Fun Timeshare vacation cost calculator

[tombo]

This site has a calculator to compute annual vacation costs if you finance a timeshare for 10 years and it includes MF's plus exchange company annual fees. It assumes a 5% increase on MF's each year which is lower than most resorts have experienced lately (many of the high dollar resorts have been having 10% or more in annual MF increases). The calculator also does not have anyway to input future assessments which makes the computed figure low if there is an assessment in the next 10 years. This is a great thing to do before you purchase to put the initial investment and future costs in perspective.

http://www.theownersadvocate.com/toacalc2.php

If you aren't financing, take an educated guess what your payment would be for 10 years based on the purchase price ($15,000 for 10 years at 10% is $198) because you are using capital that could have been invested elsewhere. This calculator will work best with high dollar timeshares because if you bought your week for $500 to $1000 you are basically just factoring in the annual MF's plus inflation.

A $15000 timeshare financed 10 years at 10% with annual MF's of $995 translates into a cost of $3919 a year for lodging alone (no annual II/RCI fees or exchange fees for traveling to resorts other than the home resort were figured in this example). That means that you will be paying about $4000 a year for 10 years to vacation in a resort you could probably rent for about $2000 to $2500 a year. After 10 years you will probably have to pay over $2000 in MF's a year using a more realistic 8% to 10% in annual MF increases.

Is it worth buying and owning over renting? Play with the calculator and decide for yourself. For a high dollar purchase of $10,000 or more it doesn't appear to be a bargain to be an owner at most resorts IMO.

 

[dwsupt]

Not bad

Since I bought resell for a few dollars, I used 0 for the mortgage. I input the MFs and even with the exchange fees, etc. I can't stay in a nice 2 bedroom hotel with a kitchen for $1200 a year!

 

[TUGBrian]

well thats interesting...ive have someone working on making that exact thing on TUG for a few months now.

its been an advice article in an excel spreadsheet for years and years

http://www.tug2.net/advice/Timeshare_Ownership_Cost_Comparison.xls

 

[tombo]

well thats interesting...ive have someone working on making that exact thing on TUG for a few months now.

its been an advice article in an excel spreadsheet for years and years

http://www.tug2.net/advice/Timeshare_Ownership_Cost_Comparison.xls

Your model is fun to play with too and adds in "the what if I sell in 10 years factor", but both can be a little depressing. Some of my best "deals" don't look quite as good when I plug in realistic resale figures and bargain rental prices I find on TUG, Redweek, Myresortnetwork, etc (using cheap rental prices at my resort to plug in just like I would look for if I was actually renting) . If you play with these models using REALISTIC figures then it might open a lot of eyes. If you plug in the highest resale prices you can find and the highest rental rates, you can stick your head in the sand and say I got a great deal. It is kind of like cheating on your diet or exercise program, the only person you are fooling is yourself.

Before I purchased any week resale (never purchase retail) I would play with these charts to get an idea of the long term deal I am buying. Some weeks with high MF's that can be rented on Redweek etc for prices close to the annual MF's don't work even when plugging in a sale price of zero and annual MF increases of 8% to 10%. Better to know before you buy than after.

 

[bnoble]

I'm continually amazed at how otherwise smart people don't understand that money has time-value. Thanks for pointing this out, tombo! A good reminder for all.

 

[Vacation Dude]

Your model is fun to play with too and adds in "the what if I sell in 10 years factor", but both can be a little depressing.

Before I purchased any week resale (never purchase retail)

The online calculator is pretty simplistic and anyone should be able to do the math in their head or simple calculator.

It is a little alarmist and should also compare the cost to a hotel stay or gallon of gas, or bread, etc.

Also, many people are happy buying directly from the developer as they get good deals or benefits vs buying resale. It is rare to see someone buy DVC retail. Also, most people buy Marriott direct (even thought resale offers a better deal IMHO).

Instead of taking such a firm stance on resale (and ROFR) Tombo should be more flexible and state the the consumer should evaluate all the choices and try to make an intelligent purchase decision after evaluating all the variables. There are times when a customer is happy they bought direct from the developer and that the resort has ROFR.

