Requesting input on Hyatt Ka'anapali Beach timeshare purchase

[BeetsandOlives]

Hi everyone, my wife and I were in Maui very recently and signed up for a HKB timeshare presentation after some discussion. When all was and done, we signed for a EOY even year, 2 bedroom middle floor band floating week deeded timeshare at HKB at $42,675 plus $680.33 in closing costs with incentive of 300,000 WOH points, figuring we still have 5 days to cancel from now if we need to. Maintenance fees for a 2 bedroom at HKB at this time are reportedly around $4000 or so per year of use.

We've done a decent amount of research into timeshares and the current availability of comparable resales currently available, and we are aware of the general idea of avoiding buying timeshares directly from the developer. However, it seems that HKB EOY 2 bedroom floating week timeshares in both middle and upper floor bands like the one we just purchased are considered quite desirable and generally do not show up often on the resale market; if there are any, they're listed at prices that generally are not that much far off from the developer price to begin with. That being said, we wanted to hear from others to determine whether our decision makes sense and whether we'd be justified in staying with the purchase from the developer, or whether we should cancel and just try to look for a better deal on the resale market. We understand there is a planned moratorium on short term rentals being actively discussed for Maui which could go into effect next year, which is what prompted our interest in the HKB timeshare to begin with; we figure if this moratorium does take effect, the intrinsic value of a HKB timeshare goes up considerably and we stand to save a lot of money going forward on our Maui trips.

For context: we love traveling to Maui and are located in the PNW, so direct flights to Hawaii are both plentiful and usually quite affordable. We do not intend on trading into stays at other locales - if we are unable to use our week for any reason, our plan is to book a week during a high interest season in Maui and rent the unit out.

We appreciate any and all input on this matter. Thank you for your time!

 

[echino]

Compare maintenance fees to available rentals from other owners on sites like Redweek. You will find that rentals are not that much higher than maintenance fees, and in some cases even lower. Fees are usually increasing faster than inflation. This is the primary driver of the intrinsic value of the timeshare. When HKB was built, the value was high because of lower fees and higher rentals. With time, fee go up, while rental prices go down, which brings the value down quickly. Eventually, when fees equal rental prices, the real intrinsic value will reach zero.

 

[socaltimeshare]

it seems that HKB EOY 2 bedroom floating week timeshares in both middle and upper floor bands like the one we just purchased are considered quite desirable and generally do not show up often on the resale market; if there are any, they're listed at prices that generally are not that much far off from the developer price to begin with.

I would recommend rescinding. I watch this market closely and would disagree with your statement re: float resale availability for mid to upper levels. While there are fewer floats than fixed weeks on resale, part of this is because floats have not been sold as long (at first, only fixed weeks were offered by the developer). If you wait for the right fit, you will find what you want at good savings.

Right now, there is a 2 bedroom middle floor EOY odd on Redweek right now for $25K. It was posted by "Tom R.". I'm guessing that is Tom Roy with Maui Resort Rentals. You might check with him as he usually has other unlisted inventory. That's about 60% of your cost buying from the developer. Another person I would reach out to is Bill Gabrielli- he has done a ton of Hyatt resales and even if he doesn't have the listing, he might be able to find it for you.
There is also a 2-bedroom odd listed for $17,499 and it's Redweek verified (but it doesn't specify floor range). I think the smoking hot deal is the annual floater for $24,500 (it's a lower level but still a good view IMO). FYI, when people post on Redweek, that is just their initial Ask. There is no harm in hitting the "Make an Offer" button and offering a sizeable haircut off their ask. If they want out, they will sell. For someone, it might be their first/only offer in months and they will be happy to sell at below their ask. I would also check out Sellmytimeshare.com. I've bought Hyatt from them below. Many of their listings can seem high, but often if you make an offer of about 50% of list a deal can still be had. At a minimum, this will put you in contact with one of their brokers, who will monitor the market for you and let you know if a new listing comes on.

 

[5finny]

