"Smart Money" discusses Timeshares [merged]

[bdh]

developer controlled resorts

That would be a "fun fact to know and tell", anybody have an idea what the percentage of developer vs HOA controlled properties there are these days?

Due to the age of most properties, I'm thinking the majority are HOA controlled. I'm guessing 75% HOA - but that is just my guess, anyone know or have a better guess?

 

[joestein]

There was a similar article on Yahoo recently. I wrote a comment about how Timeshares can be a good value if bought resale and explained about some of the great vacations I have had since owning.

The response I got was "you must be a timeshare salesman".

 

[medfield98]

No, MF increases are not solely the result of greed. Prices tend to go up on most items, although it can be argued not every item (flat panel TV's for instance have seen decreases in cost).

As an example, I'm looking at replacing our furnace/ac units this fall. It's considerably more expensive than when they were originally purchased. I will be needing a new roof in the next 5 years. Again, considerably more expensive than the original roof. My washer/dryer will probably need replacing in the next few years as does my stove. I was shopping prices the other day and guess what? Yep, more expensive.

Then you have employee's. I don't know about you but most employee's expect an increase in wages each year.

How about insurance? My homeowners insurance was $700 only two years ago. This year it was $1,100.

Are your utilities less expensive than 10 years ago? I bet they're not.

Prices go up, costs go up, expenses are higher, MF's increase.

I'm not saying there isn't profit in it for management companies. If there wasn't, they wouldn't take the job. MF's are not 100% the result of some evil empire bent on milking you for every penny they can get.

I don 't fully understand why fees should rise so dramatically. I live in a 55+ Association community where we own our own homes and have many amentities-similar to a Timeshare Resort (indoor and outdoor pools, tennis courts, bocce, walking trails, 3 clubhouses,3 FT activitiy directors, lawn mowing, fertilizing snow removal up to our door and two car garage, trash PU, recycle PU, etc.) Our fee which includes all these amentities has been $250/mon for the full 9 year existence. I was Finance Chair for 5 years and currently a Finance Committe member and work with the Developer to keep the fees stable. The Developer also did not want to raise the fees as that was good for sales. You wouldl think Tiesharre developers wouldwant the same, unless there is more to the Timeshare fees than meets the eye. The key to steady fees is effective management and proper fees to begin with.

 

[TUGBrian]

That would be a "fun fact to know and tell", anybody have an idea what the percentage of developer vs HOA controlled properties there are these days?

Due to the age of most properties, I'm thinking the majority are HOA controlled. I'm guessing 75% HOA - but that is just my guess, anyone know or have a better guess?

was some research done on this recently (also involved delinquencies and foreclosure practices) released in last months ARDA developments magazine.

wish I could find the article online...I see ARDA lets you obtain a copy of the study for 300 bucks....lol

 

[Nolathyme]

I don 't fully understand why fees should rise so dramatically. I live in a 55+ Association community where we own our own homes and have many amentities-similar to a Timeshare Resort (indoor and outdoor pools, tennis courts, bocce, walking trails, 3 clubhouses,3 FT activitiy directors, lawn mowing, fertilizing snow removal up to our door and two car garage, trash PU, recycle PU, etc.) Our fee which includes all these amentities has been $250/mon for the full 9 year existence. I was Finance Chair for 5 years and currently a Finance Committe member and work with the Developer to keep the fees stable. The Developer also did not want to raise the fees as that was good for sales. You wouldl think Tiesharre developers wouldwant the same, unless there is more to the Timeshare fees than meets the eye. The key to steady fees is effective management and proper fees to begin with.

That's a little under $700 per week, about the average for timeshare fees. Sounds like your community had been overcharging people the first 8 years.

 

[JohnPaul]

Reasonable Fees

While the renovation/reserves portion of Vacation Internationale (VI) maintenance fees has gone up 21 cents a point over the last 4 years, the operations portion of the fees has stayed stable at $5.84. In the 23 years we've owned VI the only special assessment we ever got was for upgrades after VI fired Sunterra as managment and they did massive updates with that money.

