Looking to add points

[mrbigolwillee]

Hi everyone! I've just joined TUG and wish I had known about y'all three years ago. We bought a 1bd in Elara with 3500 pts a year about in 2013. Now we are almost paid off and our family has added two more kids since. So we have three kids under 5 and are already running out of space.
So my first question is; is eBay really a safe place to buy more points? Obviously the prices are way better than buying through HGVC.
Is it better to sell my Elara share and start over or to just add a new share and get the points? We paid 20k and got all the bonus points and stuff with it. I suppose that when we buy a new share we will have to pay extra taxes and fees every year too.
We've managed to use all of our points every year and now have started understanding the a few good ways to save points from year to year. But as our children grow we won't be able to continue going to places in the off season. Overall we've been really happy with our purchase, even knowing that we could have saved several grand. I guess that part of the learning curve...
I'm glad that I discovered this forum. Thanks for your help and advice!



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[Uscjusto]

Glad to know you aren't dwelling on the original (high) purchase price you paid to the developer. I'm in the same boat as you and purchased at Elara from HGVC for $10k.
You got to know the system and have enjoyed using it since your purchase, that's awesome.

If you can buy re-sale at Elara then your points can be combined and you'll only be paying one maintenance fee. If you buy re-sale elsewhere and keep Elara then you'll have to pay 2 maintenance fees.
Do you know how many points you would like to have ideally for your family?

I'm not sure how much you can get from a buyer if you want to put your current HGVC on the market. I asked Judy and Seth and both said I can get around $1k, and that wasn't worth it for me to sell at the moment.

eBay is risky, but I think you can find good deals if you do your homework and due diligence. TUG marketplace is another good place to look for re-sales. I haven't bought re-sale yet, so I can't tell you any personal experience.

 

[buzglyd]

I'm not so sure if USC is correct about combining points of an Elara resale and having only one maintenance fee.

If you buy resale you'll have a second deed in addition to your original purchase. That's two maintenance fees.

My first purchase was a Waikoloa 7000 point from Seth.

My second was a 6200 point Seapointe. Seapointe allows me day use since I live nearby and gets me into GPX's system also.

I'm not sure where you live but maybe find an affiliate that has some kind of day use or is drivable. Then you get more points and extra use.

 

[fernow]

Many (Most?) of us have made the mistake and purchased from the developer before purchasing another unit resale. As I have said before, someone has to buy from the developer for there to be a resale market. Glad to be of service.

Don't think you can combine your developer purchased deed with at resale deed to pay one maintenance fee. Can only do that via developer purchased upgrade, I believe.

You will pay only one club dues fee however.

When you purchase more points, remember that it is the maintenance fee that matters most NOT cost per "point". Nobody wants points, we want nights of lodging and that cost, considered over 10 or 15 years is really driven by the maintenance fee. Run a spreadsheet yourself and you will see.

You are probably around $0.22 maintenance fee per point currently. I have seen deals at as low as $0.11.

Using 10 year amortization of purchase cost, each $0.01 of maintenance fee per point = $0.12 of purchase price per point. A package at $1.20 per point and $0.11 maintenance fee per point is better then a "free" package at $0.22 maintenance fee per point!

(let the debate begin)

 

[Jason245]

Many (Most?) of us have made the mistake and purchased from the developer before purchasing another unit resale. As I have said before, someone has to buy from the developer for there to be a resale market. Glad to be of service.

Don't think you can combine your developer purchased deed with at resale deed to pay one maintenance fee. Can only do that via developer purchased upgrade, I believe.

You will pay only one club dues fee however.

When you purchase more points, remember that it is the maintenance fee that matters most NOT cost per "point". Nobody wants points, we want nights of lodging and that cost, considered over 10 or 15 years is really driven by the maintenance fee. Run a spreadsheet yourself and you will see.

You are probably around $0.22 maintenance fee per point currently. I have seen deals at as low as $0.11.

Using 10 year amortization of purchase cost, each $0.01 of maintenance fee per point = $0.12 of purchase price per point. A package at $1.20 per point and $0.11 maintenance fee per point is better then a "free" package at $0.22 maintenance fee per point!

(let the debate begin)

I will as always interject and state that if it takes 10 years to break even it is a bad cash flow decision. . This amortization over 10 years has no reality except in one's head. Instead one should compare mf to rental cost and see how much they are saving that way. Especially if they would have traveled to those destinations anyway.

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[JSparling]

Especially if they would have traveled to those destinations anyway.

Hey! We agree!

