value: possibly over $100,000
In taking the cumulative net values of all incoming and outgoing cash, and not discounting or adjusting for inflation due to an assumption that while the cost of maintenance will go up over time, so will the cost of travel in general (they net each other out), here's the estimated net value at various milestones (looking at buying direct from Marriott only, as the additional value gained from scoring a good resale stake is minimal)

Time @$1.20 @1.50
1 year -$9,044 -$3,124
5 years -$4,034 $4,246
10 years $8,441 $22,721
20 years $33,391 $59,671
30 years $58,341 $96,621
.... and it'd keep going up from here

Cumulative Relative Discount: 20-40% cheaper travel for long-term MCVI owners
Using the same math as the payback period, this compares the total you've spent vs. the market value of all of your travel at various points in time, to calculate the cumulative effective discount (or premium) you've had on your travel due to being a MVCI owner. Here are some examples at various milestones...

Time @$1.20 @1.50
5 years +49.7% +26.1% (the + means you're paying more in the early years)
10 years +10.3% - 9.0%
20 years - 16.9% - 32.4%
30 years - 27.6% - 41.4%
.... and the discount would keep going in the same direction

Financial Summary
The stuff above made this a pretty easy decision for us, or at least easily justifiable from a financial perspective. Of course it all falls apart of the average booking value of a point goes down though. For example, if it falls to $1.00 then the payback period becomes 20 years and the IRR falls to 2.7%-3.9%; so it's really important that we continue to be able to book trips for fewer DC points than it'd cost $USD to book outside of the MVCI structure. This is why I'm very interested to hear your actual experience and perceived booking value of a DC point.

Intangible Benefits
And of course there are many cherries on top. I've been a frequent Marriott traveler w/ lifetime gold status, and enjoy and trust the brand. The ability to get early access to booking very desirable 2 and 3-br villas is going to be great for our family. As is the fact that being part of MVCI makes it easier and less awkward to invite friends and family to just come along, since everything is paid for already anyway (close enough). Not to mention other perks and experiences through Interval International, Homes, Cruises, MVP discounted bookings, etc. Plus just having something that psychologically feels like we're building wealth, having fun, and being part of a club; and ultimately can pass this down to our kids -- all of that stuff is truly icing on the cake to use a second dessert analogy in the same paragraph.

Anyway, if you've made it this far through this rambling post--uhh--thank you?! Sorry?! I'd love to hear feedback though to help us confirm whether we've made a good choice or not. How do you all feel about being MVCI members? Any regrets? Feeling the value? Thanks!

PS: Kudos to our TS Sales Rep w/ MVCI Allen Larkin. He was very transparent, forthcoming, and helpful. I'd recommend him to anyone that wants to learn more about MVCI.

...terms like payback period, return on investment, etc are common terms used by anyone familiar with finance.

I think that the debate has evolved a bit, but in a good way that's educational to at least me certainly.

My initial questions were really just:
1. does owning a TS via MVCI make financial sense vs. owning no TS at all (or vs. some other option that's as easy for a novice to TS and MVCI)?
2. does my math make sense in terms of helping to answer this?
3. should i go resale or direct through MVCI?

Many of the posters have approached the debate from a different angle, and basically answered a different question:
4. could you do better financially through more complex nuanced strategies than by owning through MVCI?

And now my conclusions based on the great education you've all provided are (to the same questions above):
1. yes (there seems to be no debate about this, right?)
2. mostly (with some nuances including the next point #3, but no major faults in logic that would render MVCI a terrible overall decision vs. not owning TS at all)
3. i'm actually starting to lean toward resale now that you've taught me that DC points can easily be rented for around $.55/yr - that does change my math and the way i was valuing those 'throw in' points. Based on this it looks like resale is more like 23-30% cheaper than direct assuming acquisition cost of $4.50 to $5.00. This is in contrast to the 2-15% that I had originally calculated.
4. Unequivocally yes. I'm guessing that every single poster on this thread has found ways to maximize the financial aspect, and probably by a huge margin. But, it seems that the tradeoff is that it takes a lot of time, effort, knowledge, and a tolerance for snafu that at the moment my wife and I don't have.

