Premium of 7K worth it over deals @ 5K

[PenguinTS]

So everyone agrees you want the most points for the MFs paid so stands to reason you should aim to get the PLT over the GLD weeks (for the same size) since the MF will be the same.

But is the up-front premium of purchasing a 7K (PLT 2BD) worth it over 5K (GLD 2BD)?

Looking up some current sales at Flamingo as reference points (each MF of $805):
5K - $5,500 @ $1.1/pt
7K - $13,500 @ $1.9/pt

Working the math, the break-even of the 7K upfront cost is around 18yrs.

When people are making TS purchases do people really think that far out? 18yrs is a really long time and a lot of things could change.

So seems the great bargins at 7K are no longer around, so does it mean shouldn't consider it? $5K seem to be better bargain (short-term) and easier to swallow.

Guess one theory is that 7K will retain it's value longer-term, if we go out 10 yrs, then point dilution will make 5K not as valuable so could further erode while 7K may still retain some good value if there's an exit strategy to do then.

For folks starting out in HGVC what's the recommendation?

Thoughts?

TIA!

 

[newportbeach]

Factor in the Season you want to Travel.

Common sense says buy the Season you want to travel in. If I am saving up front costs I would consider Gold Season, but only after I determine that I like that time of year to travel. For example, HGVC in Waikolao has Gold Season and I find that I love to travel usually in May or late Sept/Oct, great weather and less crowded. HGVC deals in points so even if I bought Platinum I might still travel in Gold, take 25% savings say 5000 instead of 7000 pts and use those 2000 extra points for another 3 extra days. I have managed to do the same for years with Marriott before the Destination Club. I enjoyed the White Season dates, and if not I traded for Red Season within Interval. Oh yes for 25 yrs, I found white season traded for red season provided you requested several date options far enough in the future. But say for example, you only want to travel during the Platinum season to Las Vegas, then whether it is HGVC or Marriott secondary market, you better buy just the high season. Another good example is that your vacation schedule is not flexible or you travel with kids
so Christmas Vacation is critical.

 

[barond]

using a formula (($upfront / $years) / $points) + ($mf / $points)
is what I do to see if it is worthwhile.

The biggest factor is what is your ROI. Do you want to factor it over 10 years, 20 years, 40 years.

I had been doing 40 years which would be

(13500 / 40) / 7000) + (805 / 7000) = 0.163
vs
(5500 / 40) / 5000) + (805 / 5000) = 0.1885

which correlates platinum is better than gold

but if you use 20 years (not an unreasonable return)

(13500 / 20) / 7000) + (805 / 7000) = 0.211
vs
(5500 / 20) / 5000) + (805 / 5000) = 0.216

which makes platinum vs gold marginally the same
but then you have to factor in the use.

5000 converts to a 2 bedroom RCI 1 week (200 points left over)
7000 converts to a 1 bedroom RCI 2 weeks (200 points left over)

and what if you decide you want 4800 points for a 2 bedroom 1 week at RCI is valuable
then compare a 4800 platinum 1 bedroom

(7000 / 40) / 4800) + (665 / 4800) = 0.175
and
(7000 / 20) / 4800) + (665 / 4800) = 0.211

vs
(5500 / 40) / 5000) + (805 / 5000) = 0.1885
and
(5500 / 20) / 5000) + (805 / 5000) = 0.216

making platinum a slightly better value if you are looking for 20+ years usage.
If you are not thinking long term then the lower priced ones might be better.

I personally own a EOY 2400 point siliver 1 bedroom $600 mf EOY.
It works for me I didn't know any better and bought developer. But If I had I probably would of bought the same just at resale. I like to go open season & rent via RCI.

Baron

 

[Bill4728]

IMHO, Clearly 18 years is way too long to consider the lower MFs to pay back the higher purchase price BUT if you will often want to travel during a a time or in a unit size that means you'll need 7000 pts (vs 5000) then it makes sense to buy the platinum week and get the pts you'll need.

 

[RX8]

using a formula (($upfront / $years) / $points) + ($mf / $points)
is what I do to see if it is worthwhile.

The biggest factor is what is your ROI. Do you want to factor it over 10 years, 20 years, 40 years.

