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Exchanging seems too good to be true

ski_sierra

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I have been reading a few threads where people were able to stay at extremely nice properties by exchanging their properties with much lower MFs.

It almost feels too good to be true. I understand it doesn't happen consistently. But many people consistently trade into resorts with much higher MF and buy in costs than their own.

I just wonder how this is possible? The owner paid a lot of money to have that week. They could rent it out instead of paying an exchange company. It seems like not everyone wants to put the work into renting their nice week out. It should be much easier since AirBNB has become so popular. Not sure how people rented things out before.

Or some people who own timeshares are too rich/busy and don't even bother to use their week. And savvy TUGgers get to enjoy it.

It's pretty amazing to leverage your knowledge and get way more than you spend. I'd love to hear your insights on what makes this system work.
 

T-Dot-Traveller

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I have been reading a few threads where people were able to stay at extremely nice properties by exchanging their properties with much lower MFs.
It almost feels too good to be true. I understand it doesn't happen consistently. But many people consistently trade into resorts with much higher MF and buy in costs than their own.
It's pretty amazing to leverage your knowledge and get way more than you spend. I'd love to hear your insights on what makes this system work.

Exchanging allows for a form of arbitrage . When used well you have an opportunity to have the results
you have noticed reading TUG threads .

A historic example was the South African resorts termed” tiger traders “ . For a period of time RCI gave higher TPU’s to these resorts AND the MF cost when paid in USD was quite low due to currency exchange rates .

This history was something I learned reading TUG / as it predates my knowledgeable timesharing .
If you go to the International Forum you will still see occasional posts by TUG members who still own them (and likely have never been there). I believe an average one currently gets about 15 TPU’s for a MF
of $ 300 range .
 
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alwysonvac

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Or some people who own timeshares are too rich/busy and don't even bother to use their week. And savvy TUGgers get to enjoy it.

Normally, folks will try to rent their high demand weeks. But keep in mind not all weeks are in demand. For example, most folks want to visit a ski resort during peak ski season or visit a beach resort during peak summer season.

Some owners will decide to deposit their high demand weeks into an exchange company if they can’t find a renter in time so they can get some sort of use out of their week.
Here’s what I wrote in an older thread about renting.

There are lots of folks who rent their timeshare regularly but just be aware renting is not as easy as it sounds.
Definitely read the HOW TO articles if you decide to go down this path
NOTE:TUG Moderator DeniseM has a rental service, she might be able to help you rent some points - http://www.denisetravels.com/rentalservices.htm
Here are some things, you'll want to consider if you're planning to rent.

First, you'll want to rent a high demand week at a high demand resort. However high demand weeks are the first to be reserved by owners, so you have to select a week to rent with hopes that a renter will be willing to accept your travel dates. Here's a thread with some helpful renting tips - Newbie Question - My units are not renting! Why?

As the landlord, you may have to deal with
- the hagglers (you know the type, if it was marked 25 cents they would ask if you would accept 5 cents and sometimes it's down right insulting)
- the sad stories (those wanting you to drop your prices because their family can't afford your rate and they really want a vacation)
- the tire kickers (who will ask you all sorts of questions with no intent of renting)
- the scammers (fake checks, advertisers, etc)
- renters that don't understand timeshares and expect the same results as booking a hotel. (may not be able to change the travel date, no daily housekeeping, etc)
- renters expecting you to resolve their resort issues or expect compensation for problems encountered during their stay

Some of the TUG stories over the years
- Someone is trolling the classified ads, trying to steal personal information
- Renter wants my bank info to wire me money
- Charge back from Paypal for rental -- after renter checked in
- What would you do? [renter wants to cancel]
- GERMAN COCKROACH in HAWAII! Is RENTER due COMPENSATION? THANKS for ADVICE.
- A Warning to Renters! [last minute' rentals, then stiffs you with a bad check]
- Are you responsible for renters who skip bills?
- Any experience with a non-paying renter?
- First Issue Renting my Timeshares
- Can I get my money back?
- Feedback please! (bad rental?)
 

mdurette

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As others have mentioned, some of the units are developer inventory and a lot of people can't be bothered to rent out there week (personally....I'm probably one of them)

But, also keep in mind that many of these high demand weeks you see may have been traded for another high demand.

