Did we get hosed?

[stucandu]

Hello,
First post for me. I'm posting this on the Buy, Sell and Rent Forum as well as the Mexico Forum.

I read several posts trying to find information that would help me to understand whether I got a decent deal on the recent timeshare that my wife and I purchased from Vida Vacations after a sales presentation at the Mayan Palace in Nuevo Vallarta, Mexico. I figured it would be easier just to ask and initiate some response.
Basically we want to know if we got a decent deal or whether we were totally hoodwinked. Here it is, as best I understand it:

I don't want to divulge the exact price we paid, but after the closing cost of $2,995 and IVA tax of $2,730 our membership total came in at somewhat below $20,000, which includes one registered week, 2 grand vacation weeks, 1 SFX Vida week and an HSI Breakaway week (maybe 5 of these, not sure) each year. This is a 'Red' time classification (all year except Christmas, New Years, Easter and Holy week) and is for a Mayan Palace Regency Suite (1 Bedroom, bathroom, kitchen, living room). Our usage fee is currently $629, which we have to pay for the registered week for the first five years whether we use it or not. The other weeks are electives and we can rent out any weeks we like (apparantly for $1600 or more). We have all Member benefits (the Premium Package?) including 50% off golf green fees. It also includes a 2 year RCI membership and 1 year HSI membership as well as the SFX Vida week.
The membership is for 25 years, renewable up to 100 years.The renewal fee is equal to 6 current usage fees. After 5 years there is a Renovation Fee equal to 2 current usage fees.
I'm still trying to wrap my head around what I've gotten us into on this by reading through the contract, etc. but it's tricky to understand so any input will be helpful.
Thanks

 

[ampaholic]

I simply can't imagine you couldn't buy a (much) cheaper resale unit and trade into this place - but what do I know.

I bought all 7 of my timeshares for under $250 - I have been to many wonderful vacation destinations and I don't expect to spend $20K over the next 10 years of vacationing.

 

[timeos2]

If you are within the 5 (? - hopefully someone can confirm or correct) day rescind period allowed in Mexico - DO IT NOW! You have been hosed to put it gently. No timeshares are worth more than $5000 and most Mexican timeshares today are virtually worthless as in you can have your choice for free or even be paid to take one. Really.

Mexican timeshares in particular have a nasty reputation for delivering far less than you think you purchased. and worse they are easy to obtain through trade or rent at pricing way below what they made you pay.

Get out if you can or you will deeply regret this. Good luck.

 

[falmouth3]

If you can't rescind, learn to use it to your best advantage. If you can still rescind - do it NOW and ask questions later.

 

[stucandu]

Ok, way past the rescind day, so have to make the best of it.
Thing is, I think there's a lot of different ways to determine how much is paid for a timeshare, ie, $250 per timeshare, but what does that include?
I crunched the numbers a bit and the membership, over 25 years , results in a premium of $265 over the usage fee (currently $629) so that the 3 weeks we have cost us about $900/ea. If we rent out 2 of those weeks for $1350/week we recoup $900, which pays for the 1 week that we would regularly want to use each year.
Is this rosey thinking or realistic?

 

[capjak]

Read your documents and see if you can still rescind the deal.

 

[stucandu]

No timeshares are worth more than $5000 and most Mexican timeshares today are virtually worthless as in you can have your choice for free or even be paid to take one.

They initially pitched 3 packages, the lowest priced one was $20,000, then $33,000 and the top one was $45,000 or close to it as memory recalls.
The only difference in the packages was the amount of benefits included.
We got the same benefits as in the top package, (ie 50% off golf rack rate) and the other exchange programs.
Anyway, that was the initial pitch. We weren't going to go for it till they came in with this pitch which basically gave us the top package for less than the lowest price. Seemed too good to pass on and we signed. We knew nothing about timeshares and got taken in on an impulse buy.
As I stated, I think we can still have a good outcome on this as long as we can rent out those extra weeks for a good price, which doesn't seem too unrealistic.
Or is it?

 

[ausman]

As I stated, I think we can still have a good outcome on this as long as we can rent out those extra weeks for a good price, which doesn't seem too unrealistic.
Or is it?

More bad news will be coming.

Many here, myself included have made purchases to be regretted, but have made additional timeshare purchases after. The product is good, just not from some sources.

Putting it in perspective the price paid, is a price of a used car that was bad.

