Buying a HGVC for points

[wgallen8]

I am making offers on some properties in Las Vegas, just wondering if I purchase 2 smaller point packages of say 3400 at the same property, do I have 2 maintenance fees or is it better to buy a 7,000 point package with one fee. The other question is the maintenance fees based on the number of points say 3500 = 500 fee 7,000 = 1,000 fee. Thanks

 

[onenotesamba]

I'm in a similar position. I've spent a lot of time crunching the numbers (for myself), and generally speaking, the best "sweet spot" between points and membership fees is a 7000 point contract at Vegas Strip or Paradise, followed by Flamingo and then some of the lower-fee Orlando properties.

If you're looking for more than 7000 points, it might make sense to buy two 4800 point weeks. There are 8400 point and higher contracts that have low membership fees in Vegas, but it seems that they don't come on the market very frequently, and when they do, the asking prices are pretty high. If you can get a good price on two 4800 point units, at properties with low membership fees, you can get 9600 points, and the two membership fees combined aren't that much higher (or might be lower) than a single deed point package in Hawaii, where higher-point weeks on a single deed are easier to find --but you have to really crunch the numbers and find a really good deal.

I'd stay away from the gold week one bedrooms, though--for the same membership fee, you can get a 4800 point package at the same property.

 

[onenotesamba]

Oh, and I should add that two different point packages means two different membership fees. Fees (and point packages) differ based on the size of the unit, the season (gold or platinum) and the home resort location.

There's a lot of good information on this board, and I'd encourage you to spend a lot of time familiarizing yourself with the ins-and-outs. I've been lurking and asking the occasional question for the past several months, before I decided to jump at my first attempt to buy into HGVC. I feel much better about the decisions I'm making because of all of the helpful advice that others on this board have given me. It's a great community, and I'm very grateful for their help. You should definitely take advantage of the expertise of others around here.

 

[Cyberc]

I am making offers on some properties in Las Vegas, just wondering if I purchase 2 smaller point packages of say 3400 at the same property, do I have 2 maintenance fees or is it better to buy a 7,000 point package with one fee. The other question is the maintenance fees based on the number of points say 3500 = 500 fee 7,000 = 1,000 fee. Thanks

Welcome to Tug.

First you need to find out how many points you need per year. How many family members do you travel together? And what time a year and how frequently do you plan to travel and for how long?

7000points is normally a 2br in the best season (platinum) where 3400 points is a 1br in the next best season (gold)

4800 points is a 1br in the platinum season.

The points listed is for 1 week each. You have the option to do shorter getaways and spend less points doing so.

If you can travel off season then your points will get you longer. A 2br in gold season is 5000 points.

The mf you pay depends of the size not the season. So all 1br pays the same and it does not matter if it's gold or platinum(or silver for that sake)

If you plan to buy 7000 points you should buy a 2br in platinum season and not buy 2 x 1br 3400 in gold season. The mf for the 2br will be lower than the 2 x 1br.

Regards

 

[semicycler]

I'm in a similar position. I've spent a lot of time crunching the numbers (for myself), and generally speaking, the best "sweet spot" between points and membership fees is a 7000 point contract at Vegas Strip or Paradise, followed by Flamingo and then some of the lower-fee Orlando properties.

If you're looking for more than 7000 points, it might make sense to buy two 4800 point weeks. There are 8400 point and higher contracts that have low membership fees in Vegas, but it seems that they don't come on the market very frequently, and when they do, the asking prices are pretty high. If you can get a good price on two 4800 point units, at properties with low membership fees, you can get 9600 points, and the two membership fees combined aren't that much higher (or might be lower) than a single deed point package in Hawaii, where higher-point weeks on a single deed are easier to find --but you have to really crunch the numbers and find a really good deal.

I'd stay away from the gold week one bedrooms, though--for the same membership fee, you can get a 4800 point package at the same property.

Yes for the lowest MF and highest points I've found the sweet spot is 2 BR platinum. But there is the buy in price to consider. I haven't check market prices but at one time platinums were roughly $1/point. So a 7000 pt package was $7000 buy in with really low MF per point. This is the best long term purchase of 10 years plus IMO.

But if you plan to hold for say 7 years or less, getting a few real cheap 1bd golds, silvers, EOY's, or other less desirable properties adding up to 7000 pts might make more sense. Some of these you can get for free, just pay closing costs. Your MF will be higher overall but your buy in costs much less than the $7K comparison above. The trick is to figure out when it makes more sense to go this alternate route - only if you plan to hold for a medium to shorter period of time. If you get them for closing costs only you can plan to quit claim them at the end instead of selling to figure out your costs. Then if you do sell them for anything it's bonus money.

 

[Jason245]

It doesn't sound like you know enough to be making any type of offers yet.

You might even be better off with a system other than HGVC.

I would go here first and answer those questions.

http://tugbbs.com/forums/showthread.php?t=208742

 

[JSparling]

This (basically) same question was asked and answered here:

http://tugbbs.com/forums/showthread.php?t=234865

 

[Jason245]

This (basically) same question was asked and answered here:

http://tugbbs.com/forums/showthread.php?t=234865

I asked them... they never answer them.