I had been doing 40 years which would be

(13500 / 40) / 7000) + (805 / 7000) = 0.163
vs
(5500 / 40) / 5000) + (805 / 5000) = 0.1885

which correlates platinum is better than gold

but if you use 20 years (not an unreasonable return)

(13500 / 20) / 7000) + (805 / 7000) = 0.211
vs
(5500 / 20) / 5000) + (805 / 5000) = 0.216

which makes platinum vs gold marginally the same
but then you have to factor in the use.

5000 converts to a 2 bedroom RCI 1 week (200 points left over)
7000 converts to a 1 bedroom RCI 2 weeks (200 points left over)

and what if you decide you want 4800 points for a 2 bedroom 1 week at RCI is valuable
then compare a 4800 platinum 1 bedroom

(7000 / 40) / 4800) + (665 / 4800) = 0.175
and
(7000 / 20) / 4800) + (665 / 4800) = 0.211

vs
(5500 / 40) / 5000) + (805 / 5000) = 0.1885
and
(5500 / 20) / 5000) + (805 / 5000) = 0.216

making platinum a slightly better value if you are looking for 20+ years usage.
If you are not thinking long term then the lower priced ones might be better.

I personally own a EOY 2400 point siliver 1 bedroom $600 mf EOY.
It works for me I didn't know any better and bought developer. But If I had I probably would of bought the same just at resale. I like to go open season & rent via RCI.

Baron

While it might be wise to amort the initial purchase price down to zero, the likelihood is that the platinum 7,000 point is going to be worth more than the gold 5,000 when it comes time to unload, recouping some of that purchase price. How much more? No one knows. Maybe HGVC will still be exercising ROFL.

One other factor, which you pointed out, is that the platinum owner will be spending 2,000 EXTRA points in vacation year after year. How much is that worth?

 

[PenguinTS]

Thanks everyone for the feedback! This board is a huge resource!

Common sense says buy the Season you want to travel in. If I am saving up front costs I would consider Gold Season, but only after I determine that I like that time of year to travel.

Even if I want to only travel GLD season, long-term (20+yrs) buying PLT would be a better value - right?

So think it's more a decision if I think this is a long-term commitment or something I'll just play with and get out in 5 yrs.

But say for example, you only want to travel during the Platinum season to Las Vegas, then whether it is HGVC or Marriott secondary market, you better buy just the high season. Another good example is that your vacation schedule is not flexible or you travel with kids
so Christmas Vacation is critical.

But doesn't LV and Orlando (which I understand both have the lowest MF) have lots of overcapacity? Even if I weren't PLT, would it still be that hard to get into with just regular club reservations at the 9mo mark? I do agree for HI having the "home court" advantage of 12mo helps. But really that true for LV and Orlando?

using a formula (($upfront / $years) / $points) + ($mf / $points)
is what I do to see if it is worthwhile.

The biggest factor is what is your ROI. Do you want to factor it over 10 years, 20 years, 40 years.

I had been doing 40 years which would be

but if you use 20 years (not an unreasonable return)

making platinum a slightly better value if you are looking for 20+ years usage.

If you are not thinking long term then the lower priced ones might be better.

Baron

If we're doing a complete analysis would also need to factor in the opportunity cost of the money that it tied up in the PLT up-front ($8K) which I could go and do something else with.

But on the flip side you have those extra 2K pts to offset that... so probably a a toss up and you could argue it done correctly the 2K pts makes up for the opportunity cost of the $8K

While it might be wise to amort the initial purchase price down to zero, the likelihood is that the platinum 7,000 point is going to be worth more than the gold 5,000 when it comes time to unload, recouping some of that purchase price. How much more? No one knows. Maybe HGVC will still be exercising ROFL.

So is it more likely that HGVC would exercise ROFR (BTW: It's ROFR right? Isn't ROFL this :hysterical: ) for 7K than 5K -- right? So that also favors that the 7K has a higher probability to retain value if you offload (even if the time horizon is less than 10yrs). Giving another reason to purchase 7K over 5K *IF* we assume ROFR.

But let's say there's NO ROFR happening when it's time to unload and all pts are just $1 for discussion purposes.

If unloading 7K - Loss would be $6,500 (13.5-7)
If unloading 5K - Loss would be $500 (5.5K-5K)

But let's say 7K would never go to say below 10K, still looking at $3.5K loss when I unload (before the 20yr mark).

