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How would you calculate the value of timeshares

dioxide45

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This is a complicated thing not specific to timeshares. Many ... (not assets but ...) property? things? have near 0 or below 0 sales value, but certainly have a utility value and some have sentimental value.

But lets look at utility - I have a 99% working Singer Quantum Stylist 9600 sewing machine. If it was stolen, it'd cost me something to replace. Alternatives like paying a tailor or seamstress or friend to do basic sewing would also cost me. Doing without and just more frequently buying new clothes has a cost. IDK what an insurance company would rate that loss as, but that might be a useful starting point.

Similarily, I have an old, somewhat broken down but still functional Bosch 800 series dishwasher. Any replacement is going to be a few hundreds of dollars, another Bosch 800 is going to be over $2,000 last I checked. I doubt anyone would buy it off me, but I still use it at least once a day...

Again, I kind of feel like insurance has the closest generic "loss" calculations, but they're not public.

So, there's a value based on what someone would pay you for a thing, there's a value based on alternate solutions, and there's value based on if you can do without entirely. For instance, very few people get any instrumental value from stocks. It doesn't let them run the company, it doesn't get them anything. So the only value is what they can sell it on for. But trying to apply that sort of valuation to other things doesn't work so well IMO - even a second house has a bunch of what I'm calling instrumental value to people - a place to store things, a back up if something happens to your current house, a place you can rent out, etc. Only if you're running a business flipping houses does it make sense to consider like a stock.

So much of this thought process to TS is IMHO a mismatch of analysis. I don't think any vacation is ever generically a revenue generating event for the vacation goer. [Technically if you're making money as a reviewer, influencer, youtuber whatever - then it's no longer a vacation, but a work trip in a sense.]

I'm currently in Vacation Village Weston - what is the value of 75 degree weather for 2 more weeks vs snow and sleet and 20s in upstate NY? Obviously pretty high for me... I'd guess plenty of people would pay *something* to get out of the snow for a while, and that's what all the resorts bank on and are actually selling in some sense.

Various ramblings aside - most people I've talked to (on this forum, but also IRL who aren't into TSs) consider valuing TS as what similar accommodations in a similar location at a similar time of year would cost. I.e. Myrtle Beach area, so Surfside is "close enough", same number of bed rooms, same month of the year. More generically, I guess roughly a 30 mile radius. The other aspect is the exchange membership for the cash stays - Many many people are sold per the forum, but plenty of people IRL are also impressed with the 2nd tier but still nice for quite cheap locations in RCI Extra Vacations / Last Calls. You could pick up a Triennial that has yearly MFs around $250 just to get access to multiple units at Massanutten or Smuggs, or in Florida etc at $600ish a week in a 2BR. The actual unit is never used or thought about, or you do actually plan it every 3 years, but you certainly aren't valuing it highly. IDK what a standalone RCI membership is, but I tend to subtract ~$100 a year from the various costs for HGVC for the included RCI membership.

I don't know how you generalize anything much more specific though - I know nothing about weighted matrixes etc. I think the what should I buy forum threads basically tell you how to value for a specific person, and that's about as good as it gets. It's like valuing a college degree - it depends on you and your goals.
But these all still ignore the supply/demand side of value. A certain timeshare might have usage value to me, but there might be five others for every me that sees no value in it. That then reduces the effective resale value to zero. Why would I pay $500 (my value) for a timeshare when five people are willing to give it away for $0?
 

easyrider

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Sounds more like co-ownership of a vacation home or collection of them. Not a terrible concept but dependent on a rising real estate market. I’ve seen a few companies running those sorts of things. Not resorts, though.

I've been involved in vacation rentals. It was a 10 year commitment for an Ocean front home. It was a decent investment. Another opportunity that I declined was 20 acres near Cour d'Alene. The plan was to build vacation homes but that didn't happen and at the time I was happy to not be involved. Then Cour d'Alene experienced rapid growth and the property was rezoned so those involved made out really well.

