maintenance fees

[bvoss]

Hi, I'm new to timeshares but what I've noticed is that while the weekly amount for buying a timeshare seems somewhat reasonable, charging a weelkly maintenance fee and calling it 'annual' when in fact that fee is charged PER week and annualized over the number of owners is uhm...a bit much. ie..with a $500 dollar annual maintenance fee for a one week ownership in a timeshare, if all the weeks in a year were sold in one week installments, that comes to about $25,000 annual maintence fee for that one unit! that's pretty steep. can anyone educate me as to my misunderstanding of this? thanks bvoss

 

[kaio]

Well... think if the resort rented a single room for $200/night every night of the year [365 nights].... 200*365=$73,000. Or even for $100 / night.... 100*365=$36,500... Of course, they probably wouldn't be able to rent every night of the room in a single unit, let alone every one... so by locking people into one week a year contracts in a single room, they may possibly come close to $25,000 if everyone pays their MFs.... but.... This is how they try to make money back on their expense of building a multi-million dollar resort, personell, marketing, upkeep, etc.

 

[rickandcindy23]

The fee is what it costs to manage the resort. Then there is the refurbish and refurnish, when necessary.

There are other expenses too.

Cable TV, phone, other utilities, housekeeping, laundry, lawn maintenance, regular painting, parking lot maintenance, etc.

 

[vacationtime1]

Very few condo projects have the same level of amenities (pools, pool towels, pool attendants, water slides, common BBQ's, etc.) as timeshare resorts. Nor do they have to deal with reservations and front desk help. Weekly maintenance, linens, and towels are not free. Comparing costs at a high end condo association and a timeshare is not an apples-to-apples comparison.

That said, management companies receive a healthy, and sometimes unhealthy, profit margin for providing these services.

Additionally, there are threads on this board about the difference between owner-controlled and developer-controlled homeowner associations; fees at the latter are almost always higher than at the former.

 

[vckempson]

Well... think if the resort rented a single room for $200/night every night of the year [365 nights].... 200*365=$73,000. Or even for $100 / night.... 100*365=$36,500... Of course, they probably wouldn't be able to rent every night of the room in a single unit, let alone every one... so by locking people into one week a year contracts in a single room, they may possibly come close to $25,000 if everyone pays their MFs.... but.... This is how they try to make money back on their expense of building a multi-million dollar resort, personell, marketing, upkeep, etc.

The "they" is "you". The condo association has a budget to take care of and manage the facilities, just like you might have a budget to maintain your home. There's no profit off of the MF's, at least not like you're thinking. And there's no marketing expense. That's on the sales side of things.

The association can hire a management company to do everything, and they of course have to build in some profit, which as pointed out can be reasonable to unhealthy. I'd say I hear about more resorts that get into trouble from not charging enough than charging too much. You need to have a sinking fund to take care of big expenses, otherwise you can get special assessments which are no fun.

 

[e.bram]

The high MFs are the result of inept and corrupt management.

 

[Mel]

Indeed, there is inept and corrupt management at some resorts, but most are run as a relatively tight ship. Look at all the older independent resorts, and their fee structures, and you will see a very clearly thought out budget. These budgets are available to all members, and in fact the members vote on them each year. My resorts send me a copy of the budget broken down by unit and unit/week before we vote each year.

As for the "high" cost, consider the cost of maintaining a beach cottage, and renting it out through a rental agency. That rental agency gets their cut, and that would be little different from the management company at your resort. Here's a few of the things that $25,000 a year covers:

Property taxes (though this may be billed separately)
- Home insurance
- Liability insurance
- Weekly cleaning service (that's $50-$100 of the fee right there). Remember that your cleaning crew only works on weekends during turnover - you pay a premium for their service.
- Linens (cleaning them weekly, replacing them periodically
- Activities staff
- Breakage, and wear and tear of all of the furnishings
- Reserves (like escrow) to cover expected future costs, like capital improvements

 

[timeos2]

Apparently e.Bram owns at some pretty poorly run resort(s). That isn't true at ours. Or at most others I know of. Inept and corrupt management is the exception not the rule in timeshares. But some do exist. I would try to avoid those as a general rule.

 

[rickandcindy23]

The "they" is "you". The condo association has a budget to take care of and manage the facilities, just like you might have a budget to maintain your home. There's no profit off of the MF's, at least not like you're thinking. And there's no marketing expense. That's on the sales side of things.

The association can hire a management company to do everything, and they of course have to build in some profit, which as pointed out can be reasonable to unhealthy. I'd say I hear about more resorts that get into trouble from not charging enough than charging too much. You need to have a sinking fund to take care of big expenses, otherwise you can get special assessments which are no fun.