The lesson to be learned is to educate yourself beforehand, applies to timeshares and used cars.

 

[ampaholic]

Ok, way past the rescind day, so have to make the best of it.
Thing is, I think there's a lot of different ways to determine how much is paid for a timeshare, ie, $250 per timeshare, but what does that include?
I crunched the numbers a bit and the membership, over 25 years , results in a premium of $265 over the usage fee (currently $629) so that the 3 weeks we have cost us about $900/ea. If we rent out 2 of those weeks for $1350/week we recoup $900, which pays for the 1 week that we would regularly want to use each year.
Is this rosey thinking or realistic?

I don't know where to start:

I paid less than $250 for all seven - not each. I get between 8 and 15 weeks of vacation per year (depending on specific choices I make) - my mf's are $2450 per year for all seven.

So in 25 years I can expect about 300 weeks of vacation for about 60 grand plus 10 grand (estimated) in exchange fees = 70 grand for 300 weeks of vacation. For the most part I can reserve at any of about 4200 resorts worldwide (subject to availability of course)

It sounds like you are getting 3 weeks per year (max) for $900 each.

So $20,000 purchase plus 45,000 in Mf's over 25 years = 65 grand for 75 weeks of vacation.

That's a lot of very nice time in the sun - just lay back and enjoy

 

[MuranoJo]

The other weeks are electives and we can rent out any weeks we like (apparantly for $1600 or more).

It will be very unlikely you'll be able to rent at that price--that was a typical salesperson's lie. You may get lucky and be able to rent for the maintenance fee. The only exception would be if you happen to have purchased the holiday weeks.

As previously stated, the product is good--but their sales process is another story.

 

[am1]

It will be impossible to rent anywhere close to that amount. Were you staying at the resort? If so how much were you paying for the week?

No one here cares about the exact price you paid. But somewhat below $20k means you did not get hosed for as much as others.

You are best to try to make the most of it like others have said here.

 

[mikenk]

Stucando,

The bad news; you definitely paid too much. Anybody that buys a timeshare anywhere retail is paying too much. Don't beat yourself up over it, many people buy retail based on the promises of the sales people.

The good news; you will have a great time vacationing at the resorts as they are extremely well maintained, continuously improved, and great fun. A few years ago in Cabo, I was talking with a number of folks during happy hour. All had paid retail, knew they paid too much, but didn't care as they were consistently enjoying the resorts.

Here is some other good news: If I read your post correctly, after 5 years, you will not have any mandatory maintenance fees; you will pay only if you use. You will discover that to be a great benefit and unique to the Mayan system. The reason timeshares are so cheap is people want out from under the relentless ongoing maintenance fees whether you use the resort or not; it is generally not the original cost. Make sure that benefit is clearly stated in your contract.

Mike

 

[ronparise]

The very fact that you askd the question "Did we get hosed?" tells me you already know the answer. Otherwise your post would have been titled something like..: "look at this great deal"

 

[stucandu]

Stucando,

If I read your post correctly, after 5 years, you will not have any mandatory maintenance fees; you will pay only if you use. You will discover that to be a great benefit and unique to the Mayan system. The reason timeshares are so cheap is people want out from under the relentless ongoing maintenance fees whether you use the resort or not; it is generally not the original cost. Make sure that benefit is clearly stated in your contract.

Mike

Yes, this is indeed the case, although we do have to pay a renovation fee equal to 2 usage fees (mf's ?) every 5 years (about $1260 @ current rates).
Taking this into account, as well as financing fees, etc. I calculate that the 3 annual weeks cost us $915/ea for a total of $68,625 plus $5200 for reno fees for $73,825.
If we are able to rent out 2 weeks/yr for only the usage fee, that gives us $31,500 and a balance of $42,325, meaning we pay $1693/yr for our one week (42,325/25).
I would put this as the worst cast scenario. I would hope that realistically we can rent the weeks out at $900 to $1200/ea. That doesn't sound unreasonable to me.
At the low end - $900, we would end up paying about $1,200 for our week/yr. At $1200 = $600/yr. And at the $1650 that was pitched us, then our weeks would be free and we'd profit about $7500.
So obviously, the higher we can rent the additional weeks out for, the better off we are.
I guess only time will show us what we'll get, but until then I'm going to hold on to the hope that we can at least get $900/week. Anything less and I would feel that we did get soaked.
Thanks for all the input.