 

[ultraswan]

well thats interesting...ive have someone working on making that exact thing on TUG for a few months now.

its been an advice article in an excel spreadsheet for years and years

http://www.tug2.net/advice/Timeshare_Ownership_Cost_Comparison.xls

Brian,

I like your version very much -- would love to see that in action.

What the simple calculator doesn't account for is the current price to stay at the same resort (the one you're putting $$ info into the calculator for), and yours does.

While you can "assume" that its "probably" cheaper to stay at the same location paying straight dollars, that is vague and often innacurate. When chosing my tss, I went out to their websites to see what the regular rate for stay/rental was and it was consistently higher (sometimes twice as much) for a week's stay than my yearly mx fees. Since I paid next to nothing for the tss in resale, the purchase price doesn't come into play for me.

Value of ts vs. straight pay is a location by location basis that isn't taken into account in the simple calculator.

That (among other benefits of owning a timeshare--some of which can't have a dollar amount assigned) is a critical point in comparing the "worth" of a timeshare.

 

[tombo]

The online calculator is pretty simplistic and anyone should be able to do the math in their head or simple calculator.

It is a little alarmist and should also compare the cost to a hotel stay or gallon of gas, or bread, etc.

Also, many people are happy buying directly from the developer as they get good deals or benefits vs buying resale. It is rare to see someone buy DVC retail. Also, most people buy Marriott direct (even thought resale offers a better deal IMHO).

Instead of taking such a firm stance on resale (and ROFR) Tombo should be more flexible and state the the consumer should evaluate all the choices and try to make an intelligent purchase decision after evaluating all the variables. There are times when a customer is happy they bought direct from the developer and that the resort has ROFR.

I didn't name any resorts or tell people that they made bad choices. I said plug in your figures and see what the results are. As defensive as you got I can only assume that your figures didn't pan out too well. I told the TUGGERs to plug in figures before buying resale to see if it is a good deal or not. If it isn't a good deal resale at 50% or less the retail price, it couldn't possibly be a good deal retail.

If you plug in any Marriott with developer prices and current Redweek rental rates, virtually none will show that they are worth more to own than to rent. Please list the developer prices, annual MF's of any Marriott, figure 8% annual MF increase (almost every Marriott has been closer to 10% in the last few years), at least a 50% loss resale (a generous percentage because most can be purchased for a lot less than half the retail price), and what you feel a fair rental price is so we can plug it in and find a deal purchasing from the developer. As you said it is simplistic and people should be able to do it in their heads, yet they still buy from the developer when the numbers don't work. In addition no one knows the percentage for sure, but the majority of buyers finance making a developer purchase an even worse deal. Even if you don't finance the cost of loss of use of your money has value.

As I said pick the resort, list the developer prices, current MF's, plug in 8% annual MF increase, plug in a reasonable rental rate, and plug in at least 50% loss on the resale price. Using the calculator and realistic figures, I challenge you to find ANY Marriott developer purchase which computes as better to own than rent. Yes this is a challenge. I am saying that there are a lot of Marriott resorts and I am asking you to show just one that will prove it is a good deal to buy from the developer over renting. If somehow you can find one (which I doubt), I will show you a whole lot more that won't.

By the way, no one suggested inputing the cost of a hotel stay, we are talking about what you can actually stay in the Marriott resort renting from an owner on TUG, Redweek, or myresortnetwork. Don't pick New years or 4th of July because we all now that 98% of the owners will not get those weeks because of demand or because they were sold as Platinum plus or fixed weeks at many Marriott resorts. Please look for bargain rental prices to plug in. Surely NO ONE would be dumb enough to not shop for the cheapest rental price available if they were personally looking to rent a week using their own money and they knew that the owner rental web sites existed (TUG, Redweek, Myresortnetwork,VRBO, etc). If you know of someone who wants to find the highest price rental listings on the web to book their personal vacations, please send them my way because boy do I have some weeks to rent them.

