Lowballers

[T_R_Oglodyte]

You are correct. TUG is one of MANY advertising sites which means more competition. I have obtained rentals for in-season ski and beach weeks and have always gotten a great deal. In fact, we have stayed at the "Taj Mahal" (as we like to refer to it), a huge house with all of the trimmings for a NY ski vacation several times. Asking price. $1200 per night (vrbo, cyber rentals, etc.) I negotiated with the owner for $450 per night. Gotta love lowballing !!

Reminds me of when I went to Suncadia Resort here in Washington for a conference in early November - a very slow season. Rather than using the on-site conference hotel I used VRBO to find condo owners who were renting units. Most of them were asking $200 or more per night, one week minimum, for a one-bedroom unit.

I offered $75/night for three nights, + $50 to cover the mandatory cleaning fee. And I was prepared to offer more if needed because my alternative was a hotel room (instead of a condo) for $135/night, plus one of those irksome resort fees. Almost all of the owners totally ignored my offer. A couple of them responded and told me, in essence, to get real. But one of the owners accepted my offer.

I presume that most of the owners were offended by my offer. But one wasn't and made some money off her unit during a time when it would have been unused anyway.

 

[vacationhopeful]

At this date anyone interested in Ft. Lauderdale for 3/2 would be a local, who would probably not be wanting an inland(non ocean front TS and unit), no matter where it is advertised, unless it was an absolute steal(lowball).

Are you trying to analyze my rental at FLBR? First off, it is NOT inland. There are NO major buildings on the beach sand in almost all of Ft Lauderdale - not the Ritz, the W, the Marriott, B Ocean, etc. Most are directly located on a 4 land road called A1A with heavy traffic - city bus routes, cars, truck, tractor trailers. Almost all have a heavy parking fee of $28-60 per day and valet with a tip. FLBR has free parking for 1 car. FLBR has a superior location in a funky beach area of older tee-shirt shops, 1960's neon lights, Kava and tattoo businesses and fine dining (outdoor & indoor & rooftop). Also all of the above major chain hotels, have dumpy apartments and motels behind their fancy rear exit doors. Our rear exit is 1 block from the most upscale Galleria Mall - Nieman Marcus and Dillards department stores along with Capital Grill, Blue Martini, PF Chaing, Seasons52 and the upscale branch of the Cheesecake Factory. Then there are our local favorite - La Cantana, Franco & Vinnie's, the Parrot, Blue Fish, and MCsorley's. Plus the resort has an onsite Swiss Restrauant with HOT LAVA ROCK cooking and fondue (meet and cheese). Oh, did I mention the Thai restrauant or the homemade ice cream store which as chocolate covered popcorn or the Sushi place or the 24 hour Pizza joint for police and cabbies? The water taix stop is 2 blocks from the West door of the building.

It is a great area, alive, fun and almost everyone has a neat place to eat for under $20 or less per person for dinner. Most of the above is within 1 block of the FLBR; 3 blocks is the maximum walk.

This may not have a big name on the side of the building - but it was a timeshare before almost ALL the major players ever entered the timeshare game --- 1976 was the year I met one lady who brought her unit.

PS. As a neighbor resident, the guests of the FLBR enjoy many discounts at the businesses/restrauants within 2 blocks. That homemade ice cream store is our resort's ICE CREAM SUNDAY resort special locale - $3.50 for 2 scoops and free toppings which we put on; I have spent $8 for the same before they partnered with the resort. 10% off many of the restrauants. Free round of drinks at the others. 50% off tours of the historic Bonnet House (which was a final stop on the Amazing Race one season).

PSS. The resort is 100% sold out - there is NOT an empty room. Has not been empty since mid January. It is extremely likely that I will get rack rate for every night I don't rent. At $189 for the studios and $269 for the 1 bdr minus their commission. Other owners are telling me of the units the resort is RENTING BACK from them; I even have received calls directly from the staff LOOKING for nights to rent from me. One owner rented a unit for his tenant and paid MORE to me than he got from the tenant --- just 2 nights before checkin.

Know the your market. I think I know this one.

 

[Beefnot]

It is pretty darn easy to price out what a timeshares should sell for. We have all the variables easily calculated to truly assess the true market price. Marginal revenue i simply the rental amount deducting you maintenance fees, marketing fees, and hourly rate you charge to list the item.