 

[stucandu]

It will be impossible to rent anywhere close to that amount. Were you staying at the resort? If so how much were you paying for the week?

No, we didn't stay at the resort, but we definitely will next year.

Not quite sure why you state that it's impossible. Only time will tell.
In my previous post I stated a range of rentals, with the $900 -$1200/wk being what I think is not unreasonable. Bear in mind that this is a pretty sumptuous resort and includes the 50% golf discount to boot. (They have 5 Nicklaus designed courses on the go, I think 2 are complete.)
As Mikenk noted, this is not a low end, run down resort by any means. I honestly wouldn't be surprised if we can command even higher amounts, but I don't think the range above is unreasonable at all. That's only $150 -$200/night for a pretty posh pad.

 

[Asl18940]

THe prices are so variable for the Vida packages it's very hard to evaluate. Frankly, the resorts are spectacular do I wouldn't stress over this. Your trading value into other resort systems through RCI or SFX (which I prefer) is very high. What you may want to research is how you can use your current membership in the Mayan Palace, which is the lower end of the Vida spectrum, to get into a Grand Mayan or Grand Bliss membership. The next time you're down there, they'll definitely be trying to sell you that. So do some research on redweek or sellmytimesharenow or ebay (though the latter is the least reliable) to get a feel for the pricing, and you may be able to do better next time. The bottomline is that we are members of the Grand Luxxe, and frankly love vacationing at the Vida resorts.

 

[DeniseM]

Not quite sure why you state that it's impossible. Only time will tell.
In my previous post I stated a range of rentals, with the $900 -$1200/wk being what I think is not unreasonable. Bear in mind that this is a pretty sumptuous resort and includes the 50% golf discount to boot. (They have 5 Nicklaus designed courses on the go, I think 2 are complete.)
As Mikenk noted, this is not a low end, run down resort by any means. I honestly wouldn't be surprised if we can command even higher amounts, but I don't think the range above is unreasonable at all. That's only $150 -$200/night for a pretty posh pad.

The reason it is going to be difficult is that the market is flooded with cheap rentals in Mexico, and there is far more supply than demand. Because of various issues in Mexico, many people are afraid or uninterested in traveling there.

Telling the buyer that they can make a profit by renting their new timeshare is a common ploy used by timeshare sales people. They can get people to spend more with this scheme, because they make people believe that it will be a money maker.

 

[stucandu]

I'm sure some of what you say is true. But are the cheap rentals also cheap places? I think you nearly always get what you pay for. I'm not sure how much Mexico's internal problems, which take place far away from most resorts, affect the demand side for higher end units such as this one. It may actually increase due to the security of such places.
Also, there is a very high demand among Mexican Nationals for places during their vacation times, which are usually in the other seasons that Northeners prefer to vacation in. It's not like after March break there's no more demand for places.

 

[DeniseM]

You can get very cheap rentals at the top resorts, because the rental market is so depressed. There is far more supply than demand. When there is more supply than demand, rental prices get lower and lower.

Right here in our classifieds, there are 150 Ads for rentals in Mexico at the top resorts for 1¢ to $700 per week. Yes - starting at 1¢ - that's not a typo. http://tug2.com/timesharemarketplac...roomsMin=&BathroomsMax=&SleepsMin=&SleepsMax=

 

[beach_bumz]

Stucandu - start advertising your units for rent now. List on as many sites as possible (check out the recommended sites here on TUG) and look at what others are charging so you're competitive.

You can advertise on Craigslist too, even Mexico cities on Craigslist.

Word of mouth helps too. We've rented before to friends of friends, friends of family, etc. Much easier than dealing with strangers over the internet.

But get on it ASAP because it's often a long frustrating process of waiting...and waiting....and waiting some more.

Good luck!

FWIW, we LOVE the resorts. Don't own there, but we trade into them pretty regularly through SFX. If nothing else, you will have to stay there 3 weeks a year.

 

[T_R_Oglodyte]

Stucandu - start advertising your units for rent now. List on as many sites as possible (check out the recommended sites here on TUG) and look at what others are charging so you're competitive.

Good advice. If you plan to rent regularly as a way to offset cost, you need to approach it like a business. One of the key items is building a client base of people who want to rent from you and will refer others to you.