As far as Marriott using ROFR to create a floor price and prop up prices, how's that been working for you lately? Oh yeah, when owners need the magical ROFR the most, Marriott isn't using it at all because they don't want any more of their own inventory at any price.

 

[tombo]

Brian,

I like your version very much -- would love to see that in action.

What the simple calculator doesn't account for is the current price to stay at the same resort (the one you're putting $$ info into the calculator for), and yours does.

While you can "assume" that its "probably" cheaper to stay at the same location paying straight dollars, that is vague and often innacurate. When chosing my tss, I went out to their websites to see what the regular rate for stay/rental was and it was consistently higher (sometimes twice as much) for a week's stay than my yearly mx fees. Since I paid next to nothing for the tss in resale, the purchase price doesn't come into play for me.

Value of ts vs. straight pay is a location by location basis that isn't taken into account in the simple calculator.

That (among other benefits of owning a timeshare--some of which can't have a dollar amount assigned) is a critical point in comparing the "worth" of a timeshare.

When comparing rental rates, don't go to the resort's web page because they have the highest rates. If you were actually personally renting I would assume that you would look for the best rental prices you could find. Typically the best rental prices can be found listed by owners on TUG, Myresortnetwork.com, Redweek.com, craig's list, VRBO etc. These are the prices you can actually stay at your resort for by renting as a non owner at the resort (even lower rental prices can be obtained sometimes if you negotiate with the owner). Use these sites to compare rental listings available AT YOUR RESORT. When you are plugging in numbers, plug in REALISTIC LOW PRICE numbers that you can find to stay in your resort during the actual time frame you like to vacation.

When talking about comparing owning on a location by location basis, renters simply pick where they want to go each year. They don't have to deposit a week hoping to find availability where they want to travel like owners do. Renters just rent where they want when they want. As an owner you need to factor in exchange fees for when you want to vacation somehwere other than your home resort . If you are renting you simply find a good price at ANY quality resort you like, at the location you want, in the time frame you want to travel, and you have no exchange fees or II/RC membership fees. You also NEVER have assessments as a renter. As an owner any year you can be assessed and you will be required to pay it. These are costs of ownership not factored in to the computations.

Another advantage of renting that doesn't have a specific dollar value is being able to travel last minute. To get the best weeks as an owner you have to book far in advance, or you are tied to a particular fixed week each and every year. A renter can start looking a month or two before they want to travel and pick the best available resort, price, and/or location. They can see what the dollar is doing against the euro or peso to make their deciscion. Last minute rentals are typically cheaper. It is a lot easier to know what your work life or personal life will be like a month or two ahead of your trip than it is to know a year or more in advance. Renters have a lot more flexibility on locations and dates than owners do because owners often have to lock in their travel dates a year or longer in advance. Because renters can rent wherever they want, the whole world of resorts is available forthem each and every year, not just where or when their week will pull a trade.

Also not factored in is if you won a company trip, had a job loss, family emergency, or for whatever reason you simply decided not to vacation one year. If you don't want to go one year you would have zero expenses as a renter. On the other hand, you are obligated to pay MF's whether you actually vacation or not as an owner. Yes you might be able rent your unwanted week to someone, but as many on TUG's last minute rentals have found, that is not always going to happen.

I own many weeks personally, so I am not saying that owning is bad. What I am saying is that if you research and crunch some numbers, owning isn't always good.

 

[Vacation Dude]

As defensive as you got I can only assume that your figures didn't pan out too well.

Wrong again.

I bought most of my timeshares resale and a few from the developer. I have sold several over the years and made a nice profit on 100% of my timeshares that I bought, enjoyed, and then sold. I occasionally rent a week or so, but really don't enjoy the hassle of renting.

I am not defending Marriott or any other company, they are the only one I put in my CP, but I own others, I just don't toot my own horn or bash anyone for buying from a developer or bash any timeshare with ROFR, like someone else does.

I also never finance any purchase, especially a timeshare. If I can't afford to pay cash, I don't buy it and that goes for my cars and homes. I am quite happy being debt-free. Timeshares represent a small portion of my travel portfolio and I really enjoy the value of a nice timeshare week.