VI is an owner controlled organization.

I also own at Oakmont Resort in Tennessee. My MF went up $10 to $390 a year for a one bedroom. Never been there but seems to be well maintained.

My other low MF resort is Sedona Pines. Fees have gone up but are still very low.

And while people seem to bitch immensely about fees going up there, I feel fees at Worldmark are still very low (probably why they have a better resale value than a lot of others).

 

[timeos2]

I don 't fully understand why fees should rise so dramatically. I live in a 55+ Association community where we own our own homes and have many amentities-similar to a Timeshare Resort (indoor and outdoor pools, tennis courts, bocce, walking trails, 3 clubhouses,3 FT activitiy directors, lawn mowing, fertilizing snow removal up to our door and two car garage, trash PU, recycle PU, etc.) Our fee which includes all these amentities has been $250/mon for the full 9 year existence. I was Finance Chair for 5 years and currently a Finance Committe member and work with the Developer to keep the fees stable. The Developer also did not want to raise the fees as that was good for sales. You wouldl think Tiesharre developers wouldwant the same, unless there is more to the Timeshare fees than meets the eye. The key to steady fees is effective management and proper fees to begin with.

Note whats missing from your list of things paid for by the Association you are a part of that is successfully holding fees very steady:

• No daily check in / out
• No full time (or even daily part time) front desk
• Ownership and maintenance of not just the exterior/amenities but the individual units themselves.
  Cleaning those. 1/2/3 bedroom units & kitchens at least weekly (Housekeeping staff or outside contractor)
• The entire contents of those units including all furnishings, appliances, electronics, phones, cable, power, water and every other expense of a household paid for by YOU as you own all those things & decide when/how to replace, repair or maintain them.

That is why it is no comparison at all. How many of those things you are NOT paying for as an Association, but do have to pay on your own, have gone down or even remained steady? How often (every 5-7 years?) do you replace things in your home because they ae "tired", abused, simply worn out or "out of date" in an environment of weekly (or more) changes of "owners" (who may not take the best care of things they don't feel are theirs).



You can compare the idea of the HOA/common costs in a full ownership condo vs timeshare but not at all what they cover.

 

[Carolinian]

How can you put "tiny niche" and "market flooding" in the same sentence. If the market is being flooded by the PCCs and they are using ebay, than ebay isnt a tiny niche......or if ebay is a tiny niche, than the PCCs arnt flooding the market

Simple, they are flooding one market, and it is a small one in the overall scheme of things in timeshare resales. They are not flooding the overall market and prices there are much more stable.

 

[Carolinian]

FYI - You have to shop all insurances every 5 years. For ex: my homeowners went up to $800.00 last year (from $475), so I said goodbye and went to another company for a bit more coverage and a $500 premium. Same goes for car insurance, etc. Just by the insurance actuarial "laws" your insurances will go up and then you have to switch to get a decrease.

HOA's do have to actively shop insurance, but the cost still goes up as building costs and therefore replacement costs are constantly rising. When I was on the board of one of the resorts I own at, we always took the maximum increase in coverage we could get every time we renewed, and shopped prices on all insurance companies in the area. When we had a hurricane and major damage, we rebuilt without a special assessment. Out m/f's were still a good bit lower than average.

 

[vckempson]

I don 't fully understand why fees should rise so dramatically. .

First off, this article about $1 timeshares is a day late and a dollar short. :hysterical:

Anyway, understanding quickly rising MF's is not difficult.

Higher defaults = bigger MF increases.

Continuously Rising defaults = larger and larger MF's.

It's that simple. Even if you kept your actual total operating expenses the same you'd have to increase the MF every year to account for delinquencies by other owners. So if your defaults are rising, you have a smaller number of people covering that nut. Your MF's will then go up faster even than the rate of inflation. So, at a conservatively assumed 20% delinquency rate, all other paying owners would need to pay 25% more to cover that shortfall. Ouch! It really is that simple.