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The simple answer regarding the valuation of a timeshare interest is, no. There is no specific method of appraising timeshare interests even though it is considered a real property in most states. Therefore, timeshare units are not appraised and a traditional bank will not lend money for buying a timeshare or let you borrow against it. Whether you are buying a deeded timeshare interest or a membership in a vacation club (a points-based program), you are buying the right to use a timeshare unit and all the amenities of a timeshare resort during your use period. Generally speaking, if you purchased a timeshare interest for $40K, you will be lucky to sell it for 8K in the secondary market. However, there are exceptions to this rule; high-end timeshare interests at desirable resorts may command higher prices in the secondary market due to higher demand. For example, timeshare units at a Disney resort and those that are located at ski resorts will hold their value in the secondary or resale market. Anyone interested in owning a timeshare should consider getting one for free through companies that offer them to the general public. However, keep in mind that there may be other costs and fees that will have to be paid at the time of transfer of ownership unless they are paid by the prior owner.
 

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But these all still ignore the supply/demand side of value. A certain timeshare might have usage value to me, but there might be five others for every me that sees no value in it. That then reduces the effective resale value to zero. Why would I pay $500 (my value) for a timeshare when five people are willing to give it away for $0?
That's certainly true. My whole point was resale value can be 0 while there's obviously value to owners. Resale value is not always the right analysis IMO.
 

jp10558

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But these all still ignore the supply/demand side of value. A certain timeshare might have usage value to me, but there might be five others for every me that sees no value in it. That then reduces the effective resale value to zero. Why would I pay $500 (my value) for a timeshare when five people are willing to give it away for $0?
That's certainly true. My whole point was resale value can be 0 while there's obviously value to owners. Resale value is not always the right analysis IMO.
 

dioxide45

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That's certainly true. My whole point was resale value can be 0 while there's obviously value to owners. Resale value is not always the right analysis IMO.
But what kind of valuation was the OP looking for if it wasn't resale value?
 

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Beauty is in the eye of the beholder. I am changing up almost everything that we own currently. If only some timeshares that are great traders were worth $0 cost to someone else. Free closing, too.

I would love to give a few away and have tried for a year to give one away that is inexpensive fees, a great trader in II for DVC, and pulls Marriott resorts in Orlando. I don't need all of these weeks, and that is the point in giving it away. I have Marriott that is more logical for trading purposes.
 

jp10558

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But what kind of valuation was the OP looking for if it wasn't resale value?
I'd say it's unclear - look at
Even in a case where there is a glut, if your MF is significantly below rent rates, the unit has value
What does resale have to do with this - if there is a glut and resale is $0, what is the value they're talking about here then? Of course - this doesn't mean in many situations that you could rent it so either the OP is confused, or I was reading this as the value to an owner of staying somewhere for "significantly below rent rates". If it was able to consistently be rented, I'd expect the resale value wouldn't be $0 or even that close to it. People have / do made a business out of the renting.

I think there may be a "formula" of "pay up to this amount" but I kind of think that's still mostly divorced from what a seller could expect to get. This is again where the reason someone is buying something and intended use inform it.
 

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I am purchasing 2 weeks at Newport Coast Villas in the gold season. I just heard today we passed the RFOR even though the sale price was low. I understand that Marriott runs low on funding this late in the year for buying back weeks. I also do not have 2025 usage which may be a factor.
 

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I've gone down the rabbit hole of this fascinating site. When we were using our fractional interest regularly, we calculated the value in the same way we would do a "rent vs own comparison" in buying any other real estate. Now that we don't use it as much, I am looking at it more as a "rent out vs invest the money elsewhere" calculation (I know, just another name for rent vs own, but the iteration captures my altered mindset). Note that the "invest money elsewhere" calculation is dependent on what the market-clearing price is for our fractional ownership, which, frankly, we assumed to be 0 when we purchased, but after today's reading, I am curious to see if there actually is any resale value. I will scope all of this out over the next year and report back. Who knew this cottage industry world of experts was so readily available. I have been on here all day (again, I went down the rabbit hole) and have made a list of youtube creators I need to check out plus a slew of metrics I have questions about, plus a number of other topics that merit further research. A bit exhausting, so I'm not sure I'll be back, but I definitely have perceived a community here with many knowledgeable contributors, so thank you for that!
 

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Maybe back off the coffee...
 