ASSuming Marriott or any timeshare annual dues will increase at a rate of 8-10% is still an assumption.

I actually like the concept of renting timeshares from owners as this takes out the hassle and uncertainty of trading. I have not rented from an owner, but think this may actually make much more sense than owning. I am currently in the process of selling a Marriott for a significant profit as the contract have been signed, deposit made, but awaiting full payment.

 

[tombo]

The online calculator is pretty simplistic and anyone should be able to do the math in their head or simple calculator.

I posted a timeshare calculator to begin this thread. Then Brian posted his version. I said that this was fun and informational. Out of the blue you make the above statement that anyone should be able to do the math in their head inferring that one is not too bright if they need the programs myself and Brian listed. Well as I said it is a fun thing to do and I like Brian's version too. Apparently you feel that I started this thread for no reason of value to anyone who has a brain or a calculator. I guess that Brian wasted all of his time and effort putting together a version of his own timeshare value calculator too because it is unecessary for all but the simpletons. Hmmm, who might be bashing here?

Instead of taking such a firm stance on resale (and ROFR) Tombo should be more flexible and state the the consumer should evaluate all the choices and try to make an intelligent purchase decision after evaluating all the variables.

I began the post by telling people to enter their figures so they could evaluate their choices using real data and those pesky calculators that no one with any intelligence should need.From the figures I used playing with the calculators, no timeshares that were high dollar purchases gave a better to buy than rent result. I stated my observations and anyone was free to enter their own figures and results to show how some high dollar resorts could be better to own than rent. Since you said sometimes it was good to buy from the developer, I challenged you to show ONE example using the remedial calculator allowing those of us who rode the short bus to understand the advantages. I am still waiting for you to show a single Marriott anywhere that would calculate to be more valuable to own than rent on either timeshare value calculator using Marriott Developer prices.

I feel that no one should ever buy from a developer and I dislike ROFR so I have the right to post my feelings. Why do I need to take a softer stance or be more flexible just because you disagree? It is my opinion. You aren't going to change my mind unless you give some empirical facts to show the advantage of buying from the developer. Saying that some people are glad that they purchased from the developer is like saying some people pay sticker price for a car and are happy. The fact is that you can buy a car cheaper than sticker price and you can buy a timeshare resale cheaper than you can buy it from a developer. Why not get the best deal that you can? Facts is Facts.

ASSuming Marriott or any timeshare annual dues will increase at a rate of 8-10% is still an assumption...

It is an assumption based on the MF increases over the last few years which have been double digit at most Marriott's. When one predicts future rate increases they usually base the estimates on past rate increases. Should I have used 30% annual increases when they have been increasing at about 10% a year? That would make no sense. It also would make no sense to use annual MF increases of 3% when they have been averaging 10%. Using an 8% annual increase based on double digit increases of the last few years was actually a conservative estimate.

I am not defending Marriott or any other company, they are the only one I put in my CP, but I own others, I just don't toot my own horn or bash anyone for buying from a developer or bash any timeshare with ROFR, like someone else does..

You don't toot your own horn or bash anyone....like someone else does? This sure sounds like bashing to me. Actually it sounds like you are bashing me. I started a post here about timeshare calculators and fun. You started dissecting my non confrontational posts and interjecting your feelings about my statements. Re-read and see who started the bashing on this thread.

 

[csalter2]

How Do You Calculate Multiple Vacations

If one uses their timeshare to its fullest for accommodations, timeshare should beat out renting with both resale and developer bought properties over time. I have own a Marriott property and it is a lock off. I can get 2 vacations out of it plus an AC which is extremely cheap. So what about those other 2 vacations I get that the renter will need to pay for but I get an additional week totally free and a much cheaper AC.

I also am a member of DRI. I own lots of points that affords me the opportunity to use half the points 59 days or less. Renters don't have that luxury.

