Marriott Grand Residence Club at Lake Tahoe

[SnowDogDad]

Hi everyone,
First, I'm a newbie here, so I apologize if I'm duplicating something or misposting. I read the rules and searched through some of the history to see if I was on the right track or not.

We are seriously considering purchasing a fractional (13 weeks) at the Marriott Grand Residence in Lake Tahoe. We love the property and the location, but would probably use it no more than [2] weeks out of the year. We would try and rent the unit out as much as possible the other 11 weeks to try and recoup some of the mainteance fees and taxes. We understand this is not a money-making venture and would, at best, hope to come close to breaking even on the best of years.

We have visited the site, talked to the site realtor at length, talked to a 3rd party management company, AND a few other owners. We still like what we are hearing and this seems to be a good time to buy.

Does anyone have any advice that they could offer a timeshare/fractional newbie? Especially on this property.

Thanks much,
Jim

 

[DeniseM]

My advice is to buy one week next door at the Marriott TS on the same property and try it out for a year or two, without a big commitment. I wouldn't even buy 13 weeks in Heaven in this economy! There are zero guarantees that you will be able to rent or even break even if you have to sell, so I wouldn't do it. I would give you zero chance of breaking even every year in this economy.

A bit more info. - Tahoe travel is very depressed right now and there are two huge condo projects that have gone bankrupt, and one of the biggest casinos is getting ready to close. I don't think the Marriott is in any danger of that, but you could certainly lose everything you put into this. We go to Tahoe every 2 or 3 months and have a TS there that we rent, and the rental market is very poor right now, with no improvement in sight. We were up there for President's Weekend, which should be the biggest ski weekend of the year, and things were just not very busy - every hotel/motel had empty rooms.

If you have money to burn and you can buy this and not expect to make a cent off of it, the price is probably really low right now - but the question I'd ask myself is what would happen if you had to sell it and couldn't? Are you prepared to take a total loss? That's the worse case scenario.

Good luck!

 

[Robert D]

We own two summer weeks at Timber Lodge next door and really like it. However, Grand Residences is a lot different. Most all of the units at TL have a similar floor plan but that's not the case for GR as there are many different configurations of units and none have a washer/dryer in the unit. They let us go thru a couple year before last when we were at TL and some had very strange layouts. So, I'd be careful about what you buy and make sure the floor plan works for you. TL is set back pretty far from the highway but GR is built a lot closer to the highway and I think highway noise could be a factor so I would want a unit that's not close to the highway. Also the pool at TL is much larger than GR. When you say you're talking to the site realtor it sounds like you're talking to a salesman for Marriott. My guess is in this economy you can buy 13 weeks at a huge discount from what Marriott sells them for - I bet a lot of people would like to get out from under the maintenance fee. My understanding is that when you buy a fractional unit you get both high season and offseason weeks. I wouldn't want any offseason weeks and if those are the weeks you're planning on renting I think you'll find that you won't get much for them (must less than the maintenance fee for those weeks) as Interval rents offseason getway weeks at TL (and maybe also at GR) really cheap. I second Denise's recommendation of renting at TL or GR first before taking the plunge.

 

[Dave M]

On a related note, there is a resale, which is the same product that Marriott wants to sell you, for sale on Redweek.com for $79,000. By the time you get to stay there, many others will have already stayed in your unit. That $79,000 is the asking price. Thus, the eventual sale price, if it sells, will likely be considerably less. How does that compare with Marriott's fixed price?

As Denise recommends, take your time before spending the big bucks. Learn as much as you can and decide whether this is really for you.

 

[DeniseM]

When you say you're talking to the site realtor it sounds like you're talking to a salesman for Marriott. My guess is in this economy you can buy 13 weeks at a huge discount from what Marriott sells them for - I bet a lot of people would like to get out from under the maintenance fee.

Good point Robert - if you are buying from Marriott, you are paying top price. Before you go a step farther, look around at resales that aren't through Marriott.

*There you go! Dave's got your Comp!

 

[fleming4]

Some nice aspects to MGRC

Jim,

As an owner of two quarter-shares at MGRC, I am biased towards the place. It is a beautiful property in a great location. In contrasting MGRC with TL next door, TL has the advantage of having washers/dryers in the units. MGRC does not, but has free laundry rooms scattered throughout the building (not as convenient). However, MGRC has several things TL does not, including somewhat nicer and upgraded furnishings in the units, a full service spa on-site including wet and dry saunas, and two large exercise rooms. At MGRC, your weeks are fixed in advance (though they vary from one year to the next) and you are always in your own unit, so there is never any scrambling to call in at 9 am Eastern Time 12 or 13 months ahead to try get a good ski week. Another nice factor is the concierge for MGRC and TL is located in MGRC, and I personally like to work with the concierge in person rather than by phone. You can see the menus at the restaurants, have directions pointed out on the map, etc. While everything in Heavenly Village is readily accessible from TL, the village really is clustered around the Grand Residence Club, making it a little easier to walk to the shops, restaurants, galleries, and movie theater. TL, on the other hand, is closer to the casinos. Finally, MGRC seems a bit more "finished" and upscale than TL, though TL is a great property.

