Marriott - direct from developer vs from resale market

[Dave M]

Here is the link to the air/hotel package charts (bottom of the page). Note that for the packages for most major U.S. airlines, the basic cost (e.g., for category 7 hotels) is 200,000 points, including 50,000 FF miles. Adding FF miles (to 70k, 100k and 120k FF miles) costs one point for each additional FF mile.

 

[seema]

If one wanted to transfer the Marriott Reward Points to an airline FF program (only) - ie no hotel/air package - what would be the conversion rate for such a transfer?

 

[thinze3]

It varies. Here's a sample.

10,000 miles cost 30,000 MR points
50,000 miles cost 125,000 MR points


Terry

 

[pwrshift]

If my math is correct, you save 180,000 MR points by taking a Cat7 hotel + 120,000 FF mile package, over taking the components separately. That's even better than I realized...with the packages the miles are virtually free.


AIR - It takes 125,000 MR points for 50,000 FF miles, or 2.5 MR points for 1 FF mile. At this rate, the 120,000 FF miles in the air+hotel pkg would take 300,000 MR points if ordered separately. That alone is more than the Cat7 pkg.

HOTEL - It takes 150,000 MR points for a Category 7 hotel stay for 7 nights.

TOTAL if bought separately: 450,000 MR points.

TOTAL if bought as an #0910 package: 270,000 MR points.

http://www.marriott.com/rewards/moreRewardDetail.mi?marrRewardCode=0910&points=270,000&type=call

SAVING with Air+Hotel pkg: 180,000 MR points...enough for another 7 night category 7 hotel stay - in Europe that's about $4,000.

 

[icydog]

People buy direct for different reasons. I can come up with 7 easily:

1. Brand new resort just open up for sale
2. High demand fixed week
3. Special deals, such as the 50/50 program
4. MRPs given at closing
5. MRP trade option
6. Convenience
7. Financing

Each purchaser must evaluate the offer according to their own needs. Items 1 - 4 could be persuasive for me; while 5 - 7 are not. Others may very well reach a different conclusion.

What the 50/50 program? I like 5 as well but only for the first few years of my pre-construction Lakeside Reserves in Orlando weeks.

 

[luv2vacation]

Marilyn - I think the 50/50 program that JimC (JimC - correct me if I'm wrong) is referring to is when you purchase 2 EOY's together, one odd & one even. This gives you the option of having 2 home resorts (alternating each year) and still qualifies for full year purchase incentives. In addition, instead of paying the usual 60% for an EOY, you instead pay 50% for each. The biggest drawback is that it doesn't include ALL resorts that are being sold EOY and the list of available resorts sometimes changes. A salesperson could give you a list of what resorts are participating in the program right now.

 

[Lawlar]

Important Info

This thread got way off track. But that's ok because this is good info.

I would suggest that some of this info on how to best use Marriott Points be placed on a permanent thread where it can be easily accessed. Or is that already the case and I just don't know where to look (very likely)?

 

[JimC]

Marilyn - I think the 50/50 program that JimC (JimC - correct me if I'm wrong) is referring to is when you purchase 2 EOY's together, one odd & one even. This gives you the option of having 2 home resorts (alternating each year) and still qualifies for full year purchase incentives. In addition, instead of paying the usual 60% for an EOY, you instead pay 50% for each. The biggest drawback is that it doesn't include ALL resorts that are being sold EOY and the list of available resorts sometimes changes. A salesperson could give you a list of what resorts are participating in the program right now.

Yes that is what I was referring to. We bought Shadow Ridge and Canyon Villas that way because we wanted to alternate between the two without the hassle and fees of trading. The only incremental expense is that you have two sets of closing costs.

 

[Juggy]

Bean Counter Program?

I've noticed many of you claim to be bean counters. Would any of you also be experienced enough in mathematics to come up with a formula that would determine at what cost of a timeshare would it be more beneficial for points, and when it would be more beneficial to just be resale?

My guess is the formula would need several criteria to pick from such as:

- Cost of buying direct timeshare
- Interest on financing the difference in price from resale or buying direct
- Maint. fees would not be used since you pay these direct or resale
- # of Points you get for trading in a week

And the formula would have to make several assumptions such as:
- Costs of taking "dream" vacations which can be obtained by using points
- Costs of using hotels around the world which would be obtained by points
- Length of time you intend to use this timeshare

I think that's a fairly simple formula that could easily determine which would be more beneficial, you could have the user select what they would use their points for and have dollar values for the packages chosen to help the person make their evaluation more personalized. Simple dropdown selections would make this a breeze to navigate through.