As an owner you have a little more flexibility. I believe I get more for my money if I use it right. So I can get triple the vacations that a renter gets with my Marriott and with my points from DRI, I can have four months of vacation depending on how I want to use my points. I won't spend anywhere near what a renter would pay and I would be in a great location in Hawaii or Florida. It's how you use it that can make it more cost effective than renting. As I get closer to retirement, I know I will be vacationing a whole lot more in retirement and have started to see that timesharing will be a lot less costly than renting as I will have more flexibility of my time and with no kids I will go from using a 2 bedroom to a one bedroom or studio.

Those calcultors cannot account for that.

 

[tombo]

If one uses their timeshare to its fullest for accommodations, timeshare should beat out renting with both resale and developer bought properties over time. I have own a Marriott property and it is a lock off. I can get 2 vacations out of it plus an AC which is extremely cheap. So what about those other 2 vacations I get that the renter will need to pay for but I get an additional week totally free and a much cheaper AC.

I also am a member of DRI. I own lots of points that affords me the opportunity to use half the points 59 days or less. Renters don't have that luxury.

As an owner you have a little more flexibility. I believe I get more for my money if I use it right. So I can get triple the vacations that a renter gets with my Marriott and with my points from DRI, I can have four months of vacation depending on how I want to use my points. I won't spend anywhere near what a renter would pay and I would be in a great location in Hawaii or Florida. It's how you use it that can make it more cost effective than renting. As I get closer to retirement, I know I will be vacationing a whole lot more in retirement and have started to see that timesharing will be a lot less costly than renting as I will have more flexibility of my time and with no kids I will go from using a 2 bedroom to a one bedroom or studio.

Those calcultors cannot account for that.

Plug in the numbers and see. I am going to use the prime week of 4th of July for reference. You can rent studios at Ko'olina for about $1000 a week ($1000 currently for July 3rd through 10th) and one bed rooms units for about $1300 a week ($1288 for July 4th-July 11th) on redweek. So plug in $2300 for a week into the calculator because that is what you can rent two separate weeks as a non owner for prime 4th of July weeks. Two weeks can be rented for about the same price as a 2 bed room 2 bath for one week, around $2000 (2 bed 2 bath ocean view 7-04 to 7-11 currently for rent for $1800). For your annual maintenance fees you get a 2 bed 2 bath, or a studio and a one bed one bath. As a renter you have the option rent two weeks in a one bed rooms for more room for both weeks which is an option you don't get as an owner. You can also rent two weeks in a studio. You can rent one week on Oahu and one on Maui with no exchange fees.

MF's are over $1500. Purchase price is let's say $30,000. Use $400 a night for rental for a total of $2800 for the week (keep in mind you can actually rent a 2 bed 2 bath 4th of july ocean view for $1800 and 2 weeks, one in a studio and one in a one bed for a total of $2300). Say that the resale price is $15,000. Use 8% annual MF increase and a 3% investment rate. The results say that it is cheaper to rent by $7284 than it costs to be an owner. The deficit could be worse because this chart doesn't take into account the fact there there will probably be assessments for refurbishments in the next 10 years either.

Like I said in the outset, some of my weeks didn't pass the test when I plugged in the numbers. I felt that all of my weeks were saving me money over renting. I currently own over 20 weeks at 14 different resorts. I bought all of them resale. Some of them worked becase my MF's were a lot lower than any rental weeks on Redweek etc at my resort could be found. Some didn't work because I could rent from an owner each year by looking for bargains for only slightly more than I had to pay in annual MF's as an owner myself. For example I plugged in a $1000 purchase that I said would be worth $500 resale. My MF's are $550 a week and I can rent some weeks on redweek for $100 a night ($700 a week). Sure there were some weeks for rent at my resort on web sites for $1200 or more, but I said realistically what would I rent if I was an owner, and of course the answer was the cheapest I could find so I plugged in figures for a $700 week. I just knew this was a good deal. I only paid $1000 for it and my MF's were only $550 a year for a 2 bed room. Plugging in the numbers it shows that I would be better off renting to the tune of a negative $458. That is not even factoring in the possibility that I could get a $500 or $1000 assessment in the next 10 years.