I would recommend rescinding. I watch this market closely and would disagree with your statement re: float resale availability for mid to upper levels. While there are fewer floats than fixed weeks on resale, part of this is because floats have not been sold as long (at first, only fixed weeks were offered by the developer). If you wait for the right fit, you will find what you want at good savings. Right now, there is a 2 bedroom middle floor EOY odd on Redweek right now for $25K. It was posted by "Tom R.". I'm guessing that is Tom Roy with Maui Resort Rentals. You might check with him as he usually has other unlisted inventory. That's about 60% of your cost buying from the developer. Another person I would reach out to is Bill Gabrielli- he has done a ton of Hyatt resales and even if he doesn't have the listing, he might be able to find it for you. There is also a 2-bedroom odd listed for $17,499 and it's Redweek verified (but it doesn't specify floor range). I think the smoking hot deal is the annual floater for $24,500 (it's a lower level but still a good view IMO). FYI, when people post on Redweek, that is just their initial Ask. There is no harm in hitting the "Make an Offer" button and offering a sizeable haircut off their ask. If they want out, they will sell. For someone, it might be their first/only offer in months and they will be happy to sell at below their ask. I would also check out Sellmytimeshare.com. I've bought Hyatt from them below. Many of their listings can seem high, but often if you make an offer of about 50% of list a deal can still be had. At a minimum, this will put you in contact with one of their brokers, who will monitor the market for you and let you know if a new listing comes on. I think @socaltimeshare gave you pretty good and detailed advice I would also recommend rescinding That said I do not think your developer deal is terrible and it is a quality purchase If convenience and certainty are highly valued then just know that you are paying a very high premium for them In terms of renting July is probably peak demand and lowest rental on Redweek is about $5800 I am an owner who buys to use but sometimes (more often than I like) find myself renting out some units Do not underestimate the work involved in doing so Also many people are not well suited temperamently for doing so Good Luck !

 

[Kal]

The fire in Lahaina has very much impacted timeshare opportunties in Maui. This will likely be a moderate term as Lahaina recovery is proceeding quickly. Your choice of a floating week is excellent. I own a floating week and it provides incredible options for when to stay. I also own on the top floor band and that provides great views and is sufficently away from the casual pool noise.

The volume of HKB sales on Redweeks is considerably higher than in the past. Floating weeks don't show up very often but might be worth the wait as compared to developer pricing. It's just a matter of coin. The inventory available for developer sales is getting very low, so supply and demand will become an issue.

In general, I will NEVER purchase from the developer, but sometimes time is of the essence. This might be a situation where you might want to make a move so you can reserve your desired week.

 

[socaltimeshare]

We understand there is a planned moratorium on short term rentals being actively discussed for Maui which could go into effect next year, which is what prompted our interest in the HKB timeshare to begin with; we figure if this moratorium does take effect, the intrinsic value of a HKB timeshare goes up considerably and we stand to save a lot of money going forward on our Maui trips.

Out of curiosity, is this one of the new selling points the sales reps are using? They are big on selling this property as an "investment". In some of my presentations, they showed other non-timeshare units in the Maui area, how much they are selling for, and how much they have appreciated over time. Flash forward many years, and I can tell you that the HKB units on the resale market have not appreciated in value, and that resale values are instead declining in price, whereas non-timeshare re-sale properties in Maui have gone up significantly. In my presentation, I was shown the average daily hotel rate at places like the Hyatt Regency (to highlight the potential income an owner can receive from renting). The problem though is large parts of the general population don't know about sites like Redweek. So you will not get the same rate a hotel website is getting.

You can go through a rental company, but they will take a commission of about 25%. In the years you try to rent, there is no guarantee you will rent the property. There is a 2-bedroom mid-week rental for the week of Christmas right now on Redweek going for $2,995 for the week. This is less than the maintenance fees. It's been advertised for quite a while now (and seems to be the same person also advertising it on the Hyatt Facebook group). I regularly see deals like that.

You only purchased an EOY and state you may not even use it all the time. With this in mind, is ownership the best option when there are current opportunities to rent for less than your annual Maintenance Fees? For the occasional user, I would pick up a low-cost Pinion Pointe Diamond week with a lower annual MF, learn how to use the club exchange request system, and get exchanges into Maui (which can be accomplished for prime weeks if you time it right, but is more likely if you have the availability to travel when schools are in session). I've successfully exchanged multiple times in the summer.

Unlike some others here, I don't like the Float weeks, because why pay a premium for access when the club exchange program works just fine? If you wanted to buy, I would advocate getting a fixed week during a prime time in July that you know you can use, but that also is easier to rent (if you can't use it) and that will hopefully also maintain its resale value (vs. a less desirable week). At other timeshares, in the long-term, some float owners seem unhappy with the ability to book. Right now, except for scattered reports of dissatisfaction, most float owners are reporting it is currently easy to book a desired float week 1 year out. That said, I wonder if that is because of unsold float inventory, and what will happen when these unsold units are sold, thus raising overall booking demand? Some speculate that eventually any unsold units (float or fixed) will be bought by the Portfolio program. Will this lead to a diminished ability to book your desired float week once portfolio point owners can also access float week inventory.....

Don't forget the IRS has issued Notice 2024-85. If you have over $5,000 in rental income on a site like Redweek in 2024, you will not get a 1099-K. In 2025, that threshold drops to $2,500. In 2026, it further drops to $600. Of course, you were always required to report this income, but my hunch is many didn't. Could this potentially impact the supply of resales once the 1099-Ks start getting issued, or will this raise the average rental rates once all owners who are renting out units have to start considering these costs?