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You guys are simply amazing. Thank you for all the responses. Firstly let me admit that my point of reference and TS currency is RCI Points but, of course the most valuable TS's are never traded, because they fit the owner so well there is no trade involved. However, to the original point, I have to agree with those that feel that each system would require different metrics also within each system, the weight of the inputs would need to be flexible.
 

pedro47

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I have no way of knowing, but I can't help believing that people buying timeshares at developer prices, from professional timeshare sellers, do so without having any idea that a secondary market exists (eBay, TUG, RedWeek, etc.) where pretty much the same thing as a full-price timeshare is available close to free if not totally free.

We found out by chance while driving back to our dinky motel after saying No Thanks at a high-pressure timeshare sales presentation. We caught sight of a roadside billboard advertising timeshare resales. The rest is history.

Much later, after thinking about some of the things the timeshare sellers said across those little tables in a timeshare presentation salesroom, I recalled that part of the sales pitch included telling us that owning a timeshare is owning valuable deeded real estate which can be used, rented out, lent to family members, exchanged, bequeathed to heirs, or sold.

Sold ?

Well, If people can sell their own timeshares, that means other people can buy them, right?

Yes -- right.

But other than letting it slip that timeshares are property that can be (re)sold, the timeshare sellers pretty much keep mum about that aspect of the timeshare world. They have to keep it a secret, otherwise it's hard to believe that anyone would ever buy a timeshare from a developer.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​
I liked it.
 

pedro47

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Calculating the value of a timeshare is no different than calculating the value of any other asset. The value is simply what a buyer is willing to pay for it.
A timeshare is not an asset. IMHO… If a timeshare was liked any other asset. Why is a timeshare that was sold by a developer for over forty thousands dollars is now selling for just $1.00 dollar.
 

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Calculating the value of a timeshare is no different than calculating the value of any other asset. The value is simply what a buyer is willing to pay for it.
The timeshare resale market is incredibly inefficient and often irrational. This statement is true in a vacuum, but effectively meaningless in real life.
 

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The timeshare resale market is incredibly inefficient and often irrational. This statement is true in a vacuum, but effectively meaningless in real life.
It really isn't any different than the meme stocks. Using traditional methods many of those stocks are worthless. Yet their market cap is billions of dollars.
 

gravityrules

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There is a post here on TUG of an ARDA report that states the average TS rental rate is $235/night. That would be a weekly rate of $1645.


While an average like this is of limited use in talking about the value or desirability of a specific property and time, it does help clarify the TS industry challenge. I suspect if we averaged our weekly equivalent MFs here on TUG it would be higher than $1645.
 

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It really isn't any different than the meme stocks. Using traditional methods many of those stocks are worthless. Yet their market cap is billions of dollars.
The market for meme stocks is irrational, but it's at least efficient. The market for timeshares is neither rational nor efficient. You can't look at the days trading charts and know that when you put your timeshare up for sale it will get you $x.
 

dioxide45

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The market for meme stocks is irrational, but it's at least efficient. The market for timeshares is neither rational nor efficient. You can't look at the days trading charts and know that when you put your timeshare up for sale it will get you $x.
Still, the value of anything at any given time is what a buyer and seller agree on. Not sure that it matters if it is a rational or efficient market or not. It doesn't even seem that the OP was looking to determine the value between buyer and seller but rather the value of a timeshare to the owner in how they can use it.
 

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Still, the value of anything at any given time is what a buyer and seller agree on.
Oh, I agree with you there. I just meant if you're trying to figure out what you can sell your timeshare for before you actually have a buyer for it, the potential numbers are going to be all over the place (although most will be $0).

As far as the value based on use? Every single one of my Wyndham timeshares is "worthless" because I bought them for less than closing costs. But yeah, they certainly have value to me.
 

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After looking over all of the information needed for my proposed formula, I know most would not go through the hassle of collecting all of that so I'll also try to come up with either a shortcut or a formula that uses less input.
A formula would be amazing, but not sure how you could compare the hundreds of different types by plugging information. It would be great to see. Please keep us informed.
 

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I've concluded that establishing value is not a useful exercise, it's like some have said value is in the eye of the beholder.
 
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