If TUGGERS look at how cheaply they can really rent weeks for at their resorts from other owners and plug in those real numbers, some timeshares will show to be worth more to own than rent, but many will come to the result that it is better to rent than own. I was surpised at some of my results. Try it yourself and see how your resorts come out.

P.S. I have been using Brian's calculator instead of the one I posted because it takes into account more variables and gives a better overall picture IMO.

 

[TamaraQT]

Since I bought resell for a few dollars, I used 0 for the mortgage. I input the MFs and even with the exchange fees, etc. I can't stay in a nice 2 bedroom hotel with a kitchen for $1200 a year!

I also bought resale and used 0 for the mortgage. Provided that my purchase goes thru I got $1256 a year...and I have a 3bedroom 3bath.....I am doing a happy dance with you!! :whoopie:

 

[Sou13]

20 weeks on vacation?

How does anyone manage to vacation 20 weeks out of 52? Especially if you're not vacationing at your home resort!

I can see how owners who paid $1.00 on eBay wouldn't mind high MFs and Special Assessments. It still might be worth it if you get a good week to trade.

In my case, after nearly a quarter of a century of timeshare ownership, I'd like to be rid of it. It's more trouble than it's worth IMO.

 

[littlestar]

Thanks! I plugged in our DVC cost and our maintenance fees and we're actually making out pretty good compared to cash prices.

 

[Vacation Dude]

If TUGGERS look at how cheaply they can really rent weeks for at their resorts from other owners and plug in those real numbers, some timeshares will show to be worth more to own than rent, but many will come to the result that it is better to rent than own. I was surpised at some of my results. Try it yourself and see how your resorts come out.

ok, I fully agree with you on that one.

I generally don't need fancy calculators as I don't finance any purchase and don't care about future increases in annual dues (as there will also be an equal increase in rental rates).

For me, it is simply annual dues divided by 7 nights. Forget lost opportunity costs as bank accounts now pay less than 1% and you still have to pay 35% on that windfall.

One thing that rarely gets mentioned is the transaction costs to buy and sell a timeshare (even if it is cheap).

 

[csalter2]

Plug in the numbers and see. I am going to use the prime week of 4th of July for reference. You can rent studios at Ko'olina for about $1000 a week ($1000 currently for July 3rd through 10th) and one bed rooms units for about $1300 a week ($1288 for July 4th-July 11th) on redweek. So plug in $2300 for a week into the calculator because that is what you can rent two separate weeks as a non owner for prime 4th of July weeks. Two weeks can be rented for about the same price as a 2 bed room 2 bath for one week, around $2000 (2 bed 2 bath ocean view 7-04 to 7-11 currently for rent for $1800). For your annual maintenance fees you get a 2 bed 2 bath, or a studio and a one bed one bath. As a renter you have the option rent two weeks in a one bed rooms for more room for both weeks which is an option you don't get as an owner. You can also rent two weeks in a studio. You can rent one week on Oahu and one on Maui with no exchange fees.

MF's are over $1500. Purchase price is let's say $30,000. Use $400 a night for rental for a total of $2800 for the week (keep in mind you can actually rent a 2 bed 2 bath 4th of july ocean view for $1800 and 2 weeks, one in a studio and one in a one bed for a total of $2300). Say that the resale price is $15,000. Use 8% annual MF increase and a 3% investment rate. The results say that it is cheaper to rent by $7284 than it costs to be an owner. The deficit could be worse because this chart doesn't take into account the fact there there will probably be assessments for refurbishments in the next 10 years either.