I equate owning with HGVC as "heavily discounted, prepaid vacations" that are a decent decision for people who are going to travel anyway. If your family takes a trip each year to Hawaii or Disney or somewhere else and you can pay $1,400 in MF for your 2-bedroom (really nice) condo then you're really paying about $200/night (plus some fraction of your acquisition cost over x number of years). And that's a great rate over what you could get booking direct through Hilton. However, if you don't have the cash and you have to finance a purchase at 15% or if you're going to let your points go to waste then it may not be a prudent decision.

 

[JSparling]

If you can buy re-sale at Elara then your points can be combined and you'll only be paying one maintenance fee.

Not true.

If you purchase multiple weeks and have the same names/ownership structure on your title then you only pay one annual club dues. But not one MF.

 

[fernow]

I will as always interject and state that if it takes 10 years to break even it is a bad cash flow decision. . This amortization over 10 years has no reality except in one's head. Instead one should compare mf to rental cost and see how much they are saving that way. Especially if they would have traveled to those destinations anyway.

S

How much do you pay per night of lodging in a HGVC unit?

The purchase is a "capital cost". The maintenance fee is an ongoing cost. Those costs together divided by the number of nights you can stay using your points = cost per night of lodging.

Capital costs must be amortized to determine their impact on the cost of the night of lodging. Simple accounting.

IF you want to pretend that your first night at HGVC cost you $20,000 +mfee and after that it was just the maintenance fee / nights of stay, then use 1 day as your amortization. 10 - 15 yrs is more realistic as an accounting principle (and not in my head).

How much I saved compared to buying from the developer is not relevant when deciding between two resale offers. Both are better then the developer purchase but one resale is better then the other. How will we decide?

IF one resale costs $1.00 per point and is $0.11 mfee/pt and another is offered at $0.75 per point but $0.22 mfee/pt, which of those is the better deal? Which gives you the lowest cost per night of lodging over oh, let's say ...10 years?

 

[mrbigolwillee]

Hey! We agree!



I equate owning with HGVC as "heavily discounted, prepaid vacations" that are a decent decision for people who are going to travel anyway. If your family takes a trip each year to Hawaii or Disney or somewhere else and you can pay $1,400 in MF for your 2-bedroom (really nice) condo then you're really paying about $200/night (plus some fraction of your acquisition cost over x number of years). And that's a great rate over what you could get booking direct through Hilton. However, if you don't have the cash and you have to finance a purchase at 15% or if you're going to let your points go to waste then it may not be a prudent decision.

We look at the vacations as heavily discounted too. Pay a lot up front and then make it up down the road. In the three years we've been members. We've been to five resorts (used all our bonus points and free hotel nights too) and I would say the average room rate would have been around $300 a night. So I feel like we've gotten our money's worth, as far a the MF's go.
I like to think of this as a long term vacation investment. In fact I'll admit that's the line that I really ate up at our presentation. So now I just want to continue to build our value and not spend tens of thousands of dollars to do so.


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[mrbigolwillee]

How much do you pay per night of lodging in a HGVC unit?


IF one resale costs $1.00 per point and is $0.11 mfee/pt and another is offered at $0.75 per point but $0.22 mfee/pt, which of those is the better deal? Which gives you the lowest cost per night of lodging over oh, let's say ...10 years?

So this approach of cost per point and cost per mf is new to me. I'm glad that you shared it. I'll definitely keep it in my head as we continue to look for ways to expand our points at a reasonable cost.


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[Jason245]

How much do you pay per night of lodging in a HGVC unit?

The purchase is a "capital cost". The maintenance fee is an ongoing cost. Those costs together divided by the number of nights you can stay using your points = cost per night of lodging.

Capital costs must be amortized to determine their impact on the cost of the night of lodging. Simple accounting.

IF you want to pretend that your first night at HGVC cost you $20,000 +mfee and after that it was just the maintenance fee / nights of stay, then use 1 day as your amortization. 10 - 15 yrs is more realistic as an accounting principle (and not in my head).

How much I saved compared to buying from the developer is not relevant when deciding between two resale offers. Both are better then the developer purchase but one resale is better then the other. How will we decide?

IF one resale costs $1.00 per point and is $0.11 mfee/pt and another is offered at $0.75 per point but $0.22 mfee/pt, which of those is the better deal? Which gives you the lowest cost per night of lodging over oh, let's say ...10 years?