I'm surprised this does not currently exist given how easy the formula is and how many brilliant minds we have here at TUGGS. If anyone does decide to create it, can I get some credit on the webpage =)

My stab in the dark at the beginning formula would be:
((price difference of buying direct) + (interest paid on diff of buying direct)) - ((price of vacation used booking vacation or hotel w/points) x (how many years you intend to keep the timeshare))

The years portion would have to have a modifier based on #points earned, how often they turned in points, etc.. Anyway, it's a bit more complicated but a good math major can easily tackle this.

Juggy

 

[KathyPet]

Yes Buying from the developer can pay off.
bought MMC platinum in July 1994 for $14750.00 Got the world trip incentive. Can't remember how many points that equaled to but it was a boatload. Get 110,000 points for trading which we have done every other year for the 14 years so that equals 770,000 points which is equal to three of the marriott category 7 night travel packages plus airlines miles.
Called Marriott resales a few months back just to check out the current status of resales for MMC. They will accept my week for immediate listing (no waiting list to sell at this time) and what will I net once they find me a buyer? $14,500! So I am down $250.00 from my original purchase price plus whatever I may have lost over time by not keeping my money in the bank. I am not selling this little jewel anytime soon but just wanted to put this out there for those who say you will never recover costs if you buy from the developer.

 

[Lawlar]

How Many Years Before I have A Profit?

Yes Buying from the developer can pay off.

How many years do you think it will take before we are at a profit on our direct purchase from Marriott? Here are the figures to help you calculate my profitable transaction:

$58,000 for 1 week in Maui.
$1,700 a year MF (which I suspect will go up 10% a year).
12.7% interest on $50,000 loan. [$6,350 a year interest.]
135,000 reward points.
50,000 reward points a year on the loan (we forfeited this "benefit" because we made some prepayments).

VS. [If we didn't buy.]

5% interest on "investment." [$2,900 a year.]
$1,700 a year MF savings.
Less: Aprx. $2,100 we use to pay for a hotel room in Maui (usually less, but I'll pretend we paid this much in defferenct to those who love Marriott).

I suspect that I won't live long enough to see this transaction turn profitable. Maybe my grandkid will reap a profit, if he can afford the MFs.

 

[GaryDouglas]

I've read from a bunch of people with money making experiences from their TS purchase/s and a bunch more that haven't. We've bought a few since 2004 and sold a couple, one we made a few thousand on and the other close to break even (with other tangibles that I won't go into). Others have stated many times and far better than I what the optimum situation is to buy developer from Marriott. That requires being in the right place at the right time and buy the right unit, location and time... a small window that doesn't happen very often, but is does happen.

 

[gmarine]

How many years do you think it will take before we are at a profit on our direct purchase from Marriott? Here are the figures to help you calculate my profitable transaction:

$58,000 for 1 week in Maui.
$1,700 a year MF (which I suspect will go up 10% a year).
12.7% interest on $50,000 loan. [$6,350 a year interest.]
135,000 reward points.
50,000 reward points a year on the loan (we forfeited this "benefit" because we made some prepayments).

VS. [If we didn't buy.]

5% interest on "investment." [$2,900 a year.]
$1,700 a year MF savings.
Less: Aprx. $2,100 we use to pay for a hotel room in Maui (usually less, but I'll pretend we paid this much in defferenct to those who love Marriott).

I suspect that I won't live long enough to see this transaction turn profitable. Maybe my grandkid will reap a profit, if he can afford the MFs.

Your biggest mistake wasnt that you bought from Marriott. It's that you financed it with Marriott. I'm never a fan of buying direct from Marriott but it can work out for some people as long as you dont finance the purchase.

You should look for other options instead of paying 12% on the loan. A good option is a home equity line of credit. Current rates for borrowers with very good credit is around 4.5%.

 

[Lawlar]

Financing Purchase

You should look for other options instead of paying 12% on the loan. A good option is a home equity line of credit. Current rates for borrowers with very good credit is around 4.5%.

I agree with you that financing the purchase of a Marriott TS with their 12.7% loan is unwise. We did it originally with the idea that we would get some extra reward points and then pay off the loan. The sales rep didn't mention the fact that we would lose the points if we made prepayments. We made a few prepayments and then received notice that we no longer qualified for any points (even though there was still a hefty balance on the loan).

Fortunately, this part of the story ends well. We decided to take some profits from Chevron stock we own and pay off the TS loan (at least some good has come from high gas prices. A big thank you to all of you who drive SUVs.).