So, what does one do with all those weeks, you may ask? Of your 13 weeks, you can trade one for points. If you're staying for 2 weeks, that leaves 10 more. In my experience our units rent out about 40% of the time in the current market. That would leave you roughly 6 weeks. MGRC weeks are great trading weeks and we have done many trades very easily, so you're pretty well set for vacations. We're thinking of starting to trade in some weeks to get cruise deals through II, though we haven't done that yet. Our kids and relatives use some of the weeks, which is nice.

As far as the finances, the rental income does not cover the management fees and property taxes. But this is a good time to buy. From everything we have heard, the market right now is at or close to the bottom and 13 weeks at MGRC are selling at bargain basement prices. We have contemplated sellling one of our units, a 1 BR/2 BA on the fourth floor, and have been told by the on-site real estate agent it would go for about $90,000. Divide that by 13 and you get an average weekly price of roughly $7,000. Marriott is no longer doing resales at MGRC and they have turned all unit sales over to a local company which has an office in the lobby. So there is no difference between Marriott's price and the resale price. While it will likely take time (years) for prices to go up, I doubt they will go down much from here.

If you really only plan on staying in Tahoe for 2 weeks a year, and the benefits you can gain from the other 11 weeks don't sound that attractive, then I agree it makes more sense to buy 2 weeks at TL. Just be prepared for the challenge of calling in 13 months ahead to try to reserve the weeks you're interested in. Good luck on your decision.

 

[SnowDogDad]

I appreciate everyone's input. We were actually in Lake Tahoe the President's day week. I found it more crowded than the same time last year, but still off from previous years. We stayed down the street at the Embassy Suites. I like both the TL and the MGRC, but I like the option of more weeks per year. Plus, I feel like we are seeing some very good deals on the property. Far better than when Marriott was selling and even far better than the resale market from 2 years ago. The purchase price does not scare me too much, but I would like to recover about 60% of the HOA fees every year.

 

[DeniseM]

I guess I don't understand why you want to buy 13 weeks, if you can only use 2, and you are going to take a loss on the other 11 weeks? If you only need 2 - buy two and skip the hassle of renting (renting to the public involves some time and work and hassle) and the money you are going to lose on the weeks you don't need.

If you think you will be able to sell this for a profit someday, I think that's a losing bet.

 

[fleming4]

Jim,
Rentals will probably cover 40-60% of the management fees. Your property taxes are separate from the management fee, so keep that in mind. The agent you work with should be able to give you a pretty good estimate of the management fee and property tax that would currently apply to whatever unit you are looking at. You of course need to factor in that those go up each year.

Denise,
I let Marriott handle arrange all the rentals, so I spend no time on that. I know I could do rentals myself and probably generate more income, but I don't want to spend the time on it. As I said in the prior post, Marriott rents out about 40% of the weeks we ask them to rent.

In my prior post, I mentioned a number of usage advantages to MGRC that don't apply at TL. Three others: (1) You can choose to stay as many days in your designated weeks as you want, and rent out the rest. You don't have to do the upgraded II status to do this, and you have complete control over what days to occupy and which to rent. (2) You can stay at MGRC anytime you wish in any unit on a "space available" basis with no fees involved, just paying the end-of-occupancy cleaning fee. This means you can go there essentially any time, regardless of whether it's your designated week. The "space available" program does not work if the building is mostly occupied (I think the figure is about 90%). For us, living 3 hours away, this is a great advantage compared to if we had bought at TL, since we can almost anytime, on short notice, zip up to Tahoe for the weekend for a nominal cleaning fee. (3) Owners at MGRC have a dedicated member services staff who are easily available by phone or email and who treat MGRC owners like royalty.

So, comparing MGRC to TL cannot just be done by looking at 2 weeks vs 13 weeks. Besides the facility advantages I mentioned in my first post, owners at MGRC have a lot of options for their weeks and for their usage that owners at TL do not have. Marriott clearly wants to give quarter share owners an upgraded experience.

Now whether the advantages of MGRC would be as helpful for someone living in Hawaii as they are for someone living a few hours from Tahoe, it is hard to say. MGRC also has 3 week and 5 week ownership options, and those may be worth looking at.