The required rate of return is the amount of interest you require to make the investment attractive. I recommend at least 15% or .15 as timeshares have a lot of risk...ie assessments, property structure depreciates every year, etc.

The financial formula to price out an asset that with infinite cash flows is as this is a deeded annual timeshare:

Marginal revenue/required rate of return

So, if you can rent out the timeshare for $1,500 and MF fees are $800, and marketing fees were $100, misc fees $100, and wage was $200 (say your wage rate was $25/ hour and you spend 8 hours marketing and securing a renter). Your marginal revenue would be $300.

So, the question is how much should you pay for this timeshare. The answer is you would be willing to spend $2,000 today to get indifinite annual cash flows of $300 each and every year.

$300/.15= $2,000

Problem is arent rational. I would like another timeshare in whistler for week 52 and i have been looking for five years. I wont pay more than the financial model i described. Since i can rent a one bedroom in whistler that week for $1,000 and the MF's are $800/ year and my ROI is 15%, i offer $1,333 for the week.

($1,000-$800)/.15=$1,333

People think this is a lowball offer, but it is just basic fiscal analysis. It is clear that in my case i am better off renting at this time. Things undoubtedly will change at some point, but until then, i think the renting side is the one to be on.

Shrewd, pmuppet, shrewd. Although even at $1,333 I would consider it an overpayment using your calculation, since you have not discounted the value of the perpetual differential into today's dollars. I forget the equation, but you might even need to cut your $1,300 in half.

 

[Beefnot]

PSS. The resort is 100% sold out - there is NOT an empty room. Has not been empty since mid January. It is extremely likely that I will get rack rate for every night I don't rent. At $189 for the studios and $269 for the 1 bdr minus their commission. Other owners are telling me of the units the resort is RENTING BACK from them; I even have received calls directly from the staff LOOKING for nights to rent from me. One owner rented a unit for his tenant and paid MORE to me than he got from the tenant --- just 2 nights before checkin.

Know the your market. I think I know this one.

Unless you let the room go vacant over principle.

 

[vacationhopeful]

Shrewd, pmuppet, shrewd. Although even at $1,333 I would consider it an overpayment using your calculation, since you have not discounted the value of the perpetual differential into today's dollars. I forget the equation, but you might even need to cut your $1,300 in half.

Yes, 5 years was his number of years for payoff. 50% of the $1300 is about correct if a PV calculation is done.

 

[Beefnot]

Yes, 5 years was his number of years for payoff. 50% of the $1300 is about correct if a PV calculation is done.

Now I'm confusing myself, PV, FV, and terminal value all swirling in my head. On second thought, think the original calc may be right. Need to dust off my business school books.

 

[vacationhopeful]

Now I'm confusing myself, PV, FV, and terminal value all swirling in my head. On second thought, think the original calc may be right. Need to dust off my business school books.

PV is when you take future money back to today.
FV is your expected dollars spent today should be worth - what you hope to recover when you sell your capital/invested dollars.

 

[e.bram]

Only problem is that a TS which could rent for $1500.00(with $850.00 MF) consistantly would be pretty desirable for a user , who would willing to pay much more than the $1333.33, so you would never get for that amount.

 

[T_R_Oglodyte]

It is pretty darn easy to price out what a timeshares should sell for. We have all the variables easily calculated to truly assess the true market price. Marginal revenue i simply the rental amount deducting you maintenance fees, marketing fees, and hourly rate you charge to list the item.

The required rate of return is the amount of interest you require to make the investment attractive. I recommend at least 15% or .15 as timeshares have a lot of risk...ie assessments, property structure depreciates every year, etc.

The financial formula to price out an asset that with infinite cash flows is as this is a deeded annual timeshare:

Marginal revenue/required rate of return

So, if you can rent out the timeshare for $1,500 and MF fees are $800, and marketing fees were $100, misc fees $100, and wage was $200 (say your wage rate was $25/ hour and you spend 8 hours marketing and securing a renter). Your marginal revenue would be $300.

So, the question is how much should you pay for this timeshare. The answer is you would be willing to spend $2,000 today to get indifinite annual cash flows of $300 each and every year.

$300/.15= $2,000

Problem is arent rational. I would like another timeshare in whistler for week 52 and i have been looking for five years. I wont pay more than the financial model i described. Since i can rent a one bedroom in whistler that week for $1,000 and the MF's are $800/ year and my ROI is 15%, i offer $1,333 for the week.