So seems that PLT would only win on an early exit (<20yrs) if ROFR is still happening if NO ROFR seems there's much more risk on purchasing PLT than GLD right now.

IMHO, Clearly 18 years is way too long to consider the lower MFs to pay back the higher purchase price BUT if you will often want to travel during a a time or in a unit size that means you'll need 7000 pts (vs 5000) then it makes sense to buy the platinum week and get the pts you'll need.

This makes sense to me. Buy PLT if you need to travel that time and need that unit size. Maybe overanalyzing this too much, where HGVC units seem to still retain value so even if I unload one or the other the different in price probably won't be too great.

Maybe one strategy is to get a buy-in "start kit" that seems to be 4800 or 5000pts and play with the system and see if I like it. If I really like it then go back and trade it in for 7K or just purchase an additional 7K later. Looks that 7K is aggressive ROFR right now, so they aren't moving down in price for awhile anyways. Did think about just renting, but to really "test" the system think you need to buy-in, especially if I want to see how good "open season" works and how well RCI trading is which can't do if I just rent.

Second part...
What is the typical time horizon when purchasing a TS? They say in the FAQ/Guides you must remember that a TS is long-term and you have recurring bills. But for purchasing analysis how long do people think they will hold onto their TS? What's the reality? I know the sales folks talk about giving them away for generations, but hard to see that if the TS industry is not hundreds of years old. Read RCI is only 38 years old and HGVC much younger... so hard to think in terms of 10+, 20+ years of ownership even though the TS salesperson would make you think otherwise...

 

[GregT]

Maybe one strategy is to get a buy-in "start kit" that seems to be 4800 or 5000pts and play with the system and see if I like it. If I really like it then go back and trade it in for 7K or just purchase an additional 7K later. Looks that 7K is aggressive ROFR right now, so they aren't moving down in price for awhile anyways. Did think about just renting, but to really "test" the system think you need to buy-in, especially if I want to see how good "open season" works and how well RCI trading is which can't do if I just rent.

This was a strategy that I adopted -- for each of my timeshares, I prefer to purchase Platinum so that it holds as much residual value as possible and I get the most point bang for my MF buck.

So I bought a 1BR Platinum at a lower MF property. This allowed me to test the system and the Hawaii properties (the reason I bought the thing in the first place) and confirmed that I like the reservation system, Open Season, and the properties themselves. I could have made 4,800 points work but I found myself in a situation where I didn't have enough points to do what I really wanted to do (but I got lucky and it worked out).

So, I'm now in the market for another 4,800 -- I don't regret not starting with a 7,000 because I think I'd still be looking for that 4,800 and 11,800 seems like more than I "need" considering my other timeshares.

Good luck and let us know what you decide!

Best,

Greg

 

[TheWizz]

I would consider buying a Platinum or Gold week from a HGVC Affiliate like Grand Pacific Palisades (GPP) or MarBrisa (GPM). I noticed a 2BR GPM on EBay recently for $1400, however it was a Gold week. But still a good price for $5K points. I have had great luck with the Resale Dept. at GPP - I was able to get 14K points (8400 pts via EBay resale and 6200 pts via GPP resale) and be apart of the HGVC with Elite status, which is a challenge via resale.

Send me a PM if you'd like more information. Best of luck in your pursuit.

 

[PenguinTS]

I would consider buying a Platinum or Gold week from a HGVC Affiliate like Grand Pacific Palisades (GPP) or MarBrisa (GPM). I noticed a 2BR GPM on EBay recently for $1400, however it was a Gold week. But still a good price for $5K points. I have had great luck with the Resale Dept. at GPP - I was able to get 14K points (8400 pts via EBay resale and 6200 pts via GPP resale) and be apart of the HGVC with Elite status, which is a challenge via resale.

Send me a PM if you'd like more information. Best of luck in your pursuit.

Thanks!

Yeah the most recent MarBrisa resell was a 5K sold at $2425 (eBay) + $995 HGVC conversion fee which comes out to be .68/pt buy-in.