So for now, we're definitely going with MVCI points system, as this seems like a nice compromise between full-fledged TS participation vs. just booking trips online. We may cancel the contract and go resale. And we may over time acquire the knowledge and appetite for the game that you all seem to be playing very well. If we do that we'd likely augment ownership in MVCI (due to the benefits of ownership such as 13-mo access and more control) with some of the tricks you're all so keen to. Thanks again everyone!

Please don't take this the wrong way because I'm not trying to be rude but I find it amusing that you can do all this in-depth analysis that you obviously spent hours on but you're afraid that booking resale weeks vacations will be too challenging. That is the first fallacy you have to get past. Once you become an expert like we are on TUG you can maximize any of the systems without too much effort so for me it's what resale system works best for what you want, but rest assured either one is not the time consuming effort you make it out to be so spending extra money to avoid this extra work is not a valid reason.

I have one question for you that to me makes the difference between going with resale points or resale weeks because to me resale weeks are much easier to deal with and can bring much more value with less initial investment.

Do you want to take vacations for less than 7 days? If the answer is yes then I'd say the points system is the way to go, however if you always see your family taking 7 day vacations then I'd say to seriously explore the resale weeks program.

And with all the number crunching you did here's the only way to create a TS investment, buy multiple Marriott prime location 2BDRM units and rent them for profit, reserving one for use by your family.

You were going to spend $30-40k? Here's an example.

Buy 4 Newport Coast plat resale weeks for approx $32k (4 x $8k). Annual MF is approx $5200 (4 x $1300 MFs). Rent 3 units very easily on Redweek for minimum $2200 ( I received $2400 each for my 2017 rentals) each for income of $6600. That gives you an annual ROI of $1400 per year and a free week to use.

You can do this with a number of prime Marriotts very easily. I've been doing so with a few dozen Marriotts for 14 plus years. And I'll emphasize it doesn't take a ton of effort with Marriotts popularity and Redweek's customer base. You just need the initial capital to get started and the plan I just outlined.

Good luck in your final decision but I would strongly suggest you rescind, because any deal you got will still be there at any time, and expand the great knowledge that your getting now by continuing to read TUG and ask questions because most everyone here has gone through what you're going through and would love to help you save a ton of money.

 

[GoldenVIKE]

I see the irony - spreadsheets are easy for me and i had a lot of free time on the plane & Admirals Clubs over the past couple of days. This is very good advice and I'm seriously considering our options based on everyones' feedback. Thank you!

 

[Saintsfanfl]

I frankly don't believe that the OP is a novice, as he describes himself. But I've been wrong, and time will tell. To have your first post titled "Was it a good choice?" and the detailed analysis that really doesn't hit the true cost but uses the time-tested "investment," "prepaid vacations" language raises questions. And then to really not get any responses saying "this is a great deal keep it", but then instantly deciding that he'll keep the deal....I'm still skeptical.

That's what I thought after the initial post but not anymore. I'm fairly certain the OP is using their real name and is in a profession that routinely requires a high level of detailed analysis. Their post makes perfect sense for who they are.

 

[Fasttr]

If you are seriously considering resale points, take a look at post #266 in this thread where GregT just passed ROFR on a batch of 2000 points at $2.25 per point, putting his all in costs after the junk fees at approx. $4.25 per point.
http://tugbbs.com/forums/index.php?threads/rofr-metric-ongoing-rofr-activity.226718/

 

[larryallen]

I am not a mathematician so I got lost early in the first thread but feel confident renting is cheaper in the long run. Redweek almost always has the week I want at the resort I want and often for cheaper than the annual dues. Having said that there is an appeal to the points and I do appreciate that. However, there is absolutely nothing, from a monetary standpoint, that is economical about buying points from Marriott. The dues get more expensive and are due EVERY year no matter what. Hopefully you will find value in your purchase. Use the heck out of them and maybe you will.

 

[Quilter]

I've passed on reading this thread until today. It was getting so much attention I just had to see what was going on.

Well, if you ask me . . .

First, why should we try to talk this guy out of his purchase. We need these novice people to buy and keep MVC solvent.

But that is probably talking to the wind, so my further thoughts on this are . . .

