Owner Update: How we upgraded and got HGV Max

[Nowaker]

We were also told that Hawaii may have better resale value in the future, but who knows if that is true.

Not true at all. The only resorts that could potentially have a better resale value in the future are 2 BRs (or larger) in ski resorts with Christmas/NYE fixed weeks, but it would take decades before the market value catches up with the overinflated retail price it's sold for. If you're paying a 3x premium for going retail, and assuming an average annual appreciation of 5%, that's 22 years to catch up. As of year 23, you'd technically sell for more than you paid, but don't forget about the inflation. At an average inflation rate of ~2.5%, that money is worth only 57% of what it was originally worth. So in reality, you're still far away from a goal of "better resale value". Your 5% appreciation in real estate must now catch up with the 2.5% inflation. Another 20 years before it breaks even.

x = resale value appreciation rate (assuming 1.05)
y = average inflation rate (assuming 1.025)
z = average appreciation without inflation (1.05 - 0.025 = 1.025)

r = resale market value
3r = retail price (assuming 3x the price of resale)

b = number of years to break even (the point after which "better resale value in the future" is true)

3r = rz^b
b = ln(3) / ln(z)

So, as expected, the resale value is eliminated from the equation.

b = ln(3) / ln(1.025) = 44.5 years.

It will take 44.5 years to break even. After that point, you will start realizing the promise of "better resale value in the future", at a 2.5% rate every year.

Now, be aware I assumed a very conservative 3x premium on paying a retail price. It's probably closer to 5x. ln(5) / ln(1.025) = 65 years, if it's 5x premium.


If you're interested in resale values, LEGO sets are a better investment, with an average appreciation value of 11% per year. The buy-in cost is your first year's appreciation (it will be spent on sales tax), year two and beyond is pure appreciation.

 

[bogey21]

We attended on Friday, but we are not going to rescind. We believe what we have now is better for us than what we had before.

If you are happy, that is all that matters...

George

 

[natarajanv]

I don't know about 2019 prices, Max, or Kool aid. I do know OP has spent $47,000 for about 10,000 old annual points, which are available for about $10,000 or less in Vegas deeds with MF around $1500 total. Even with all the bonus points, that puts the cost of Max at ~$25,000. That's for six month access to DRI resorts, and six month access to DRI is of unknown-questionable-dubious value.

It seems like a lot. Not completely crazy, but high. I would want to know exactly what I was getting for my $25,000 - exactly what kind of availability at which resorts Max gets me - before upgrading to retail and then to Max.

I believe it is 10080 new points (6300 old points)

 

[Nowaker]

If you are happy, that is all that matters...

Yes, totally agreed.

Just don't base your happiness on false promises. Know the facts and numbers. Because if you learn the facts and numbers later, happiness will shatter.

 

[Hobokie]

Yes, totally agreed.

Just don't base your happiness on false promises. Know the facts and numbers. Because if you learn the facts and numbers later, happiness will shatter.

Agree with @Nowaker and the OP still has time to rescind! Also agree with @bogey21 , but maybe the “happiness” is coming from a place of “we think we’re better off with this upgrade” when in fact, once the numbers are crunched the OP might realize she is not better off…

 

[frank808]

We have always paid reservation fees, even after purchasing BHC.. $59 per booking. But we were not staying at our home property... perhaps that is why? Also keep in mind that we did not upgrade to Max for the waived reservation fees. The take-away for us was doubling our deed/point value and expanding the resort portfolio.

Hmm I added a bHC property just so that I would have the All Inclusive reservation fees. I have not paid a reservation fee for at least 2 years. It has been a great money saver for us. Plus I can cancel within 31 days and not loose my reservation fee.

We own around 62000 HGVC points and 12400 bHC points preconversion. Because we were spending $800+ in reservation fees annually, we acquired a bHC to save on that. All deeds are platinum except one gold bHC deed. We spent about $12K total to buy (includes closing and HGVC enrollment fees) these deeds. Last HGVC deed was purchased around 2010. While the bHC deeds were just acquired a couple years ago. If doing it again, I would buy at the Boulevard as the MF ratio is better than the Kohala properties we own now. I guess, what I am trying to say, not rush in and be methodical with a TS purchase. Especially when being promised some unknowns.

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[CalGalTraveler]

@JillAndrea Please consider rescinding while you have time. There is no rush to buy this upgrade (Max and the upgrade will still be there if you buy a month or two from now) but you have only ONE chance to rescind or be stuck with your decision.

There is nothing wrong with wanting to research your options. You can pull the trigger later if you still want this deal.

Take it from someone who has been there. We bought retail on our first deal and augmented it with resales. I am still kicking myself after many years by how much we overpaid for retail. Our unit is worth pennies on the dollars we spent and it is prime real estate. HGVC is doing nothing for ROFR to support the value. I see Hawaiian resales at newer resorts going for a fraction of retail. They will do the same to you once they start their next project.