($1,000-$800)/.15=$1,333

People think this is a lowball offer, but it is just basic fiscal analysis. It is clear that in my case i am better off renting at this time. Things undoubtedly will change at some point, but until then, i think the renting side is the one to be on.

Congratulations to you if you can find a one-bedroom condo in Whistler Village for week 52 for $1000 that is at the same level of quality as Whiski Jack, Mountainside Lodge, or Club Intrawest.

+++++

I've bought and sold Whistler timeshares, rented units that I've owned, and rented other people's units. I sold out after concluding that I was better off renting than owning.

I'm pretty surprised - the point of amazed - that year-in and year-out you can always find a one-bedroom, Whistler Village or Creekside condo for Week 52 for $1000.

I'm not all surprised that you can't find someone willing to sell their fixed week 52 at $1333, as any fixed week 52 one-bedroom unit that I can think of (even Whiski Jack Creekside, which is the bottom of barrel for timeshare units in Whistler) easily will generate enough cash flow to justify a $10,000 purchase price as an investment property.

So, if you can find units renting for $1000 for that week, it certainly doesn't make sense to you to buy that week. But for the people who own those units, it makes even less sense to sell the unit to you for $1333.

 

[timeos2]

A few years ago when things were much better& prices higher than now I really wanted thr Manhattan Club during a popular trade show. I gave about 14 advertisers my much lowrt than asking price offer. About 1/2 replied & some were REALLY mad & informed me in no uncertain terms that was below "market" rate. But one replied if I paid in full now (about a month ahead of use) they'd take it. A bit of risk but I did it. Things went fine


I don't know or care if the others ever got close to their price or not. I got mine so I was happy. All I needed was one realistic seller & I got it. The rest thought ot was low ball but one got my rent money. We were both happy

 

[Dave*H]

A few years ago when things were much better& prices higher than now I really wanted thr Manhattan Club during a popular trade show. I gave about 14 advertisers my much lowrt than asking price offer. About 1/2 replied & some were REALLY mad & informed me in no uncertain terms that was below "market" rate. But one replied if I paid in full now (about a month ahead of use) they'd take it. A bit of risk but I did it. Things went fine

I offered $75/night for three nights, + $50 to cover the mandatory cleaning fee. And I was prepared to offer more if needed because my alternative was a hotel room (instead of a condo) for $135/night, plus one of those irksome resort fees. Almost all of the owners totally ignored my offer. A couple of them responded and told me, in essence, to get real. But one of the owners accepted my offer.

Both good examples. Owners getting "offended" because you are low balling when, in fact, your offer is good enough for one of the owners. So who is the one that needs to get real?

I had an owner call me once in request to my email for more information. His ad stated rates starting at $XXX/night. What he didn't state was that it was $XXX/night per person based on 10 person occupancy. I figured something was off because the price seemed way to low but though I'd get more info anyway. After a couple of questions, I quickly came to the realization that what he wanted and what I was willing to pay were a long ways apart and told him so. He told me to make an offer, perhaps because the check in time was only a couple of weeks away. I made him an offer that was actually above what I wanted to pay, but I figured his was in a better location and was probably nicer than the other stuff I was considering. He got huffy and told me I'd never find anything for that price. Don't know why he felt it necessary to get huffy when he asked me to make an offer AFTER I told him I was looking for something cheaper. A couple of days later, I found something, not quite as nice, but larger for 1/3 less than I offered him. Who was the one that needed to get real? I did notice from his online calender, that his place never did get rented.

 

[Paumavista]

How much is house worth now?

I was stung by a low baller who gave me a story, said it was all her husband would let her pay and that otherwise she would just stay at a nearby Days Inn with their 2 children. I reluctantly settled for $40/night over Christmas break for my 2 bedroom villa in Orlando with MF's of $1500. Time was running out. They lived a drive away from Disney.

After the paypal was executed, I decided to check out the address she gave for the registration. Turns out she lived in an upscale neithborhood in a 6 bedroom 5 bath, 5200 square ft million dollar house. Thanks Zillow!

She wasn't a member of Tug.
Next time....tuggers only.
I guess I was taken !! :

Well that's what Zillow says....however, if it's like most neighborhoods the house is worth 25% of what it says and the house payment is still based on the original 900K mortgage! They may not be living as high off as you think.........

Just another way to look at it......