You said it better than I. Great explanation.

 

[ampaholic]

Apparently e.Bram owns at some pretty poorly run resort(s). That isn't true at ours. Or at most others I know of. Inept and corrupt management is the exception not the rule in timeshares. But some do exist. I would try to avoid those as a general rule.

Another thing to consider is the fact that Beach and Lake Resorts cost more to operate as the moist/salt air breaks them down faster.

I am part of a 36 unit "strait condo" (the 1 owner gets all 52 weeks) and the Maintenance fees agreed to by the owners is about 900 per month or close to ten thousand per year. 15 percent of that (about $145 month) goes just to keep up the pool, steam rooms and spa (hot tubs), and another 15% goes to property taxes - go figure

 

[timeos2]

Another thing to consider is the fact that Beach and Lake Resorts cost more to operate as the moist/salt air breaks them down faster.

I am part of a 36 unit "strait condo" (the 1 owner gets all 52 weeks) and the Maintenance fees agreed to by the owners is about 900 per month or close to ten thousand per year. 15 percent of that (about $145 month) goes just to keep up the pool, steam rooms and spa (hot tubs), and another 15% goes to property taxes - go figure

Rick - Did you see the earlier post I made regarding the fact that sea side resorts are more expensive to operate in part due to the severe beating they take vs those less exposed to the sea elements? That was labeled as, I believe, balderdash (or something like that) so I wonder how it is you too believe that weathering IS a costly problem. Did you not get told it isn't? Seems strange we both, along with most of the world, are aware that weathering is a major cost center but in certain areas it apparently doesn't apply. Those would specifically be inept and corruptly operated timeshares, I guess!

 

[ronparise]

Im buying timeshares because I think the fees and purchase price combined, represent a great bargain compared to the cost to buy and maintain a second home

 

[celperf]

Im buying timeshares because I think the fees and purchase price combined, represent a great bargain compared to the cost to buy and maintain a second home

i think the same, but i have a friend that is buying a house and only for going some times in playa del carmen, i tell him about timeshare, but he says that not because is better the second home and i think he will use about 1 month or 1 1/2 month at year,

 

[am1]

You are right that maintenance fees are very high for a week. That is because the costs are high. Do yourself and everyone else a favour and only buy a timeshare if you are comfortable without the weekly maintenance fee. They will always go up as well.


A second home can be better. As you go when you want. Make it the way you want. Leave stuff there. It is an investment. I would say this is more for places that you can drive to and want to go to most weekends.

 

[ampaholic]

Rick - Did you see the earlier post I made regarding the fact that sea side resorts are more expensive to operate in part due to the severe beating they take vs those less exposed to the sea elements? That was labeled as, I believe, balderdash (or something like that) so I wonder how it is you too believe that weathering IS a costly problem. Did you not get told it isn't? Seems strange we both, along with most of the world, are aware that weathering is a major cost center but in certain areas it apparently doesn't apply. Those would specifically be inept and corruptly operated timeshares, I guess!

I missed your post, What thread was that in?

As a Real Estate Broker I learned quite well that exposure of Real Estate to salt air and lakeside air increase both resale value and maintenance costs. I would be happy to point out what a dumb bunny anyone who thinks otherwise is.

Let me at em :whoopie:

 

[e.bram]

I own a full ownership condo in Monmouth Beach, NJ. Right on the rough ocean beach. We have ind0oor and outdoor pools and tennis courts, 24 hr doorman, valet and security. The MFs are $650/ mo and RE taxes about 400/mo. Utilities are about $100/mo. For at total of about 1150/mo or about 290/wk. If we add 110/wk to bring it to 400/wk we have over 5 years over $25,000.00 to refurnish and refurbish the unit more than enough. My TSes weekly MFS are from $650 to $800 for the same size units with the same amenities.

 

[Ridewithme38]

I own a full ownership condo in Monmouth Beach, NJ. Right on the rough ocean beach. We have ind0oor and outdoor pools and tennis courts, 24 hr doorman, valet and security. The MFs are $650/ mo and RE taxes about 400/mo. Utilities are about $100/mo. For at total of about 1150/mo or about 290/wk. If we add 110/wk to bring it to 400/wk we have over 5 years over $25,000.00 to refurnish and refurbish the unit more than enough. My TSes weekly MFS are from $650 to $800 for the same size units with the same amenities.

You forgot to include the cost of weekly maid service

 

[am1]

You forgot to include the cost of weekly maid service

There are a hundred other costs he forgot as well.