Still, many people who are "sold" into buying a TS directly from Marriott have no option but to pay the high interest rate. Which tells you something about who Marriott is sometimes selling to (people who can't afford to pay for the TS but get caught up in the sales pitch).

 

[MOXJO7282]

Hi Lawlar,
I've heard you voice your frustration before about the mistake you made buying Marriott and you always seemed to imply buying from Marriott was such a bad move, when the fact is you really contributed to it being a bad deal for you. With all due respect, knowing all the details now, you really made a bad choice in the first place financing at 12% and could be getting much more value out of your usage. And your numbers are faulty IMHO.

First off your 5% return number is unrealistic. That number in reality is a -5% at best in this economy, unless you had all your money in bonds. If it was any type of investment money other than bonds that you had earmarked, then that probably would be a negative number right now. I know all my portfolios are down, one only 3% but another 9%. Historically maybe it will return you money, but in the meantime no. As your return would improve so would your ownership ROI, so your numbers doesn't take everything into account. Financing a TS at 12.7% is crazy to begin with so that is all on you. Also you lowball the rent a week 4 2BDRM would cost you.

Instead of the pitcure you paint, to maximize value and greatly improve ROI I would've
1. Split unit and rent studio for I would suspect $1500-$1700. Use the 1BDRM section valued at $24-$2600
or
2. Split unit and do 1BDRM and studio back to back for 2 weeks in Maui fro price of 1, saving $1800-$2000.

Here is what the ROI would look like for me. I'll even include the 5% for argument sake

$58,000 for 1 week in Maui.
$1,700 a year MF
5% interest on $58,000 [$2900 a year interest.]
135,000 reward points.
75,000 reward points from using 5x Marriott Visa (Mar may have let you use for entire purchase, but atleast a portion)
points value $3000-$4000
Usage Value - spend $0 to -$200 for week in 1BDRM and renting studio

So for a 1 BDRM you paying about $2800-$3000 for the week in the first year, and you own an OF condo on Maui. Every year of usage that $3000 will go down, and you will still own a super OF condo on Maui. At some point maybe 10-15years you will have balanced out your ROI and you will still own a an OF condo on Maui.

I know this is really estimations but my overall point is you could use your unit much better than you have and actually change your dreary picture into a sunny disposition. But notice nowhere in my equation is a 12.7% loan. No creative usage overcomes that overhead element if it is part of the equation.

Regards.
Joe


.

 

[KathyPet]

Lawlar, Not to pile insult upon injury but I must say that buying one week at a timeshare for $58,000 is so beyond my comprehension that the thought of it takes my breath away. However you signed the papers, had the legal # of days to rescind and did not so no one to blame there but yourself.
As far as the MF's are concerned I am sure that they were high when you purchased and you surely did not expect them to decrease.
You also indicated that your salesmen did not tell you that if you made prepayments on your loan you would loose your bonus points benefit. It is not the responsibility of the salespeople to conduct a mini-closing for you to go over all the details of your loan agreement. The information on the loss of the point bonus if you prepaid would have been in your closing documents which you signed.
I have read many of your posts and it is clear that you are very disgruntled with your purchase and feel you were "taken". I am sorry about that but you cannot blame Marriott for your failure to ask questions and understand exactly what you were getting and signing up for.

 

[Lawlar]

You are Right

Lawlar, Not to pile insult upon injury but I must say that buying one week at a timeshare for $58,000 is so beyond my comprehension that the thought of it takes my breath away. However you signed the papers, had the legal # of days to rescind and did not so no one to blame there but yourself.

I agree. I have posted a few times that I was temporarily insane when I did this. No one to blame but myself (not even my wife who wouldn't let me send in the recission notice after I prepared it - If she and the grandkid want to stay in the TS on Maui I guess I owe it to them even if I feel a bit stupid for having done so.]

Joe: Thank you for your calculations. I'm still trying to get those figures to make sense (I haven't had my coffee yet).

I think the best argument in favor of buying from Marriott is for someone who is 30 (I'm 59) who has a high income and lots of assets and wants to take her family to Maui every year and actually will do so. Then, if money isn't an issue, the family trips might make sense. I am skeptical that the purchase can be justified by the numbers.

 

[MOXJO7282]

Joe: Thank you for your calculations. I'm still trying to get those figures to make sense (I haven't had my coffee yet).

I think the best argument in favor of buying from Marriott is for someone who is 30 (I'm 59) who has a high income and lots of assets and wants to take her family to Maui every year and actually will do so. Then, if money isn't an issue, the family trips might make sense. I am skeptical that the purchase can be justified by the numbers.