 

[Beefnot]

Well that's what Zillow says....however, if it's like most neighborhoods the house is worth 25% of what it says and the house payment is still based on the original 900K mortgage! They may not be living as high off as you think.........

Just another way to look at it......

So I guess we know who the woman in that story was now...

 

[T_R_Oglodyte]

I just thought of another "lowballing" anecdote to relate.

Upthread I talked about Whistler, and my decision to sell because I could rent more cheaply. As background, I visit Whistler typically once per year, often the first week of April because there's a significant bread in demand at that time of year.

I was looking for a rental, and I did a fair amount of searching to find someone who was offering a good deal. I finally found something I liked. I contacted the owner - who was already the lowest advertiser - and made an offer that was a significant increment less than what she was listing for. I knew her unit was available and that she was unlikely to have a tenant if she didn't take my offer. Yes folks, I confess. I'm a lowballing proto-slime.

She replied back to me and refused to lower her price. She said that she had researched around and felt that she was already offering the best rates available and that if I could find anything that offered more value I should take it.

She was absolutely correct, and I went ahead and rented from her at her rate. And I rented from her at her rate for four of the next six years, until she sold the unit. (Of the years I didn't rent from her, one year was when someone else had already booked the time I wanted to have, and the other year was when I exchanged into Whistler.)

During that time I also referred four or five other people to her who rented from her based on my recommendation.

 

[Ridewithme38]

I just thought of another "lowballing" anecdote to relate.

Upthread I talked about Whistler, and my decision to sell because I could rent more cheaply. As background, I visit Whistler typically once per year, often the first week of April because there's a significant bread in demand at that time of year.

I was looking for a rental, and I did a fair amount of searching to find someone who was offering a good deal. I finally found something I liked. I contacted the owner - who was already the lowest advertiser - and made an offer that was a significant increment less than what she was listing for. I knew her unit was available and that she was unlikely to have a tenant if she didn't take my offer. Yes folks, I confess. I'm a lowballing proto-slime.

She replied back to me and refused to lower her price. She said that she had researched around and felt that she was already offering the best rates available and that if I could find anything that offered more value I should take it.

She was absolutely correct, and I went ahead and rented from her at her rate. And I rented from her at her rate for four of the next six years, until she sold the unit. (Of the years I didn't rent from her, one year was when someone else had already booked the time I wanted to have, and the other year was when I exchanged into Whistler.)

During that time I also referred four or five other people to her who rented from her based on my recommendation.

You know, if you had waited her out a couple more weeks, i bet you could have gotten the real market rate that you offered her the first time though...

 

[ausman]

This makes no sense to me.

If you knew she was really unlikely to have a tenant. Why not wait a week or however many necessary and offer again. When she had reached the same conclusion.

Seems she thought she still had options and so did you.

Viewpoints are all over the map on this topic with lots of posturing, makes an interesting read.

 

[T_R_Oglodyte]

You know, if you had waited her out a couple more weeks, i bet you could have gotten the real market rate that you offered her the first time though...

Nah - I was offering her below market rate (no question that I was lowballing her) just to see if she would bite. I was only about two weeks before check-in so there wasn't a lot of time left. I was interested in getting arrangements finalized so that I didn't feel as if I didn't have to take whatever was available at the last minute. Knowing the market there, it was worth it to me to take her very good offer for the property that she was offering.

Because she did have the best rates, she also kept her property booked at a higher occupancy level than her competitors, who didn't meet her pricing and who also snubbed "lowballers" like me.

There's also an issue of the matter of my time. Yeah - if I worked about 15 other landlords I might have been able to get something for a max of $15 less per night, or $45 max savings. But it's not worth it to me to put in an extra four or five hours of effort to save somewhere between $30 and $45.

 

[Ridewithme38]

Nah - I was offering her below market rate (no question that I was lowballing her) just to see if she would bite. I was only about two weeks before check-in so there wasn't a lot of time left. I was interested in getting arrangements finalized so that I didn't feel as if I didn't have to take whatever was available at the last minute. Knowing the market there, it was worth it to me to take her very good offer for the property that she was offering.

Because she did have the best rates, she also kept her property booked at a higher occupancy level than her competitors, who didn't meet her pricing and who also snubbed "lowballers" like me.

There's also an issue of the matter of my time. Yeah - if I worked about 15 other landlords I might have been able to get something for a max of $15 less per night, or $45 max savings. But it's not worth it to me to put in an extra four or five hours of effort to save somewhere between $30 and $45.