You are attempting to use accrual accounting for individuals. Individuals operate under cash basis accounting. We don't amortize cars over 10 years, we don't amortize our houses over 30, and we don't amortize education over 50 years.. so why are you amortizing a timeshare?



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[Jason245]

We look at the vacations as heavily discounted too. Pay a lot up front and then make it up down the road. In the three years we've been members. We've been to five resorts (used all our bonus points and free hotel nights too) and I would say the average room rate would have been around $300 a night. So I feel like we've gotten our money's worth, as far a the MF's go.
I like to think of this as a long term vacation investment. In fact I'll admit that's the line that I really ate up at our presentation. So now I just want to continue to build our value and not spend tens of thousands of dollars to do so.


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If your payback is 3 years or less, I view it as a good deal. . Within 5.. ok deal..anything greater and it makes little financial sense.

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[JSparling]

So this approach of cost per point and cost per mf is new to me. I'm glad that you shared it. I'll definitely keep it in my head as we continue to look for ways to expand our points at a reasonable cost.


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Lot's of discussions here on the MF per point subject.

http://tugbbs.com/forums/showthread.php?t=234280

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

You really have to add ALL COSTS (purchase, closing, activation, MF's for each year..) and then divide by the points you'll get for those same years. I generally look at a 10-year period because my kids are young and we'll use our units for many, many years.

 

[fernow]

If your payback is 3 years or less, I view it as a good deal. . Within 5.. ok deal..anything greater and it makes little financial sense.

I would love to find a timeshare resale at HGVC that had a payback of 5 years or less but don't believe such things exist.

By example, a Bay Club 2 bdm unit on the used market, 7000 points, goes for around $7000 plus closing and has mfee around $1400. You get about 7 days of lodging in a 2 bdm for 7000 points at Bay Club.

Mfee alone is $200 per night.

Similar units can be rented from VRBO for less than $250 per night.

So, to get a better deal by $1 over renting from VRBO (and having no future obligation) you would have to pay $49 x 35 nights = $1715 "out the door" for the Bay Club unit. NOT likely to happen.

At the asking price, if closing costs were included, you would not "break even" until 20 years.

Compared to buying from developer, all resales are a good deal. Compared to the market... they can be but are hard to find. Mfee too often is not much below market for rental of similar units, leaving little "value" to spend on the points.

 

[Jason245]

I would love to find a timeshare resale at HGVC that had a payback of 5 years or less but don't believe such things exist.

By example, a Bay Club 2 bdm unit on the used market, 7000 points, goes for around $7000 plus closing and has mfee around $1400. You get about 7 days of lodging in a 2 bdm for 7000 points at Bay Club.

Mfee alone is $200 per night.

Similar units can be rented from VRBO for less than $250 per night.

So, to get a better deal by $1 over renting from VRBO (and having no future obligation) you would have to pay $49 x 35 nights = $1715 "out the door" for the Bay Club unit. NOT likely to happen.

At the asking price, if closing costs were included, you would not "break even" until 20 years.

Compared to buying from developer, all resales are a good deal. Compared to the market... they can be but are hard to find. Mfee too often is not much below market for rental of similar units, leaving little "value" to spend on the points.

I bought 2 eoy bay club 1br units for 60 bucks all in. Used it for around 3 to 4 nights in 2br marco island (rental is around 3 to 400 per night), and several nights in 1 br in Orlando. . My payback was less than 1 year. Also spent 3 nights in Miami.

To be honest. The bay club 7k point packages can be got for around 3k all in on ebay last I looked. .

Payback is quick. .and that is how I like it..although for me..less cash outflow is more.. so if I end up needing more points probably get a third eoy and borrow as needed.

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[taterhed]

I think the main point is this: (IMHO)
Selling one low-point unit to acquire another high-point unit should only be considered if the payback is pretty darn quick. The whole selling/buying process is potentially painful and costly in both time and money. There is also a bunch of uncertainty in the '10-year' principle. I concede, you shouldn't buy a timeshare for short-range plans, but I also think you shouldn't financially 'plan' the 10 year approach as your justification for selling/buying.

oh yeah: if you decide to simply add a unit, you can take advantage of those great bargains that may just pop right up. Much harder to do with a sell-first buy-second deal. Not to mention shuffling those pending reservations etc...

That's my free advice; take it for what its worth (what you paid 4 it!)

 

[Talent312]

A minor correction:
"If you buy re-sale at [any HGVC resort], your points can be combined and pay one [club membership fee].
If you buy re-sale [at any resort] and keep Elara, you'll have to pay 2 maintenance fees.