Hi Lawlar,
If you can begin to split/rent/use your week, then indeed the purchase can have a positive ROI, even with the big purchase price, your ROI is just longer.

If you can get a 1BDRM OF week in Maui with your costs offset or eliminated by renting your OF studio, then there is your ROI. Same is true if you can get 2 weeks out of ownership for the price of one week.

This aspect of owning a Maui 2BDRM LO to split to use/rent is what got me into the TS world and I must admit this approach has exceeded my expectations. Back when I made my major investments, points were plentiful, I received over 500K for both of my Maui purchases and purchase price was much lower, so my method of splitting to use/rent combined with a decent initial investment scenerio gives me a strong ROI.

If you can start to use this approach, you too can develop an ROI, alas not quite as accelerated as someone who received better value up front, but a ROI nonetheless.

Unfortunately if you tell me you need the 2BDRM every year, then my friend your ROI is very weak, and I would suggest holding the unit until the economy turns around, sell and become a renter. In the long run that would be the better plan, if you can't extract the value I am describing.

Regards.
Joe

 

[KathyPet]

Lawlar, I understand the temporary insanity defense. I am 60 and have done some dumb moves myself like the $145,000 lot that we purchased in Riverbend (part of Sun City in Bluffton, SC) intending to build a house on it and retire there. That was before my husband decided he was not ready to retire so we moved to a active adult community in the Shenandoah Valley near Front Royal Va about 45 minutes from our prior home in Loudoun County. Now we love it here so much that they will never get me out of this community so we now have this lot that we bought at the peak of the real estate market that we can't get anything close to what we paid for it back. Thank heavens we do not have a immediate need for the money so we are holding on hoping that the market will revive in a few years and we can at least break even. In the meantime we pay HO dues, property taxes and just last week we were notified by the HOa that we have dead trees that we have to pay someone to cut down and remove. More money down the pit! As that great philosopher Rosanna Danna Danna said "It's always something"!

 

[Lawlar]

We'll Simply Enjoy It

Hi Lawlar,
If you can begin to split/rent/use your week, then indeed the purchase can have a positive ROI, even with the big purchase price, your ROI is just longer.

If you can get a 1BDRM OF week in Maui with your costs offset or eliminated by renting your OF studio, then there is your ROI. Same is true if you can get 2 weeks out of ownership for the price of one week.

This aspect of owning a Maui 2BDRM LO to split to use/rent is what got me into the TS world and I must admit this approach has exceeded my expectations. Back when I made my major investments, points were plentiful, I received over 500K for both of my Maui purchases and purchase price was much lower, so my method of splitting to use/rent combined with a decent initial investment scenerio gives me a strong ROI.

If you can start to use this approach, you too can develop an ROI, alas not quite as accelerated as someone who received better value up front, but a ROI nonetheless.

Unfortunately if you tell me you need the 2BDRM every year, then my friend your ROI is very weak, and I would suggest holding the unit until the economy turns around, sell and become a renter. In the long run that would be the better plan, if you can't extract the value I am describing.

Regards.
Joe

Joe: I enjoy reading the posts of those who have successfully "invested" in TSs. They are really interesting. It shows that there are many ways to succeed in life (and many of those ways have nothing to do with finances).

We intend to use the Maui TS every year. I've told the 7 year old grandkid that he gets the lock-off as his own and he'll get to enjoy surfing lessons every year. When I go to that courtroom in the sky (sounds like purgatory), then the grandkid will get the TS and, hopefully, he'll be able to profit from its use and/or sale.

 

[pwrshift]

... have done some dumb moves myself like the $145,000 lot that we purchased in Riverbend (part of Sun City in Bluffton, SC) intending to build a house on it and retire there. That was before my husband decided he was not ready to retire ..."!

Kathy...DaveM might want to buy it from you with all his MR points.

Brian

 

[wa.mama]

People buy direct for different reasons. I can come up with 7 easily:

1. Brand new resort just open up for sale
2. High demand fixed week
3. Special deals, such as the 50/50 program
4. MRPs given at closing
5. MRP trade option
6. Convenience
7. Financing

Each purchaser must evaluate the offer according to their own needs. Items 1 - 4 could be persuasive for me; while 5 - 7 are not. Others may very well reach a different conclusion.

Very succinctly stated. We've purchased 2 non-marriott resale, and 4 marriott developer (using points 1-6 stated above). You have to decide what works for you. Gather your information BEFORE going in to the sales presentation. Know what your long-term plans are - I also agree with the poster who mentioned that in the future, as retirees, the points do bring about the hotel package possibilities. Right now, with the 3 kids, I can't imagine staying in a hotel, but hopefully that day will come