 

[onenotesamba]

I didn't realize you were waiting for a response from me, Jason. But I did re-consider the questions you asked, and I also had an off-line exchange with JSperling where he graciously shared his spreadsheet and other info.

I feel like I've got a better sense of what I want to do, and where I landed on that is pretty much what I posted in my initial reply to the OP on this thread.

Wasn't intending to ignore you. I just thought you were suggesting questions that I should be asking myself, rather than looking for a specific response.

 

[Jason245]

I didn't realize you were waiting for a response from me, Jason. But I did re-consider the questions you asked, and I also had an off-line exchange with JSperling where he graciously shared his spreadsheet and other info.

I feel like I've got a better sense of what I want to do, and where I landed on that is pretty much what I posted in my initial reply to the OP on this thread.

Wasn't intending to ignore you. I just thought you were suggesting questions that I should be asking myself, rather than looking for a specific response.

Sorry.. to many threads confuse me. I know my opinion isn't the most popular here, but this whole race to the bottom on the cost per point thing using some 10 year rational takes a massive leap of faith. For example, the cost of the 24000 point package mf went up 30 percent (from 10 cents a point to 13 cents a point ) in I think 2 to 3 years. It is next to impossible to know what the situation at a resort will be in 5 years let alone 10 (look at club interwest being bought and the other big hotel companies selling off their TS biz).

I would instead focus on platinum point packages of highest room level that had the points you needed to use (need not want). Ensure that you will always borrow points (so you arnt throwing money away on rescue fees).

The ultimate goal of a TS is to save you money (cash flow) on an annual basis as compared to rental. IN ALL CIRCUMSTANCES, if you buy resale you are saving at least 20 to 30k right off the bat, and your points are getting you a room that would cost more to rent (even if you pay 25 to 30 cents a point in mf).

I would suggest putting that savings in a separate account and every year using it to pay for rental cars or plane tickets and stop focusing on chasing down the blue light special. There will always be someone who gets a better deal, the question is what is the right deal for your needs and your financial situation.



Sent from my SAMSUNG-SM-N910A using Tapatalk

 

[JSparling]

I would instead focus on platinum point packages of highest room level that had the points you needed to use (need not want).

I agree with this and always have. The argument I've made with the "lowest cost per point over 10 years" analysis is AFTER YOU'VE DECIDED HOW MANY POINTS YOU NEED then find those points at the lowest current cost per point.

I don't know why you keep throwing out the "you never know what will happen to your MF tomorrow" point because, again, we all agree with that fact. You never know. But I do know today that the MF's for 7,000 points at Resort A are 25% cheaper for the same 7,000 points at Resort B. Why on earth would you buy at Resort B?

It goes without saying that the only constant is change. And you'd be stupid to buy 100,000 points if you only need 10,000. Let's get past all the tangents and just go with common sense and 2 conclusions:

1) Decide how points you need.
2) Buy them for as cheap as you can (which needs to take into account your purchase price and the MF's you expect to pay over time).

You're only screwing yourself if you buy at Resort B because you can save $1,000 on the purchase price but ignore the FACT that you'll be paying $350 more per year in MF's (at least on day 1) over Resort A because today that's the actual MF cost.

 

[JSparling]

Which would you buy if you've decided you need 7,000 points per year and you plan on using this timeshare for 15+ years because your kids are very young:

Resort A - 2BR platinum - all-in purchase/close/activation cost $5,000, current MF $1,000, reserves for resort appear sufficient, resort is not one you can drive to from home.

or

Resort B - 2BR platinum - all-in purchase/close/activation cost $3,500, current MF $1,300, reserves for resort appear sufficient, resort is not one you can drive to from home.

I'd go with A because after 5 years I will have paid the same total cost (in today's dollars). But then in years 6 - 15 and on I will incur less cost than if I'd bought B.

Jason will argue that you don't know what the MF's will be next year. And that's true. But I don't know what else to consider. History is an indicator of what will happen in the future. Resort B already has much higher MF's. I'd put my money on Resort B always having higher MF's. Since you don't know for sure what will happen to MF's over 10 years you have to have some type of formula. So the one I've gone with is straight-lining the costs for 10 years and going with the lowest. I guess we can reconvene in 10 years and see who "won".

 

[Jason245]

I agree with this and always have. The argument I've made with the "lowest cost per point over 10 years" analysis is AFTER YOU'VE DECIDED HOW MANY POINTS YOU NEED then find those points at the lowest current cost per point.

I don't know why you keep throwing out the "you never know what will happen to your MF tomorrow" point because, again, we all agree with that fact. You never know. But I do know today that the MF's for 7,000 points at Resort A are 25% cheaper for the same 7,000 points at Resort B. Why on earth would you buy at Resort B?

It goes without saying that the only constant is change. And you'd be stupid to buy 100,000 points if you only need 10,000. Let's get past all the tangents and just go with common sense and 2 conclusions:

1) Decide how points you need.
2) Buy them for as cheap as you can (which needs to take into account your purchase price and the MF's you expect to pay over time).