No doubt you can afford it (we can too) however once you realize the resale prices you will see why. If you go through with this you have effectively paid $47k for a 10,000 deed plus access to a Max program with no benefits in writing. You already have free reservations with your bHC (if you use your benefit and enroll) you already have Gold Honors status too. You can always buy MAX if you find value for DRI because you already qualify with your existing deed.

Of course this is your money. Some people pay a premium for cars some like 1 year dealer certified for the same car. YMMV as to what makes you happy and sleep at night. If you could buy that Mercedes for a fraction of the price wouldn't you want to at least evaluate that route before you buy?

 

[escanoe]

@JillAndrea

Welcome to TUG! Some of us have strong feelings and are passionate about certain views or beliefs. I appreciate that diverse views are represented here and that not everyone sees everything the same way. While we may have some rough edges, this is one heck of a place to learn how to get the most out of any timeshare and to learn the ins and outs of the systems.

 

[CalGalTraveler]

@JillAndrea Did they disclose to you the fact that OT is being developed and the MF *May* be subsidized? Check their docs because the fees may increase dramatically once they sell out and move to their next project.

Recommend to take your time, rescind and research this.

 

[youppi]

If 1:1 then 1.6x is a significant devaluation of the HGVC points system relative to DRI because most Diamond owners will have 1.5x the number of points. 15,000 DRI 1 bdrm or 2 bdrm non peak vs. 11, 200 (old 7000) or 15,360 (old 9600).

What is the average number of points owned by a DRI owner?

Max is sounding like a great deal for DRI (if they don't have significant buy-in price) and not so good deal for HGVC owners unless they have a lot of points to burn. This is all conjecture so need to learn more.

I don't know about other collections but in the HI Collection, the average was 20k points in 2019 as per the data I extracted from https://owners.diamondresorts.com/w..._25_CSH_Annual_Meeting_Presentation_final.pdf

 

[Mongoose]

I don't know about other collections but in the HI Collection, the average was 20k points in 2019 as per the data I extracted from https://owners.diamondresorts.com/w..._25_CSH_Annual_Meeting_Presentation_final.pdf
View attachment 51495

That also means the average MFs are $3846, Yikes as of 2019. More like $4,500 in 2022.

 

[youppi]

That also means the average MFs are $3846, Yikes as of 2019. More like $4,500 in 2022.

Not $4,500. ~$4,000 in 2022 for 20k points
see https://docs.google.com/spreadsheet...eK7b2lFwXV-U4W9W3hMcAiNbej8gAmOvP5YG/pubhtml#

 

[Nowaker]

~$4,000 in 2022 for 20k points

Ooooowwww *bleep*, $0.20 MFpp. That's not much better than Elara Studio Gold - at $0.26 MFpp, and equal to Elara Studio Platinum - $0.19 MFpp. Wow, that's really really bad.

I'm sitting at an average of $0.102 across all my properties, and these all deeds cost me only $14,872.70 to acquire. Three of them were free - two only came with closing costs, and one had closing costs covered. (Overall, Platinum deeds are better, but if you acquire LV Gold packed with points for free, it pays for itself even with subpar MFpp. You can offload a deed at a later point anyway)

 

[Mongoose]

Not $4,500. ~$4,000 in 2022 for 20k points
see https://docs.google.com/spreadsheet...eK7b2lFwXV-U4W9W3hMcAiNbej8gAmOvP5YG/pubhtml#

I was avg 5% per year in increases. Looks like they have managed better than that a few years. Still I pay $.14 for HGVC Bay Club. That's a 40%+ premium for DRI.

 

[CalGalTraveler]

@youppi Thanks for sharing. Wow! This floors me. (correct me if I am wrong) $4000/week in MF for 20k points to stay in 2 bdrm P@P in HI? That's close to rental rates but with the obligation.

It sounds like HGV opted to stabilize the costs across both communities making it slightly higher but not equal. This will incent DRI owners to swap for HGVC deeds in sales offices to get better MF/Pt value.

Unfortunately, this is a devaluation of HGV points. There is no way I would spend 20k HGVC points to go to DRI Hawaii in a 2 bdrm when I can spend 10500 -15,000 points with HGVC for same. (or $2800/week at our Westin Oceanfront next door to KBC. $1400/week in OF Maui if we lock it off and stay 2 weeks.)

With 6 months DRI, plus we already have AI and Gold with bHC. I am questioning the value of MAX.

 

[GT75]

I agree with you @CalGalTraveler. I already have no desire to spend the required large number of points for some of the newer HGVC resorts such as Crane, Las Pacifica, & Maui Bay Villas.