Like I said in the outset, some of my weeks didn't pass the test when I plugged in the numbers. I felt that all of my weeks were saving me money over renting. I currently own over 20 weeks at 14 different resorts. I bought all of them resale. Some of them worked becase my MF's were a lot lower than any rental weeks on Redweek etc at my resort could be found. Some didn't work because I could rent from an owner each year by looking for bargains for only slightly more than I had to pay in annual MF's as an owner myself. For example I plugged in a $1000 purchase that I said would be worth $500 resale. My MF's are $550 a week and I can rent some weeks on redweek for $100 a night ($700 a week). Sure there were some weeks for rent at my resort on web sites for $1200 or more, but I said realistically what would I rent if I was an owner, and of course the answer was the cheapest I could find so I plugged in figures for a $700 week. I just knew this was a good deal. I only paid $1000 for it and my MF's were only $550 a year for a 2 bed room. Plugging in the numbers it shows that I would be better off renting to the tune of a negative $458. That is not even factoring in the possibility that I could get a $500 or $1000 assessment in the next 10 years.

If TUGGERS look at how cheaply they can really rent weeks for at their resorts from other owners and plug in those real numbers, some timeshares will show to be worth more to own than rent, but many will come to the result that it is better to rent than own. I was surpised at some of my results. Try it yourself and see how your resorts come out.

P.S. I have been using Brian's calculator instead of the one I posted because it takes into account more variables and gives a better overall picture IMO.

Tombo,

I can see where you are with the rooms. Have you done a similar comparison with points systems? It seems to me that points systems with their reduction within 59 days at half rate gives owners a great advantage. For example, I can get a Marriott Ocean Pointe 2 bdrm at 8500 points which is the equivalent of $884.00 in maintenance fees for DRI. Within the 59 days I could get it for 4250 points which is $442.00. In that case, the owner comes out better. (Maintenance fees are .104/pt) The maintenance fees for Ocean Pointe 2 bdrm owners is either $1622 or $1817 depending on if your an original owner or not. For a points person like me, with DRI that is a bargain especially if I get it within 59 days. Plus this is through DRI and there is no exchange fee. (For the record, there are many Marriotts that are available. There are ski season openings in Vail and Utah and other great places through DRI. I will be at the Newport Coast in September using points.) My original point though is that there is substantial savings that cannot be calculated so cleanly here. Does this make any sense?

 

[tombo]

Tombo,

I can see where you are with the rooms. Have you done a similar comparison with points systems? It seems to me that points systems with their reduction within 59 days at half rate gives owners a great advantage. For example, I can get a Marriott Ocean Pointe 2 bdrm at 8500 points which is the equivalent of $884.00 in maintenance fees for DRI. Within the 59 days I could get it for 4250 points which is $442.00. In that case, the owner comes out better. (Maintenance fees are .104/pt) The maintenance fees for Ocean Pointe 2 bdrm owners is either $1622 or $1817 depending on if your an original owner or not. For a points person like me, with DRI that is a bargain especially if I get it within 59 days. Plus this is through DRI and there is no exchange fee. (For the record, there are many Marriotts that are available. There are ski season openings in Vail and Utah and other great places through DRI. I will be at the Newport Coast in September using points.) My original point though is that there is substantial savings that cannot be calculated so cleanly here. Does this make any sense?

Sure intangibles are valuable. If you look at it purely as a purchase or rent proposition, the numbers are black and white. If you take into account things like wanting the same week every year rather than any bargain week in that general time frame, owning has a value not associated with dollars and cents. You might have made friends at your resort and owning assures that you are there the same time as your friends every year. You might own a fixed week or be able to reserve a week at an event like Jazzfest every year as an owner. As a renter some years you could be out of luck and not be able to find accomodations at your special event for any price. Thus owning might be better in this situation no matter what the calculator says.

If you have friends that own at a resort like Marriott, and you want to travel together every year, owning gives you the advantage of reserving when you want to travel in floating resorts using the owner's early reservation advantage. If you are renting, you might find the week before, or the week after your friends are traveling, which wouldn't work for you at any price. If on the other hand you want to spend a week in July at Ko'Olina every year, renting appears to be cheaper than owning.

With regards to points, that is above my pay grade. I don't have a clue how to work the ins and outs of the points system and couldn't compare anything with regards to the value of points ownership versus renting. Take the ball and run with it. I am sure it will get points owners thinking too.

 

[tombo]

ok, I fully agree with you on that one.