If you are looking at this as a potential investment, make sure as you are evaluating expenses vs. income, consider federal and state income tax, and the additional cost/time to file a Hawaii non-resident state income tax. Since this is Hawaii property, you also need to be aware of three more taxes: The TAT, MCTAT, and GET. Here is an introductory video on this-

. The TAT is the Transient Accommodations Tax and is 10.25% of whatever your gross rental is. The MCTAT is Maui County's version of the tax, which is an additional 3% and paid separately. The GET is the General Excise Tax. It is 4%. If you hire a company to rent your property, they will often collect and report these taxes for you (Redweek does not). If you use a site like Redweek, you have to create a Hawaii Tax account, get a license to rent your timeshare week, and file semi-annual reports as well as annual reconciliation reports, even in the years you use your timeshare.

The TAT was 7.25% in 2015 vs. a combined 13.25% today. Will it continue to rise? Right now, the target is non-timeshare short-term rentals. However, what other fees or restrictions might Hawaii or the County of Maui add to timeshares in the future? There is a lot of anger in some communities regarding both tourism and colonialism.

One thing I would consider is the opportunity cost of locking up $43,000 (that could otherwise be invested elsewhere for profit). When I look at all these costs as well as the expected loss when in the future you eventually sell your timeshare, and the choice is developer pricing vs. renting from an owner, I think renting is the answer. IMO, buying can make sense at the right resale price.

One final thought- The 300,000 WOH points you are getting from the developer are worth roughly $5,760 if you were buying them directly from Hyatt (WOH is currently selling them for 1.92 cents/point). However, there are more cost-effective ways to get WOH points so I would not value these points at $5,760.

Here is one example -Use the Chase Ultimate Rewards shopping portal link to giftcards.com, then buy a $250 Visa Mastercard. Total cost is $255.95 ($250 plus $5.95) activation fee. Use that virtual debit card to immediately pay a bill (or prepay bills), like your insurance, cell phone, etc. You will get 3 points/dollar on that spend if you use the Chase Freedom card just by clicking through the Ultimate Rewards shopping portal. Plus, another 1.5 miles for using that Chase Freedom Unlimited credit card on the actual purchase. So you will get $255.95 x 4.5 = 1,152 points for $5.95. $5.95/1152 = .00516 / point. That reduces the value of your 300,000 points to $1,549.48. You can then combine those points on a credit card like the Chase Preferred or Sapphire, then move them over to World of Hyatt on a 1:1 basis. The transfer is generally instantaneous.

I wouldn't necessarily advocate doing the above due to time costs, just pointing out that the 300K points are not as valuable as they might initially seem. Also, I wouldn't necessarily want 300K WOH points sitting around, as you never know when the next devaluation is coming. I prefer having all my points as Ultimate Reward points that can be instantly converted to WOH or other partners. Thus, developer offers for 300K points are not very enticing to me, as it is easy enough to pick up large swaths of these points annually through credit card spend and shopping portal bonuses on things I would already be buying...

 

[Tucsonadventurer]

I've seen a lot of Hyatt Kaanapali 2 bedrooms renting at MF cost lately, even one for Christmas wedk but maybe because of the fires and tourism being down. There also has been more inventory in resales as MFs increase. But if you can't find what you want then this is probably one of the few or only timeshare I would buy from the developer (if I didn't already own 5 resales). I'd diligently check resales but there are more specific weeks for sale still then floating due to it being a more recent offering. You could also try renting for a year while you put out feelers for resales

 

[BeetsandOlives]

Thank you everyone for your input! We decided to cancel the purchase.

Just to weigh in on some points being brought up: we’re very aware of the pitfalls of viewing timeshares as investments and did not have any illusions regarding what we were signing up for. Our salesperson only mentioned the planned moratorium after their sales pitch - they did not use it as an argument for buying. To be very honest, it was a very earnest talk and neither my wife nor I felt like we were being hustled. We primarily were interested in moving forward on this to help our future vacations in Maui become more affordable especially as we plan to start bringing our family and relatives there. Upon doing some more research, it seems the STR moratorium on Maui is still not certain to pass, so we’ll see if that will have any impact. I agree that current rental prices look depressed but I think it may be lingering from the recent disaster at Lahaina. As a whole, Maui felt like it wasn’t too busy this time when we were there.

I agree on the WOH points not being a super relevant incentive and my wife and I already do some CC churning. We were more concerned on whether this was a rare situation where buying from the developer was an actually justifiable decision or whether we could do better by waiting.

We also got in touch with a few brokers including Bill Gabrielli and will keep an eye on the market to see if anything comes up. Thank you for that recommendation! You all were extremely helpful.