OP says he's doesn't want to invest a lot of time thinking about this but looking at the way his brain calculates every angle he will be investing lots of time with every booking. I suspect he'll analyze if they should check-in on Saturday or Sunday in order to save points and if they really want that Friday. He will get into the MR points and invest time working that system. You can't own in the system and get the best value without working the system and working the system is a definite investment of time.

OP is young and so is his family. The expectations on travel will evolve as the family grows. I don't believe he can actually know and plan how he'll use the system in 3 years much less 10.

IMO the easiest, simplest way to work the MVC system is to find a seasoned owner you develop a trusting relationship with, who is at the Chairman level, who rents their weeks and points and have them book inventory 13 or more months out. There are many here on TUG.

 

[taffy19]

I agree with Quilter because this industry is changing too fast and not in the timeshare owner's favor, IMHO.

I've passed on reading this thread until today. It was getting so much attention I just had to see what was going on.

Well, if you ask me . . .

First, why should we try to talk this guy out of his purchase. We need these novice people to buy and keep MVC solvent.

But that is probably talking to the wind, so my further thoughts on this are . . .

OP says he's doesn't want to invest a lot of time thinking about this but looking at the way his brain calculates every angle he will be investing lots of time with every booking. I suspect he'll analyze if they should check-in on Saturday or Sunday in order to save points and if they really want that Friday. He will get into the MR points and invest time working that system. You can't own in the system and get the best value without working the system and working the system is a definite investment of time.

OP is young and so is his family. The expectations on travel will evolve as the family grows. I don't believe he can actually know and plan how he'll use the system in 3 years much less 10.

IMO the easiest, simplest way to work the MVC system is to find a seasoned owner you develop a trusting relationship with, who is at the Chairman level, who rents their weeks and points and have them book inventory 13 or more months out. There are many here on TUG.

 

[JIMinNC]

I have one question for you that to me makes the difference between going with resale points or resale weeks because to me resale weeks are much easier to deal with and can bring much more value with less initial investment.

Do you want to take vacations for less than 7 days? If the answer is yes then I'd say the points system is the way to go, however if you always see your family taking 7 day vacations then I'd say to seriously explore the resale weeks program.

While weeks ownership is a better solution for many people, based on what the OP has said about their inclinations and preferences, I think weeks ownership would prove to be an exercise in frustration for them (as it has always been for us). Even if they don't want to travel in shorter increments, the Points program avoids the frustration and waiting to get an II trade. Yes, you can capture some good trips with weeks exchanges, but I just have a feeling from his posts that the OP prefers to go online and book what he wants rather than going through the process of putting in an ongoing search with Interval International and then waiting for potentially months for a trade to match. Weeks trading can be exceedingly frustrating for someone who likes to just book the trips they want.

Having said that, as TUGgers know, you can get some great values with weeks-based trading - we traded a lowly Silver HHI Barony Beach Club Gardenview week to get a September 2017 week at HHI Grande Ocean (Gold season). We placed the request in early April 2016 and gave II a wide possible travel window from mid-Sept through the end of October 2017, but we didn't get a match (a mid-September week) until late November right after Thanksgiving. Having said that, booking the same reservation at Grande Ocean with points would have required 3450-4000 points (depending on view category), so that equates to a maintenance fee cost of roughly $1,825 to $2,100. Our maintenance fee cost on the 2017 Barony week was only $1,351 (and that was inflated by the $75 Hurricane Matthew special assessment). So it was a good financial deal to trade this time instead of using Points, and we may play the weeks trading game from time-to-time, but I am very glad we own both an enrolled week and Points, so we have the option to use either system. I can't imagine being forced to revert back to weeks based trading for EVERY trip we want to take. That's why we sold a non-Marriott week we used to own that traded in RCI, and bought into the Marriott system in 2014. I detest the waiting and uncertainty of trading. While Points come with no assurances either, it's much closer to "what you see is what you get."

Now obviously, if the OP has a specific destination they want to go to every year, or almost every year, then owning a week-based interval at that resort makes 100% better sense than buying Points. But if they want to travel to lots of places, I would be concerned that leading them towards weeks trading would result in their ultimate frustration with timeshare ownership.

