Considering first purchase - please comment!

[Sarah'sDad]

When my wife and I attended our first timeshare presentations three decades ago, the fixed-location, fixed-week product was too inflexible and too expensive for us to consider. Last month, we visited the Marriott Ka'anapali on a discount package in exchange for sitting through the sales pitch. Obviously not interested in buying on the day, but I've been seriously researching since then.

Background: We have a disabled adult daughter whose medical condition has resulted in us restricting our travels to nice condo-style units in locations with top-notch emergency medical care (English-speaking) within a comfortable flight time from our Southern California home. We have now booked our sixth trip to Hawaii over a six-year period - looks like it's going to be a regular thing! Our favorite stays have been in Ko Olina, where we have rented three-bedroom units at the Ko Olina Beach Villas twice, next door to the Marriott Ko Olina. The large units are big enough to include our other daughter, son-in-law, and grandson, or invite another couple, and the occasional availability of an ADA room is a real bonus. Works great for us. The next trip is to the MKO so that we can understand what the rooms are like and experience the resort first-hand.

Assuming that visit goes well, we are likely to attempt a purchase on the resale market. We would be looking at a deeded ('legacy') floating annual week (1-50) in a 3-bed 'ocean view' unit at the Marriott Ko Olina. The supply of 3-bed units is much smaller than 2-bed units at that resort. However, I think that the 3-bed makes much more sense for us for two key reasons. As noted, it suits our usage needs. But as I see it, the maintenance fees are a much better deal on the 3-bed, which I will explain below.

Purchase financial analysis: In my opinion, the most straightforward way to think about the timeshare purchase we're considering is that we would be paying upfront for the permanent right to purchase an annual stay at a discount. Our last rental at the KOBV was about $7,200 total for a week; I think we would be hard-pressed to rent a similar 3-bed at MKO for less than $8,000 or $9,000. With the maintenance fees on a MKO 3-bed currently ~$3,700, our annual cash outlay (after the initial purchase) would be a good $4,000 less than renting, and I think that the benefit would grow slowly over time. For the purchase, we would aim for the lowest price that we think will clear Marriott's ROFR. Currently, there are a couple of listings in the $25,000 to $30,000 range. Assuming that we get $0 when we want to sell, we would need to use/rent it annually for maybe 7-8 years to break even. If we can get $10,000 when we want out (next paragraph) our break-even period reduces to 5-6 years. That seems to be a reasonable risk for us.

Exiting: From what I've seen, this seems to be a very popular resort. A resale at full market price would probably take some time (a year? I can't tell). However, if we want out more quickly, I would ask Marriott to make an offer. My guess is that they would come up with a net offer (after commissions and fees) of $5,000 to $10,000. It can't be true that Marriott would exercise on the ROFR at, say, $20,000, but unwilling to offer half that for a straight purchase. If that's our downside, I think we'd be fine.

Risks:

• Scheduling - we would have a 12-month booking window, while owners booking 2 weeks get a 13-month window. A booking 2-3 weeks earlier or later than we're targeting would be fine. But if it's likely to be much greater than that, it would be a concern. Thoughts?
• Lack of flexibility - Yup, it's not a points deal, so it's far less flexible. However, it's also cheaper, as maintenance fees are materially less. We could exchange through II, but I'm sure that would be a big downgrade - not really an interesting option. If we want to go somewhere else, we'll just rent and also use our MKO week somehow. Most likely, we would rent out the week if we can't use it, probably netting a couple of thousand dollars more than our maintenance fees.

Looking forward to any comments from the community. Thanks for reading such a long post!

 

[jp10558]

So you want this specifically for Hawaii and that specific resort? The reason I ask is "everyone" has TS somewhere in Hawaii, so Marriott is "probably" the most expensive. That said, fixed week fixed unit is for sure the simplest / easiest thing to do and you're right on getting out being easy in that case. I think you're probably wrong that a TS company would ROFR something but refuse to make an offer to take it back - that certainly does happen sometimes. I don't get the logic either. I also personally wouldn't bet on renting it out if you can't use it - simply because of the complexities in doing that - there's tax, there's other tax, there's dealing with the wider public to rent from you, etc etc etc. Doing that would IMHO more than make up for just about any other hassle lol. For me anyway.

Anyway, I would actually suggest comparing out side Marriott to make sure you're getting the best thing for you. For instance, you could potentially do a different system where you find out if you can book what you want during wide availability and so pay much less up front and in MFs, as well as only use points for a 3rd bedroom (either as a bigger unit that year or as another 1BR near you or whatever) when you need it and either save the points for a year to increase the lenght of stay or use elsewhere in the system for another trip... HGVC or Wyndham would be my cross checks - their points systems are "included in resale" in a way that MVC isn't. But then doing that does add some complexity, though I wonder if it's any more than dealing with renting (if you've been renting from owners) and the potential issues there.

 

[Sarah'sDad]

So you want this specifically for Hawaii and that specific resort? The reason I ask is "everyone" has TS somewhere in Hawaii, so Marriott is "probably" the most expensive. That said, fixed week fixed unit is for sure the simplest / easiest thing to do and you're right on getting out being easy in that case. I think you're probably wrong that a TS company would ROFR something but refuse to make an offer to take it back - that certainly does happen sometimes. I don't get the logic either. I also personally wouldn't bet on renting it out if you can't use it - simply because of the complexities in doing that - there's tax, there's other tax, there's dealing with the wider public to rent from you, etc etc etc. Doing that would IMHO more than make up for just about any other hassle lol. For me anyway.

Anyway, I would actually suggest comparing out side Marriott to make sure you're getting the best thing for you. For instance, you could potentially do a different system where you find out if you can book what you want during wide availability and so pay much less up front and in MFs, as well as only use points for a 3rd bedroom (either as a bigger unit that year or as another 1BR near you or whatever) when you need it and either save the points for a year to increase the lenght of stay or use elsewhere in the system for another trip... HGVC or Wyndham would be my cross checks - their points systems are "included in resale" in a way that MVC isn't. But then doing that does add some complexity, though I wonder if it's any more than dealing with renting (if you've been renting from owners) and the potential issues there.

Thank you! I will check out what the other (non-Marriott) systems offer on Oahu. Best!