Guess not bad, still better than the 1.1/pt for doing a HGVC 5K which is going for $5500. But when you do this math the HGVC which has about $200 LESS MF than MarBrisa the break-even is about 10 years which seems reasonable amount of time to own a TS. At this price point seems might as well do a HGVC a the lower MF. To me seeing a 1K yearly recurring fee would irk me as I would always be comparing against that number to evaluate if I was getting "good value" that year. Maybe just a psychological thing and street creed to be able to say yeah I got this swanky week for ~$850 vs ~$1100 each year ...

For GPP it seems you need to find ones that were ALREADY converted as picking up any random GPP resell won't let you convert to HGVC so seems like a lot of trouble to find the right units. Also going directly through the resell developer office doesn't sound like it would yield a good deal.

So the SoCal affiliates aren't that golden, marginally a better deal short-term. Bay club seems interesting but their MFs are WAY up there. Could also look at SoFL but that's way too far for me so not practical.

This leaves that 5K in LV or Orlando (but that's too far for me) as the best viable options.

What to do....

 

[RX8]

Where do you want your home resort?

Thanks!

Yeah the most recent MarBrisa resell was a 5K sold at $2425 (eBay) + $995 HGVC conversion fee which comes out to be .68/pt buy-in.

Guess not bad, still better than the 1.1/pt for doing a HGVC 5K which is going for $5500. But when you do this math the HGVC which has about $200 LESS MF than MarBrisa the break-even is about 10 years which seems reasonable amount of time to own a TS. At this price point seems might as well do a HGVC a the lower MF. To me seeing a 1K yearly recurring fee would irk me as I would always be comparing against that number to evaluate if I was getting "good value" that year. Maybe just a psychological thing and street creed to be able to say yeah I got this swanky week for ~$850 vs ~$1100 each year ...

For GPP it seems you need to find ones that were ALREADY converted as picking up any random GPP resell won't let you convert to HGVC so seems like a lot of trouble to find the right units. Also going directly through the resell developer office doesn't sound like it would yield a good deal.

So the SoCal affiliates aren't that golden, marginally a better deal short-term. Bay club seems interesting but their MFs are WAY up there. Could also look at SoFL but that's way too far for me so not practical.

This leaves that 5K in LV or Orlando (but that's too far for me) as the best viable options.

What to do....

Although higher MF, if you WANT to visit the CA locations more often (for weekly stays plus day use since you live in CA) you will need to consider owning there. If you own elsewhere there is no guarantee that you will be able to exchange into CA using HGVC points, especially GPP or Seapointe which have fewer HGVC members (and thus fewer units for HGVC use).

 

[TheWizz]

Although higher MF, if you WANT to visit the CA locations more often (for weekly stays plus day use since you live in CA) you will need to consider owning there. If you own elsewhere there is no guarantee that you will be able to exchange into CA using HGVC points, especially GPP or Seapointe which have fewer HGVC members (and thus fewer units for HGVC use).

Thanks!

Yeah the most recent MarBrisa resell was a 5K sold at $2425 (eBay) + $995 HGVC conversion fee which comes out to be .68/pt buy-in.

Guess not bad, still better than the 1.1/pt for doing a HGVC 5K which is going for $5500. But when you do this math the HGVC which has about $200 LESS MF than MarBrisa the break-even is about 10 years which seems reasonable amount of time to own a TS. At this price point seems might as well do a HGVC a the lower MF. To me seeing a 1K yearly recurring fee would irk me as I would always be comparing against that number to evaluate if I was getting "good value" that year. Maybe just a psychological thing and street creed to be able to say yeah I got this swanky week for ~$850 vs ~$1100 each year ...

For GPP it seems you need to find ones that were ALREADY converted as picking up any random GPP resell won't let you convert to HGVC so seems like a lot of trouble to find the right units. Also going directly through the resell developer office doesn't sound like it would yield a good deal.

So the SoCal affiliates aren't that golden, marginally a better deal short-term. Bay club seems interesting but their MFs are WAY up there. Could also look at SoFL but that's way too far for me so not practical.

This leaves that 5K in LV or Orlando (but that's too far for me) as the best viable options.

What to do....

There is a way to get GPP units, which are cheaper MFs vs. MarBrisa, and convert them to HGVC points - it is by buying direct from the GPP Resale Dept. You can own PLT weeks at GPP for ~$1 per point and if you buy direct (resales incl.), you can convert them to HGVC. Feel free to PM me and I'll explain how this works and who to contact.