 

[ronparise]

I own a full ownership condo in Monmouth Beach, NJ. Right on the rough ocean beach. We have ind0oor and outdoor pools and tennis courts, 24 hr doorman, valet and security. The MFs are $650/ mo and RE taxes about 400/mo. Utilities are about $100/mo. For at total of about 1150/mo or about 290/wk. If we add 110/wk to bring it to 400/wk we have over 5 years over $25,000.00 to refurnish and refurbish the unit more than enough. My TSes weekly MFS are from $650 to $800 for the same size units with the same amenities.

Id add another $100 a month for utilities and another $100 for cable tv. and another $50 for internet to bring the total to $1400. 12 months a year or $16800. Thats for a New Jersey beach house, only worth using about 5 months a year, if that; or $3300 a month or about $850 a week. Coincidently about what I pay for maintenance at my most expensive timeshare week. (Dont forget that I have next to no investment tied up in my 13 weeks)

If we work hard at finding good deals I suspect that a couple could live in timeshare resorts full time for something less that $1500 a month,


I know he didnt mean to do it, but ebram makes my argument that todays fees are a bargain

 

[slip]

I agree with Ron. When I show people where I go and for what my MF
cost they can't believe it. That's one reason I love bringing guests.
I think today's fees are a bargain.

 

[timeos2]

I missed your post, What thread was that in?

As a Real Estate Broker I learned quite well that exposure of Real Estate to salt air and lakeside air increase both resale value and maintenance costs. I would be happy to point out what a dumb bunny anyone who thinks otherwise is.

Let me at em :whoopie:

Look at posts 119-122 in this thread to see how I alone think that sea air is rough on buildings.

 

[ampaholic]

Look at posts 119-122 in this thread to see how I alone think that sea air is rough on buildings.

(begin personal opinion)...
All I can say is consider the source - and I will point out he is a dumb bunny as his posts prove.

John he's already on my ignore list and I suggest you put him on yours as well.
(end personal opinion).

Fact from a consulting engineer:

"Salty ocean air can drift a mile or more inland. Since Florida has so many miles of coastline, this presents a common problem in air conditioning equipment. Regular untreated fins on air cooled air conditioning equipment have a hard time with salt. It corrodes the aluminum in the outdoor condensor coils. Outdoor air cooled equipment winds up wearing out in half it’s expected life."

Code: "it costs twice as much"

Fact from a furniture manufacturer:

"We advise our customers to periodically clean the surfaces of the furniture with a damp cloth and mild, non-abraisive soap. The furniture does well in most outdoor environments. If you are right on the ocean, we advise bringing in the furniture in the winter since the salt air is hard on painted finishes.

Code: "salt air is hard on painted surfaces".

I could go on and on - but I don't think he will let facts get in the way of his dumb bunny utterings.

 

[strandlover]

I agree with Ron. When I show people where I go and for what my MF
cost they can't believe it. That's one reason I love bringing guests.
I think today's fees are a bargain.

When you leverage trading power in accociation with maintenance fees, it's an even bigger bargain. I just gifted a one week vacation in Cabo to a family member for 7 TPUs, leaving me more than enough for my March vacation. All this with one week's worth of maintennace fees (+ RCI fees of course).

 

[LannyPC]

if all the weeks in a year were sold in one week installments, that comes to about $25,000 annual maintenance fee for that one unit! that's pretty steep. can anyone educate me as to my misunderstanding of this? thanks bvoss

Not every suite has 52 intervals owned. Some suites may only have half of that --- just ask a resort/developer that hires those slimy sales people.

And then, on top of that, not all owned intervals have owners paying MFs. Many are defaulting and/or letting the interval go into foreclosure. When that happens, as has been pointed out many times on these boards, the other owners are left to absorb the resort's operating costs which is reflected in the MFs.

I don't know if you have a copy of your resort's latest operating budget but, if you do, it should have a line on there pointing out what each owner is paying to cover uncollectable debts. I know where we own, for 2011, each non-delinquent owner was assessed about $17 for this cost.

Moderator Denise might even tell you that where she owns, that cost is much higher.

So to say that 1 unit gets $25000 in MFs per year is a bit of a stretch.

 

[vckempson]

Not every suite has 52 intervals owned. Some suites may only have half of that --- just ask a resort/developer that hires those slimy sales people.

Unless forclosed on by the association every unit has 52 weeks of ownership. If not yet sold, then they are owned by the developer and MF's are paid by the developer. So again, the only intervals not owned by someone who is liable for the MF are those that have been forclosed on or deeded back to the association.