And with all the number crunching you did here's the only way to create a TS investment, buy multiple Marriott prime location 2BDRM units and rent them for profit, reserving one for use by your family.

You were going to spend $30-40k? Here's an example.

Buy 4 Newport Coast plat resale weeks for approx $32k (4 x $8k). Annual MF is approx $5200 (4 x $1300 MFs). Rent 3 units very easily on Redweek for minimum $2200 ( I received $2400 each for my 2017 rentals) each for income of $6600. That gives you an annual ROI of $1400 per year and a free week to use.

You can do this with a number of prime Marriotts very easily. I've been doing so with a few dozen Marriotts for 14 plus years. And I'll emphasize it doesn't take a ton of effort with Marriotts popularity and Redweek's customer base. You just need the initial capital to get started and the plan I just outlined.

Good luck in your final decision but I would strongly suggest you rescind, because any deal you got will still be there at any time, and expand the great knowledge that your getting now by continuing to read TUG and ask questions because most everyone here has gone through what you're going through and would love to help you save a ton of money.

As far as the rental approach is concerned, I guess I don't have the patience for that either, and based on the OP's comments, I wonder if they would have the same concern. I'm also not enamored with the person-to-person rental market, either acting as a renter or as a landlord. My one experience with trying to rent something on Redweek was not positive, so that does taint my perspective a bit. We had to cancel a summer 2016 trip to Maui, so before canceling the reservation and getting the Points back, we first tried to rent the week on Redweek. We priced it in line with the other summer 2BR OF Maui Ocean Club weeks, waited about 3 or 4 months, and only got one nibble from someone looking to see if we would cut the price significantly. About 90 days before the date of the booking, I gave up and canceled the ad and called Marriott and had the points refunded to our account. We then used those points freed up from the one week Maui trip to book 14 nights at other MVC locations in 2016 and 2017.

Back in 2014 when we were trying to decide whether to buy into the Marriott points system, we received all the same advice as the OP is receiving, "Focus on weeks not Points, because Points are expensive"; "Just find another owner who will book the reservation for you and rent it from them"; "Buy weeks, rent them out for cash to other owners, and then use that cash to rent your own trips from other owners". In the end, we decided that pure weeks ownership was too inflexible for us to rely on as our primary vacation strategy. We also concluded we were totally uncomfortable renting from other owners and having to trust someone we didn't know to hold the reservation for us. We prefer to control our own reservation and not be listed just as an "additional guest" on the reservation of a complete stranger. In the end, we decided on a Hybrid Bundle built around a week at Barony Beach Club in Hilton Head. That gave us Points to use in the Points system, but also gave us a traditional enrolled week we could opt to use at Barony (4 hour drive from home) or even play in the II game from time to time. We don't regret that for a minute, and so far, it's worked out great for us. We usually book with points, but it's nice to know if we find a traditional week-based trade that we think should be pretty close to a sure thing to get, we have the option to try that as a cheaper alternative to points.

So my point in all this is to point out to the OP that many people on TUG have found different ways to make the system work for them - some prefer weeks, some of us prefer points, and others prefer renting - he just needs to figure out which category he falls into.

 

[dgf15215]

GoldenVIKE - if you're looking at this purchase using an economic model you should probably give it up while you can. This coming from someone who has a fair number of points (a combination of three different timeshares purchased before points and VC points purchased once they were available). The value of the system for us is that it commits us to vacation in great spots in wonderful facilities for weeks of the year. When our children were at home the scheduling was a bit tougher but we got through it; today they know that eventually they'll be inheriting our vacation assets. We are fortunate in that we're both self-employed and can schedule ourselves as convenient. We (well, actually my wife) have learned how early we need to book to get our first choices.

We also own a summer vacation condo about three hours away from us in a place with a short summer season that we use plus rent out for part of the summer; as president of the condo association I know what it costs to keep up a simple facility like ours and how much effort as a group we need to expend. I didn't want to own another property even further away that I had any responsibility for other than to pick up a key and return it some days later. We are not sure if we would ever decide to book any of these properties if we had to pay cash out of hand for each week. As it is we "own" them and need to use them. Yes, maintenance fees are high but when I looked at purchasing a small condo in FL (back when the market was ripe) and found out what the maintenance costs were I turned around and bought more VC points for ourselves . . . I'd prefer to sit on the beach and read rather than worry about a broken dishwasher or squeaky door.

