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SA Frequently Asked Questions - Part I

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South Africa Forum Frequently Asked Questions

1.Why buy a South African (SA) timeshare?
2.Do I want a 1 BD or a 2 BD?
3.Do I want a Gold Crown or a standard resort?
4.Do I want a red or a white week?
5.What kind of trade power to South African weeks have?
6.How much can I expect to spend?
7.What exchange company can I trade through?
8.What is a group purchase?
9.Where can I buy a South African timeshare?
10.What is a spacebanked week? Where can I buy one?



1.Why buy a South African (SA) timeshare?


As for South Africa, I've been tempted to purchase there. If you go to the SA board and scroll through the last six months of old posts, you'll see a few helpful discussions as to "why it works." The best I can figure, it is all about an exchange rate advantage. Americans (and others) can buy for $500 US what South Africans used to pay $2,500 US for, simply due to the favorable exchange rate of the dollar to the Rand. Likewise, the typical $400-$500 annual Maintenance Fee is now only about $150-$225 US/year. Another benefit is that, due to the exchange rate, instead of paying about $90 a year as the annual RCI membership fee, new SA owners are able to buy their RCI membership for about $25-$30 US a year, again due to the favorable exchange rate. So, after spending $500 US upfront, the SA owner is only paying a yearly MF of $175+RCI membership of about $30 a year+$139 RCI exchange fee) to trade somewhere within RCI's available inventory. Since members sometimes luck out and get 2BR Gold Crowns in high demand locations, they are grinning from ear to ear at having stayed in such fabulous resorts for only $300-$350, when others pay much more than that. Demand for exchanges into these SA resorts is still high enough (with such a natural variety of great geographic diversity, its' a popular vacation destination) that RCI allows decent trading power. After all, a 1BR red week should exchange for an equivalent 1BR red week anywhere in the world, as long as supply/demand doesn't get out of whack. The vast majority of non-South Africans buying there seem to have no intention of ever visiting their home resort. At first, I thought that this would create a "glut" of SA deposits, and no one to demand them, since it would appear to be one-way exchanging. However, several posts I've read suggest that although a high percentage of Tuggers are enthusiastic about SA, Tug ownership actually represents a very small percentage of weeks in South Africa. After all, not everyone is so passionate about owning in SA. Tuggers speak about the risk of exchange rates increasing, trading power deteriorating, and political uncertainty escalating, which could make their timeshare ownership worth less. Most say that because they are only investing $500 to $1500 upfront (some Gold Crown resorts are much more expensive than even $1500 US), getting a few trades before then is worth it. They don't care if it becomes worthless.

Steve, TUG Member


2.Do I want a 1 BD or a 2 BD?


Buy a 2BD if you will be letting RCI do your ongoing searches, and will always need a 2BD or larger. Buy a 1BD if you plan to do the searches yourself online. If there are 2BD's at the resort, and your SA week has trading power, you will get the exchange, even if your SA week is a studio. We own 1BD's and 2BD's at the same resort and they trade identically. I like the 2BD's for those times I need a 2BD for a specific week and/or area, and turn it over to RCI to search while I get more sleep!

Dee Layden, TUG Member


2.Do I want a Gold Crown or a standard resort?

It depends entirely on how you want to use it. There are a lot of areas like Orlando and Branson and Williamsburg where the supply of timeshares exceeds the demand year-round, despite what the developers may have told you! The lowliest standard SA week will trade into 2BD Gold Crown resorts there almost any time of year. So will Gold Crown SA weeks. A standard week will fail more often to get exchanges in limited markets where demand exceeds supply (California beaches or Cape Cod for July 4th) or where the quality of the resort is far superior AND in demand. (Flamingo Hilton in Las Vegas for Easter, New Orleans for Mardi Gras, Manhattan Club for New Year's Eve.) There is no guarantee that a Gold Crown will get some of these exchanges either, but you DO have a better chance. A Gold Crown will tend to put you at the head of the request line. RCI also may restrict you from exchanging into what they consider "lesser" resorts. Your Gold Crown can "lock" you out of trading into a desirable area which has only standard resorts, because the timeshares are second rate and lack Gold Crown designation. After looking through the RCI directory, if you find a lot of standard places where you want to go especially during weeks 1 - 21 and 35 - 47, then buy at least one standard resort.

Dee Layden, TUG Member


3.Do I want a red or a white week?


Red weeks have more points in the South Africa RCI system, so you'd have a more valuable property for resale some day if you buy a red week.

Dee Layden, TUG Member


4.What kind of trade power do South African weeks have?


Surprisingly good for the price. They give you the opportunity for some really amazing vacations for approximately $40 a night. They will NOT out-trade U.S. powerhouses, nor should you expect them to. But for the price, everyone should have at least one!

Dee Layden, TUG Member

5.How much can I expect to spend?


The Rand fluctuates, so SA weeks bought in 1998 when the Rand was at 6/1 cost TWICE as much as ones bought by Tuggers in February of 2002 with Rand that were 12/1. At the end of 2003, the exchange rate was about 7:1. Check www.xe.com to check current exchange. You'll spend less than $1,000 for a standard 1BD, and under $2,000 for a Gold Crown. Many people have gotten amazing deals for under $500. You only need one good exchange and the timeshare has paid for itself. That's why some of us own so many. Also, be sure to buy RCI memberships through the SA seller. Get as many years as you can, as you will never get them cheaper in years to come.

Dee Layden, TUG Member


6.What exchange company can I trade through?


RCI has all but three of the South African timeshares, and II has those three. Dial an Exchange also willingly takes South African timeshares, and membership is free. [TPI also accepts SA deposits. I've used them with success. Phil]

Dee Layden, TUG Member


7.What is a group purchase?


Typically an SA (or other) timeshare reseller has a large variety of weeks for sale. Sometimes resellers, for whatever reason, will have an especially large supply at a particular resort. In an effort to move the product they will offer discounted prices, reduced closing costs, favorable RCI membership extensions, or a combination of these. This deal is offered on TUG on a first-come, first-served basis. All negotiations are between the individual TUG member and the reseller, but much info is shared on the board, i.e.

[*]"I already own XXX and it is..."
[*]"I just placed my order for TWO weeks at XXX."
[*]"Last year I exchanged XXX for..." etc.


This provides a comfort factor for first time buyers. The advantages for buyers are twofold: they get a better deal by negotiating as a group and they also feel a sense of safety in numbers. That is, if for any reason the group is dissatisfied with the purchase process there is a strong incentive for the reseller to move quickly to fix the problem, otherwise he may have a problem selling to Tuggers in the future. Timing, supply and demand are uncertain, so keep checking the boards!

Bob Greenhalgh , TUG Member


8.Where can I buy a South African timeshare?


For a current list of where to buy South African timeshares or spacebanked weeks, email philemer1@yahoo.com


10.What is a spacebanked week? Where can I buy one?


The seller who owns the weeks outright has to pay the MF or levy. Then, the weeks can be spacebanked. Usually the weeks are for units that might be sold, or are for sale, but the owner doesn't need past weeks. Those sellers who are licensed can transfer their banked week into your RCI account. If you have no RCI account or are buying from a private party who is not in the business of timeshare resale, you will have to make the exchange using his account, and negotiate with him how to do it. You will usually be charged the equivalent of the MF plus a little to cover the seller's expenses. It will also cost $139 or $179 for the RCI exchange. Buy weeks on eBay, from SA resellers, or from Tuggers in the Tug Classifieds.

Dee Layden, TUG Member
 
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