Example: Bob owns a great ski resort during peek winter season - but he wants to go to great resort in Hawaii instead this year.
He makes the easy exchange into Hawaii and now his high demand ski week is there for exchange for those that have the trade power to do it.

Could Bob had rented his ski week and then paid cash to stay in Hawaii? Sure, but the easier thing for him is the quick and simple exchange.
 

chalee94

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I have been reading a few threads where people were able to stay at extremely nice properties by exchanging their properties with much lower MFs.

It almost feels too good to be true. I understand it doesn't happen consistently. But many people consistently trade into resorts with much higher MF and buy in costs than their own.

I just wonder how this is possible?

More detail from one of those people who trades for nicer properties to limit misunderstandings:

I have a nonbranded timeshare (lower demand) that is for a fixed week at the end of June (higher demand) - also, it is for a less touristy area in NC (low demand) that is under-represented in II for trading (low supply).

So while I have found trades for HHI Marriotts in shoulder season (Sept to mid-Nov), don't assume I am trading for 4th of July - there is still usually a balanced give and take - or as II calls it, "like for like".

Marriott owners get 1st pick and I do have some flexibility on timing - I don't prefer to travel in the summer with the crowds. I also tend to be flexible on location - so if Hawaii trades are pretty limited, I can be open to seeing if there are trades available in St Kitts or St Thomas...

Also, I own DVC so I get certain perks for Disney World and have family near there in FL - so that is a common destination and trading into nicer resorts in Orlando (which is pretty over built with timeshares) is pretty easy with a little advanced planning.

So if you don't have similar flexibility and decide that you only want week 27 in Maui or bust, you might have a very different and more frustrating ownership experience. You really need to do the necessary homework before buying into any timeshare.

To sum up - resort quality is one variable, but the demand for a specific week of the year, relative supply of timeshares in an area and demand for travel to a specific area are also things that play a role in whether you have reasonable expectations of a "like for like" exchange.
 

Ddee555

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I agree with what Charles said (chalee94).

The reason that I have been able to stay at Marriott Newport Coast Villas and similar quality properties with my nonbranded lower maintenance cost timeshare is because I deposit higher demand weeks (California/Hawaii summertime, etc.) and I travel off-season.
 

Eric B

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In addition to what has been said about high cost inventory being due to developer deposits, I believe some of the ability of folks with lower cost TS to trade into higher value units has to do with contractual arrangements between their developers and RCI or II. For example, Vacation Village resorts do a lot of developer deposits with RCI, but some of their resorts do quite well as traders in RCI Points. It can't be due to the low available inventory of the resorts, but instead has to be part of the u deleting arrangements that essentially set up the owner of a points-based unit as a frequent exchanger.
 

bnoble

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Unsolicited advice: Buying a timeshare with the expectation that you'll use it most often for exchanges in RCI, II, or elsewhere is a bad idea. It is a particularly bad idea if you are new to timesharing. Yes, I do it. Yes, I've gotten some great trades. But, doing this well has taken me a ton of time spent reading, learning, and experimenting. It requires flexibility, the ability to plan combined with a willingness to be impulsive, and nerves of steel while waiting for an "important" exchange to happen. Over time, the ability to find arbitrage situations has gotten harder and I expect that trend to continue. In short: it is a recipe for disappointment.

In my opinion, the average person who wants to get involved in this vacation model would be better served buying a mini-system on the secondary market with a variety of resorts that you can imagine visiting over the next 5-7 years at least.
 

KarenP

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To get my great trades, I check II every day, sometimes twice or three times a day for months. I also have the Marriott window and am looking for off season weeks.
 

ski_sierra

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Thanks everyone for all your replies. Things make a lot more sense now. Only successful trades are advertised and nobody brags about the failed attempts. There is a huge element of luck involved.

I only have a 10k Worldmark contract in the transfer process. I have been looking at a few other points systems like HGVC and Vistana that have appealing location to me. All of them combined have locations I'd be happy to visit for next 10 years.