 

[Nowaker]

spend the required large number of points for some of the newer HGVC resorts such as(...) Maui Bay Villas

That being said, 2 BR in Maui is pretty dope. Very spacious, great furniture, good location, and the best pool I've seen to date at any HGVC (see my pics and review: https://tugbbs.com/forums/threads/h...br-ada-unit-resort-pool-pics-56-total.335062/). For its 20,160 pts cost, it's still quite expensive, but it's definitely worth more than the "standard" 11,200 pts. I'd say 15,000-ish would be a fair value, and the +25% premium is for the only HGVC on Maui. I'm not expecting a lot of availability even after they've finished the whole project.

 

[GT75]

For its 20,160 pts cost, it's still quite expensive, but it's definitely worth more than the "standard" 11,200 pts. I'd say 15,000-ish would be a fair value, and the +25% premium is for the only HGVC on Maui.

Here are my examples:

Maui Bay Villas

Sunrise Lodge


Now, you have been to Maui Bay Villas and I have seen your review. I haven't so have only looked at the pics. I am really not impressed. I certainly can obviously be wrong but I don't understand the point requirements. (btw, I have been to Sunrise Lodge many times).

 

[letsgobobby]

Ooooowwww *bleep*, $0.20 MFpp. That's not much better than Elara Studio Gold - at $0.26 MFpp, and equal to Elara Studio Platinum - $0.19 MFpp. Wow, that's really really bad.

I'm sitting at an average of $0.102 across all my properties, and these all deeds cost me only $14,872.70 to acquire. Three of them were free - two only came with closing costs, and one had closing costs covered. (Overall, Platinum deeds are better, but if you acquire LV Gold packed with points for free, it pays for itself even with subpar MFpp. You can offload a deed at a later point anyway)

View attachment 51504

True but not an apples and apples comparison. It would be understandable if Hawaii properties had higher MF/point in DRI as they do in HGVC. Some of us are happy to pay those because we get first dibs on reservations during the home week booking window.

Many HGVC HI are 15 cents/point. That's a great deal to me. Now DRI is 1/3 more than that but they have some locations HGVC doesn't, and what would that be worth? If I really wanted to go to Maui every year, 20 cents doesn't seem insane.

 

[CalGalTraveler]

To add to @GT75 points: Assuming at 3 Bdrm Maui at .10 /pt that's $3840/week in points. That is not even Oceanfront (best is across the road). At .15/point (Vegas) that's $5760/week!

At .10 still good value compared to renting but when you compare to the resale true Oceanfront Westins on Kaanapali up the island at $2400 - $2800/week MF for a 2 bdrm. It makes you wonder. Note Westins are only 2 bdrm units so smaller than 3 bdrm so would expect some difference but a big difference if your points cost basis higher.

 

[Nowaker]

At .15/point (Vegas) that's $5760/week!

MFpp of Vegas 2 BR Gold Blvd/Paradise, Studio Platinum Trump, or 1 BR Grand Elara deeds is $0.12. Whereas 2 BR Platinum is $0.10 (Flamingo) or a little lower than that (Paradise/Boulevard). $0.15 must be some subpar deeds that aren't even worth looking at, given 2 BR Gold Blvd/Paradise can be had for not much, often for free if you look around.

 

[NiteMaire]

@youppi Thanks for sharing. Wow! This floors me. (correct me if I am wrong) $4000/week in MF for 20k points to stay in 2 bdrm P@P in HI? That's close to rental rates but with the obligation.

Or you can purchase 2BR LO at Sedona Summit and use DeX to trade into 2BR at P@P for 2 weeks with the following views:
Garden View/partial ocean view: $1478 total ($739/week)
Ocean View: $1928 total ($964/week)
Ocean Front: $2378 total ($1189/week)

 

[SmithOp]

So I'm wondering if HGV will shut DRI resales out of DEX without a developer purchase like what is happening with HGX Max...

When discussing MFpp are we all using the new point values now? Mine has dropped down to 8 cents, but obviously it doesn't affect my weekly cost.

I was just looking at open season rates, there are a ton of Grand Islander nights available at decent rates compared to points, must be nice for Hawaii resident members...

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[Mongoose]

@youppi Thanks for sharing. Wow! This floors me. (correct me if I am wrong) $4000/week in MF for 20k points to stay in 2 bdrm P@P in HI? That's close to rental rates but with the obligation.

It sounds like HGV opted to stabilize the costs across both communities making it slightly higher but not equal. This will incent DRI owners to swap for HGVC deeds in sales offices to get better MF/Pt value.

Unfortunately, this is a devaluation of HGV points. There is no way I would spend 20k HGVC points to go to DRI Hawaii in a 2 bdrm when I can spend 10500 -15,000 points with HGVC for same. (or $2800/week at our Westin Oceanfront next door to KBC. $1400/week in OF Maui if we lock it off and stay 2 weeks.)

With 6 months DRI, plus we already have AI and Gold with bHC. I am questioning the value of MAX.

I’m not sure it devalues HGVC. There won’t be much availability at 6 months.

 

[Hobokie]

I think we lost the OP @Grammarhero dow we only keep track of our wins (owners saved and having rescinded on time?)or do we also count “our failures”?