So you might be better off not thinking of this as some "smart" investment because as has been repeated here, it has it's limitations in that regard. Your advantage is that the purchase cost for you will be spread out over 35-45 years of your use followed by another generation of usage by your children and their families. You'll pay the maintenance fees with your Marriott VISA card and collect points to use in the hotel system and use those points with great pleasure.

Good luck.

 

[JIMinNC]

GoldenVIKE - if you're looking at this purchase using an economic model you should probably give it up while you can. This coming from someone who has a fair number of points (a combination of three different timeshares purchased before points and VC points purchased once they were available). The value of the system for us is that it commits us to vacation in great spots in wonderful facilities for weeks of the year. When our children were at home the scheduling was a bit tougher but we got through it; today they know that eventually they'll be inheriting our vacation assets. We are fortunate in that we're both self-employed and can schedule ourselves as convenient. We (well, actually my wife) have learned how early we need to book to get our first choices.

We also own a summer vacation condo about three hours away from us in a place with a short summer season that we use plus rent out for part of the summer; as president of the condo association I know what it costs to keep up a simple facility like ours and how much effort as a group we need to expend. I didn't want to own another property even further away that I had any responsibility for other than to pick up a key and return it some days later. We are not sure if we would ever decide to book any of these properties if we had to pay cash out of hand for each week. As it is we "own" them and need to use them. Yes, maintenance fees are high but when I looked at purchasing a small condo in FL (back when the market was ripe) and found out what the maintenance costs were I turned around and bought more VC points for ourselves . . . I'd prefer to sit on the beach and read rather than worry about a broken dishwasher or squeaky door.

So you might be better off not thinking of this as some "smart" investment because as has been repeated here, it has it's limitations in that regard. Your advantage is that the purchase cost for you will be spread out over 35-45 years of your use followed by another generation of usage by your children and their families. You'll pay the maintenance fees with your Marriott VISA card and collect points to use in the hotel system and use those points with great pleasure.

Good luck.

BOOM! You nailed it!

Sometimes we get so twisted around trying to compare owning to renting and doing all the financial models, we lose sight of the REAL benefits of ownership vs. rental. Sometimes it's not just about the money, but about the intangible benefits that can't be put on a spreadsheet. After almost 20 years of timeshare ownership in two different systems, I can agree wholeheartedly that because we owned something where we were committed to paying the annual fees anyway, we took many great trips we might not have opted to take had we been forced to make the decision to rent. I don't like the term "forced vacations", but knowing that you have accommodations already paid for each year makes the question, "Where do we want to go?", not "Do we want to go at all?"

It's sorta like the summer vacation condo you said you also own. You can certainly do a financial analysis to see whether you are making money or losing money on that ownership, or whether you could save money by just renting instead of owning. But you can't put a price on the value of having a place to go where you can decide to go at the last minute, without making a reservation, and without planning. You own it, so if you decide on Thursday night you want to drive the three hours to spend a weekend at your place, you can. That's an intangible benefit you can't put a price tag on.

I know it's timeshare sales-speak to use the term "prepaid vacations", but there is considerable truth to that statement nevertheless, and it remains one of the most powerful intangibles for timeshare ownership.

 

[davidvel]

I see the irony - spreadsheets are easy for me and i had a lot of free time on the plane & Admirals Clubs over the past couple of days. This is very good advice and I'm seriously considering our options based on everyones' feedback. Thank you!

Could you give us your spreadsheet with the 50 internet comparisons of how much it'd cost to book various MVC villas through the internet, vs. how much they cost to book with DC points?

This is the bedrock of your entire analysis.

 

[GaryDouglas]

When is/was the end of your rescission period?

 

[b2bailey]

On a side note -- I just want to say I am impressed by the 'brain power' revealed on this post.

Question remains -- is there a valid reason to purchase Marriott direct if there are resale points available for purchase?