Do you see what the problem was? Your demand for the product was greater then her need to unload it....Luckily, this isn't the case with most timeshare rentals, with the huge amount of inventory available everywhere for rent and the limited time they have to rent it out...this is the same thing that is happening with the timeshare resale market....prices are dropping to Zero, like the rental market should be

My vacations are planned around where i can find the best deal, if somethings not a good enough deal i move on and plan for somewhere else...seems you were booking in the wrong order..my demand is NEVER greater then their need to unload..

I say if you see a rental that you may possibly want, you should start your offer at $1 a day, and work your way up from there...if they won't take it...they're the one stuck with an expiring product and there are hundreds of other people selling the same thing...its their loss...eventually those renting timeshares will catch on like those selling timeshares and you will see prices drop down to the market rates of $10-$50 a night like they should be

 

[DeniseM]

you will see prices drop down to the market rates of $10-$50 a night like they should be

Ride - Can I rent your timeshare for $10 a night? I am ready to Paypal you the money right now. I'd like your 4th of July week that I know you have for rent.

Fortunately, you are wrong - there is a healthy market for high-end timeshares.

 

[Ridewithme38]

Ride - Can I rent your timeshare for $10 a night? I am ready to Paypal you the money right now. I'd like your 4th of July week that I know you have for rent.

Wait till June 20th! Your making your offer too early, you'll learn eventually! As of right now it does look like i won't be able to use it...i got a promotion and i'm not sure what the vacation situation is going to be like with it, so my demand to rent is higher then your need to use it...but that may change, i could feel a higher or lower need to rent it over time

Fortunately, you are wrong - there is a healthy market for high-end timeshares.

The market is based on ignorance of the real values, like the TS Retail Market...An informed public wouldn't pay that much

 

[DeniseM]

Wait till June 20th! Your making your offer too early, you'll learn eventually!



The market is based on ignorance of the real values, like the TS Retail Market...An informed public wouldn't pay that much

You and I are dealing with a different market. The people that are renting high-end timeshares are not looking for a $10 deal at the last minute. They are looking for the top resorts - they don't mind paying for it and they would rather have luxury than a bargain. I just rented 2 consecutive weeks on Maui to one person for $3,600 a week. Truth.

BTW - The exact same units are over $5,000 a week from the resort. Truth.

 

[am1]

My vacations are planned around where i can find the best deal, if somethings not a good enough deal i move on and plan for somewhere else...seems you were booking in the wrong order..my demand is NEVER greater then their need to unload..

This will change when your daughter is older and less flexible on when she can travel and where she wants to go? What about booking airfare?

Would it shock you to know that I rent out timeshares for over $400 a night? There is not much I rent for less than $129 a night.

 

[Ridewithme38]

You and I are dealing with a different market. The people that are renting high-end timeshares are not looking for a $10 deal at the last minute. They are looking for the top resorts, and they don't mind paying for it. I just rented 2 consecutive weeks on Maui to one person for $3,600 a week. Truth.

Thats one of the situations where their demand to rent out weighs your need to unload....horrible situation for the buyer, the higher their demand the more they can be ripped off with high and high prices...this is kinda how TS Retail sales work, the salesman build up the ownership through false promises of 'high end' options and amenities so people will pay anything for it...in the end, these guys realize that while TS's are nicer then hotel rooms, a $300 a week TS isn't that different then a $3600 TS or atleast an informed buyer would

Never forget though....just because someone is will to pay a rediculously high price for something doesn't mean that that is the actual value of that item...hell, i know people that have sold 'rolex' watches for $250 when they just bought them for $5 in Manhattan

 

[Ridewithme38]

Would it shock you to know that I rent out timeshares for over $400 a night? There is not much I rent for less than $129 a night.

Who was it that coined "A Sucker is born everyday"...seems to fit the Timeshare Rental market...i have trouble accepting that people are ignorant enough to pay that much....but i have been to walmart, so its not THAT hard to accept

 

[am1]

Who was it that coined "A Sucker is born everyday"...seems to fit the Timeshare Rental market...i have trouble accepting that people are ignorant enough to pay that much....but i have been to walmart, so its not THAT hard to accept

4 hotel rooms down the street would have been over $1000 a night. 12 people in the same unit is very nice for a birthday party, bachelor party, halloween, etc.

Demand is very strong for these units. I usually get multiple offers at asking price.