It seems like the more successful approach to exchanging is go where the availability is rather than find availability for where you want to go. The sightings forum is a good way to keep up on what becomes available.
 

silentg

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You can also check the free exchanges on TUG marketplace. We have had several successful exchanges there.
Silentg
 

rickandcindy23

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We have exchanged into the Westin Maui timeshares many times with our traders in the same system (Sheraton Broadway Plantation, mostly). I have been successful in getting inventory in mostly smaller units, but we rarely get a good ocean view, so we bought the ocean view in an ordinary resort. We love it, though. I mean, it's become our home on Maui for 3 weeks. I wanted to be able to sit on the lanai and watch whales.

I consider it to be our best buy price-wise, but our maintenance fees are high for an ordinary timeshare, so we always, always use our weeks. We are approaching the sunset clause on that one. I know the salespeople have been trading people into Sands of Kahana and use the sunset clause as a scare tactic to get owners out at Hono Koa. They have some plans for Hono Koa, and I am sure it will benefit Soleil and Kainoa Properties.

The good thing is now I can get inventory easier for whale season. The bad thing is that Soleil Management can continue to raise our fees because less people own there.
 

bizaro86

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Thanks everyone for all your replies. Things make a lot more sense now. Only successful trades are advertised and nobody brags about the failed attempts. There is a huge element of luck involved.

I only have a 10k Worldmark contract in the transfer process. I have been looking at a few other points systems like HGVC and Vistana that have appealing location to me. All of them combined have locations I'd be happy to visit for next 10 years.

It seems like the more successful approach to exchanging is go where the availability is rather than find availability for where you want to go. The sightings forum is a good way to keep up on what becomes available.

I agree with this assessment. I have fixed vacation times based on my wife's work. We go somewhere very nice that is an up trade over what we trade every single vacation period, and have for years. High demand locations as well (Hawaii, southern California). But I do wide open searches of dozens of places I'd be interested in going in both RCI and II for those weeks.
 

ski_sierra

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I agree with this assessment. I have fixed vacation times based on my wife's work. We go somewhere very nice that is an up trade over what we trade every single vacation period, and have for years. High demand locations as well (Hawaii, southern California). But I do wide open searches of dozens of places I'd be interested in going in both RCI and II for those weeks.

Great to know. This is very different than the traditional way of find a location to go and then find affordable accommodations. Time to build that wishlist of places to go to and let the availability make the decision for you.
 

bizaro86

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Great to know. This is very different than the traditional way of find a location to go and then find affordable accommodations. Time to build that wishlist of places to go to and let the availability make the decision for you.

The sightings forum has a great list of II resort codes from the hotel branded groups. I went through it and filtered for things that did/didn't interest me, and use that list to search. It's a personal thing (ie east coast beaches don't interest me, but FL gulf coast does, places with direct flights from where i live are preferred, etc)
 
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CalGalTraveler

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Agree with prior posters. When people say they traded into top resorts in Maui etc. they have been very flexible with their schedules (i.e. retired/not tied to school schedules) and the trades are typically not available during high season. You also run the possibility of getting the worst room in the resort e.g. a noisy dark parking lot view in Hawaii because traders get what's leftover. Some people are fine with that, and sit by the pool. Others don't want to roll the dice on view, location and season or spend time searching for it.

Some of the developers are limiting arbitrage by putting less desired inventory into the systems. For example Disney now limits their RCI deposits to one bedrooms at SSR resort. You cannot get other resorts or 2 bedrooms anymore. Some are fine with that. YMMV.

You can always put in an OGS in RCI or II for specific properties and dates and if something comes along that is a Hail Mary trade, you can pull the trigger on the exchange. It's like the lottery.

Lightening is nice but doesn't strike twice.

We treat our mini system, and properties as the primary plan. We view the RCI and II trades as a Hail Mary contingency plan that may come along at times and jump on it. Not the other way around. As @bnoble stated this is getting harder and harder, RCI and II are charging more for trades, Resort fees now apply and with MVC buying II, more Marriott, Vistana and Hyatt inventory will be restricted to support selling their high-margin points trust programs.
 