One thing that rarely gets mentioned is the transaction costs to buy and sell a timeshare (even if it is cheap).

Thanks for the agreement.

I fully agree with you on your point about high transaction costs too as I have fallen victim to this myself. An auction is close to ending with a current high bid of $199 and I am thinking that $205 would be a steal for that resort/week. I win the bid at $205 and I am so happy that I stold this week. The sellers contact me and want a check for $1404 ($205 for the auction, $499 for the closing costs, and $700 for the current years MF's). Some resorts in Mexico and other places have a resort transfer fee that can total in the $1000's. I looked at an auction where the winning bid was $1, but the buyer owed over $4000 when you added in the closing costs, MF's, and resort transfer fees.


If you buy a floating week, often by the time the week is deeded to you there is no way you will get a prime week during the purchase year because all of the current owners will have already reserved them. Depending on the resort and their rules, you might not only be too late to reserve a good week for the current year, you might be too late to reserve a good week for the next year (many resorts allow owners to reserve 12 months or further in advance). So you could be paying one or even 2 years worth of MF's for years that you won't even have the opportunity to reserve a good week that you would actually use yourself.

If you go to sell that week you purchased for $205 and ended up spending $1404 for, you would lose money selling it for $505. If you sell it for $505 and make the buyer pay the closing costs, then you have sold the week for $300 more than you bought it for. If it is late in the year and they don't want the week or you have already banked it, you will eat the $700 MF's. You paid $1404, sold it for $505, you lost $900 (actually you paid $900 to stay there for a week). If they reimburse you for the MF's, they paid you $505 plus $700 (giving the buyer the use of the current week) for a total of $1205. You still lost $199 even though you technically sold it for $300 more than you paid for it, and you never even got to stay at the resort.

Transaction costs are a big expense that is often overlooked but shouldn't be. Great point Dude!

 

[m61376]

Interesting post. What confuses me is comparing 10 years versus 20 years, with the former indicating a good purchase decision and the latter a loss. Playing around after seeing that I realized why, which may show a flaw in the calculator. I entered a 10% annual MF increase, but kept the 3% rate of inflation. The problem (as I see it) is that the rental rates inputted will increase corresponding to the rate of inflation. However, I think (although I could be wrong) that rental rates will tend to follow similar numbers as MF's increase, since they both reflect costs specific to the property. Since over time the difference between 3% and 10% really adds up, especially over 20 years the likely true increase in rental rates isn't being reflected. If the increase in MF's outpace the increase in rental costs, then any timeshare would be a runaway train wreck. I know I have read some posts that MF's and hotel room rates showed similar increases; if this is the case, then I think the calculator has to be adjusted so as to reflect commensurate increases between rental rates and MF's- unless, of course, the consensus is that MF's will increase much more rapidly than hotel/rental rates.

Another point which this doesn't consider is that, just like buying a timeshare removes the principal from getting any investment income, some of that principal is eroded by paying for rentals. The calculator assumes a loss in investment income for the purchase money, but if I had to take money out of the bank to pay for a rental I'd lose that investment income as well; any rental fee which exceeds the annual MF's represents additional money that I'd be removing from earning interest regardless. I am not sure if that can even be quantified, but I would think that it should be a consideration.

 

[JMAESD84]

One thing that rarely gets mentioned is the transaction costs to buy and sell a timeshare (even if it is cheap).

If your a value conscious (cheap) like me, these costs are the main sunken costs of the acquisition. My transaction fees on the purchase side average 150% of purchase price. They are not to be ignored and those Mayan transfers fees kill any thoughts of ever owning there.

Selling?? What's that? Ok, I have sold one. I need to improve my flipping abilities.

I haven't looked at the calculator but from the discussion in this thread I'm sure that it over simplies the value issue of ownership. This is especially true if you're an enterprising chap that owns many and is constantly learning and wringing value out of ownerships.

Also, owning and renting are not mutually exclusive. If I can't get the exchange I want, I'll rent out what I'm not using and rent what I want from someone else.