From the standpoint of the renter - they have various options that are available to them. Everything else being equal, they will rent from a reliable, known entity instead of some unknown person on the internet. So when you start out you are that unknown renter. and the only way you can generate traffic is by having low rental rates. Often that means taking a loss as you get things set up.

As your operation gets going and you develop reliability you can start to charge more. But note that you will almost always have to be signficanlty cheaper than simply renting from the resort - because the resort will always be more convenient, more well-known, and offer greater flexibility and variety in units and check-in dates. Also the resort will probably be able to offer a cancellation policy that you would not reasonably be able to match.

 

[DeniseM]

Right now, a lot of people are trying to rent their timeshares, so you want to price your week competitively, market it well, and make sure you have a lot of traffic - because you have a lot of competition. I personally use these cheap or free websites to post my Ads:

TUG Timeshare Marketplace - http://tug2.com/timesharemarketplace/
1 year Membership - $15
Ads - free up to 25

www.craigslist.org (free)

www.redweek.com
Membership - $14.99 for 12 months
Timeshare Rental Ads - $24.99/ea for 6 Months
Timeshare Resale Ads - $59.99/ea for 12 Months

www.myresortnetwork.com
Membership - free
Timeshare Rental Ads - $19.95 ($24.95 - floating weeks)
Timeshare Resale Ads - $34.95

There is also a list of resale websites at the top of the Buying, Selling, Renting, board that you may want to take a look at.

On Craigslist, you need to create a Craigslist Acct., and then you can just use the "renew" function, to renew your Ad every 3 days which will bring it to the top of the listings. Eventually (30 days?) your Ad will expire, and then you will have to create a new one.

You are going to have to be brutally honest about what your weeks will rent for. Forget what the sales person said, and forget what the resort is asking. You need to take a hard look at the Comps and price yours at the bottom, if you have any hope of renting.

I have owners tell me all the time that "they think" their timeshare is worth a lot more than the going rate and they just can't bring themselves to lower the price. Then they are sorely disappointed when their timeshare doesn't rent.

 

[glypnirsgirl]

They initially pitched 3 packages, the lowest priced one was $20,000, then $33,000 and the top one was $45,000 or close to it as memory recalls.
The only difference in the packages was the amount of benefits included.
We got the same benefits as in the top package, (ie 50% off golf rack rate) and the other exchange programs.
Anyway, that was the initial pitch. We weren't going to go for it till they came in with this pitch which basically gave us the top package for less than the lowest price. Seemed too good to pass on and we signed. We knew nothing about timeshares and got taken in on an impulse buy.
As I stated, I think we can still have a good outcome on this as long as we can rent out those extra weeks for a good price, which doesn't seem too unrealistic.
Or is it?

Of course you can have a GREAT result from this. Just not as good as it could have been. I have bought from developers twice before learning better. And I am happy with all of my purchases.

elaine

 

[stucandu]

Ok, this is certainly eye opening.
The only weeks I'm obligated to pay for are the 1 registered week for the first 5 years. The other weeks are optional. Thus it doesn't make any sense to me to rent at any less than the usage fee ($629) as I have to pay this amount anyway, so why take a loss.
To make it worthwhile, I think I'd need to get $750 minimum. From the sounds of it, that may not be too easy.
On top of this, I checked the terms and if I want to rent out the weeks, I have to pay the usage fees by Jan.31 of the year I'm renting them. Well this is a nice Catch 22. What if I don't rent them, or for less than the UF? THen I lose, maybe a lot.
I'm not sure how they would know I'm renting them, except I guess when the guest checks in, although we could just say that they are friends that we are loaning the place to. How are they going to prove otherwise?
One other thing is that the sales guy gave us a list of rental agencies: Continental Connections; Resort Rentals; Global Marketing Systems; Custom Vacations Mexico; and Destinations International, who all charge a one time fee ranging from $275 to $399 with Destinations International being the only one that charges a commision as well (10%). Does anyone have any experience dealing with these companies?
Thanks to all for your input, cautions and encouragement. Wish I'd known you before signing, but it's spilt milk now.

 

[Cheryl20772]

I'm not sure how they would know I'm renting them, except I guess when the guest checks in, although we could just say that they are friends that we are loaning the place to. How are they going to prove otherwise?

This is a detail not to be ignored. If you are not personally staying in the unit, the resort may require a guest certificate, which may (or may not) have a fee attached. They will most likely require guests to show photo ID when registering; so they do know who is staying there.