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mdurette

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There is a huge element of luck involved.
.

I would disagree, no luck is involved. TS exchanging is a game - learn the rules, play with effort and you can certainly win. For me....it takes time and effort. But since I work from home most days I can easily have II and RCI running on the computer besides my work laptop to watch and learn what is going on in the exchange world.

I am flexible in the summer - but 100% tied to a school calendar the rest of the year and I trade non branded high demand weeks for branded high demand weeks.

Do I fail sometimes? Absolutely, but not usually.
 

ski_sierra

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I would disagree, no luck is involved. TS exchanging is a game - learn the rules, play with effort and you can certainly win. For me....it takes time and effort. But since I work from home most days I can easily have II and RCI running on the computer besides my work laptop to watch and learn what is going on in the exchange world.

I am flexible in the summer - but 100% tied to a school calendar the rest of the year and I trade non branded high demand weeks for branded high demand weeks.

Do I fail sometimes? Absolutely, but not usually.

It looks like you put in quite a bit of work. I do it for other my other hobbies but not sure I could do that for timeshares. I will settle for good enough (80/20 rule). This was an interesting post from a personal finance blogger that I'm influenced by:
https://thefinancebuff.com/leave-some-money-on-the-table.html
 
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VacationForever

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Not everyone wants to rent out their weeks as there are risks associated with renting. For simplicity many timeshare owners simply deposit their units into RCI or II so that they can have an exchange to a different location/timeshare with the assurance that the exchange is legitimate.

Exchange fees continue to rise much faster than inflation. An exchange in II is now $209 per exchange, with another $99 per size upgrade. Less if it is Marriott-Marriott and Vistana-Vistana. These fees add up quickly. I think RCI is now $249 or more per exchange.
 

bnoble

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I do it for other my other hobbies but not sure I could do that for timeshares.
You have hit upon the essential truth of it. For most of us, this is a hobby. If we actually accounted for the time we spent on it, and valued that time even close to what it was worth, we spend MUCH more on our vacations than we are willing to admit.

But, it *is* fun...at least for me.
 

ski_sierra

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You have hit upon the essential truth of it. For most of us, this is a hobby. If we actually accounted for the time we spent on it, and valued that time even close to what it was worth, we spend MUCH more on our vacations than we are willing to admit.

But, it *is* fun...at least for me.

That's the feeling I had when I started reading about exchanging. I used to book international first and business class tickets using miles. I enjoyed doing the work for a while then got tired of it. Right now my favorite miles are Southwest because so little hassle is involved in booking the flights. I do still like to fly international business but will often use an award booking service as I find the $200 spent worthwhile.
https://frequentmiler.boardingarea.com/award-booking-services/


Is there a similar service available for finding exchanges? Feel free to PM if you know or have had a good/bad experience.
 
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JudiZ

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We own a non-branded, one bedroom (4/4) the second week of July on Cape Cod. MF is $700 +/-. The listed price for rentals in the same unit through the resort is $270 a night during the week and $300 on the weekend nights (about $2100 for the week on their web site). Since I didn't want to do a private rental a few years ago, I turned it back to the resort. They rented three nights, charged me a cleaning fee and I got my MFs less $75. They don't guarantee how many days they can or will rent. It wasn't terrible but it wasn't great either.

Deposited into RCI, I get 32 points and can usually get two bedrooms for two (sometimes even three) weeks in shoulder seasons in Gold and Silver Crown resorts. Yes, it still costs an exchange fee and yes, it takes a lot of planning but, for us, it works. That, of course, is when we don't use it or rent to a friend for MF + $250 (makes us both happy).

I do see trading as a hobby but I liken it to my friends who knit, sew or make jewelry and then sell their wares and, when all is said and done, don't actually make money when their time is figured in. We never bought a place just for trading so I have a skewed view of it as well. Since, in addition to Cape Cod, we have a fixed summer week in NH that we use every year and Wyndham points, we have plenty of vacation options but, really, trading is the most "fun". Different hobbies for all!
 
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