You're only screwing yourself if you buy at Resort B because you can save $1,000 on the purchase price but ignore the FACT that you'll be paying $350 more per year in MF's (at least on day 1) over Resort A because today that's the actual MF cost.

We are talking 4k not 1k in purchase price difference.

The answer to why is very simple. . Cash flow analysis not accrual accounting. ANY PURCHASE that requires a 10 year minimum break even point is a BAD purchase.

This is why CFL lights are a better deal than led lights, why Walmart stores are designed to break even within 2 years, why amazon battaries make more sense than Duracell, why people buy 2 year old used cars instead of brand new (even though repairs for first two years will be more than buying new)....

Cash flow is king in life. . And large outflows without the assurance of it ever being recoverable are bad uses of capital. And while you are amortizing it over 10 years, the cash impact was fully felt in year 1.. every year after it is meaningless everywhere except on paper.

Sent from my SAMSUNG-SM-N910A using Tapatalk

 

[Jason245]

Which would you buy if you've decided you need 7,000 points per year and you plan on using this timeshare for 15+ years because your kids are very young:

Resort A - 2BR platinum - all-in purchase/close/activation cost $5,000, current MF $1,000, reserves for resort appear sufficient, resort is not one you can drive to from home.

or

Resort B - 2BR platinum - all-in purchase/close/activation cost $3,500, current MF $1,300, reserves for resort appear sufficient, resort is not one you can drive to from home.

I'd go with A because after 5 years I will have paid the same total cost (in today's dollars). But then in years 6 - 15 and on I will incur less cost than if I'd bought B.

Jason will argue that you don't know what the MF's will be next year. And that's true. But I don't know what else to consider. History is an indicator of what will happen in the future. Resort B already has much higher MF's. I'd put my money on Resort B always having higher MF's. Since you don't know for sure what will happen to MF's over 10 years you have to have some type of formula. So the one I've gone with is straight-lining the costs for 10 years and going with the lowest. I guess we can reconvene in 10 years and see who "won".

Last I checked, 2BR 7k points packages can be had ~1-1.5k on ebay at a resort that has MF of about 350/year more than the ones that would cost ~6-7k all in.

everyone buying resale is a winner, for me the idea of seeing 7k walk out the door (and potentially never walk back in) is not something I could accept, especially when my normal lodging expenses would run 2-4k/year.

This whole amortize your cost over how long you will have timeshare was first introduced to me by a developer presentation where they tried to prove that after 30 years I would come out ahead (or some nonsense like that) and so it was a good long term "investment". It is a strategy like accrual accounting with the big difference being that in business, you get to take the expense over those 30 years . In the individual circimstance, where 7k would equal a significant amount of a families annual income (Median income in USA is ~50k, meaning that 7k would equal more than 10 percent)

I am a winner every year I spend less than I would have spent on lodging. For example, my lodging costs were about $1k less this year then they would have been if I didn't have the TS. Not a massive number but that is 1k I get to keep in my pocket and spend on other things.


While it is true that you can "optimize" your savings by spending more upfront, one should never forget that the goal and objective of a TS is to save money. For that family earning 50k/year, saving 1k/year for nothing makes a lot more sense then spending over 10 percent of annual income to save 1300/year.

 

[Duanerice]

Great discussions - thanks. My wife and I were just talking about this. When we first bought in we bought a Gold 1 bedroom, 3400 points. We paid less than $1,500 all in so we were happy.

If I had know what I know I'd probably get at least a 4800 or higher for the same MF. We might even sell this one and get more points, we'll see.

I did go to an owners meeting yesterday at Elara and they said they'd pay me $11k for my current one bedroom. To make it easy on all of us I told them I don't want any more points. Much cheaper to sell and rebuy. Once he saw we bought on the secondary market the discussion was over quick.

Thanks all
Duane

 

[ontilt]

7000points is normally a 2br in the best season (platinum) where 3400 points is a 1br in the next best season (gold)

4800 points is a 1br in the platinum season.

The points listed is for 1 week each. You have the option to do shorter getaways and spend less points doing so.

If you can travel off season then your points will get you longer. A 2br in gold season is 5000 points.

The mf you pay depends of the size not the season. So all 1br pays the same and it does not matter if it's gold or platinum(or silver for that sake)

If you plan to buy 7000 points you should buy a 2br in platinum season and not buy 2 x 1br 3400 in gold season. The mf for the 2br will be lower than the 2 x 1br.

Regards

I recently purchased at Bay Club and am happy with the points and season I purchased. I picked it because of the higher point value and knew that we'd be happy with it as a home resort. More recently, I have started researching buying add'l points for some trips at other non-home resorts.

I had a question about buying points vs. season and if the season really matters. If the add'l purchase for points is just to have the ability to book more stays, does the season matter? Obviously, reducing the transfer fees and one-time purchase fees is optimal, but in terms of the points to MF ratio, is there another reason to consider a specific season? I suppose there must be some benefit if one were to leverage the exchanges or want to book a home week stay, but are there are other considerations?

Thanks,
h