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Sometimes it's better to buy from the brand [says Timeshare Salesman]

tschwa2

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Someone earlier gave the example of a Hawaiian deed that sells for $80,000 passing ROFR at $15,000.
The point though was I was looking for something that sells for $22,000 as in your chart example (not pro-rated off of an $80,000-$100,000 purchase) that you could apply the premium deed perks that you are assigning to your chart.
 

bluehende

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Perhaps you missed him calling me a liar here, and that my response simply plays upon his accusation:

"I do not think you are selling Ferraris, i think you are selling Ladas to people who cannot read."
Well answer his question. The question was what is the list price on your product. Not sure how that would be a trade secret.
 

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@maxpot46 I appreciate that you shared your calculations. A couple of questions and comments:

1) Does first day incentive mean bonus points? If so, how does that equate to your term "weeks rent" - do you divide the number of bonus points by the point value of the week you own? (If that is the case we received 8 weeks with our purchase.)

2) The value depreciation rate on our NYC developer unit since 2014 when we first purchased has averaged 14% decline a year over 5 years or a total of 70% decline in value if we were to sell today. The first day bonus value we received comes no where near compensating for this depreciation rate.

If we purchased resale about the same time we bought developer we would not have had extra points, but the value of our unit would have declined by about 40% (not great but not 70%); but instead of losing tens of thousands, it would have been thousands which is much easier to digest. An older resort would result in an even smaller decline in value because it because it would be fully depreciated and close to ROFR value.

Bottom Line: There is an opportunity cost of the capital that we lost by going developer because that's money we will never recover that we never expected to lose on "scarce" NYC real estate. Our story is not unique. Just talk to all the Westin, Hyatt, HGVC, and Marriott owners who lost tens of thousands across the country and still pay ever increasing maintenance fees - this is why people are skeptical.

3) FWIW our NYC maintenance fee has been increasing by 5% a year for the past few years. Last year it was 5.48%. 2.5% is way too low.

4) A key advantage of renting or investing is that you have the flexibility to stop the expense at any time. Lose a job? Health issue? Economic downturn? Simple, travel less and hold off on expenses for a few years. You cannot do that with a timeshare because you are locked into the expense. Economics would dictate that there should be a significant return for the risk involved of locking in your spending. However the high up front purchase price of developer doesn't provide sufficient reward due to the rapid decline in value. Resale reduces this risk tremendously but as developers increase MF to the point that there is no savings below renting the unit, the economic value of taking on TS risk vs. other options decline as well.
1. Yes.

2. Interesting, how did you acquire these figures? Is this based on soliciting buyback offers from the developer, or some other source?

3. Interesting, but I would presume that a NYC deed would experience higher rates of MF inflation than the national average, and I am using national averages in the calculations here. My research indicates that 3% is the national average (and 2.5% is from analysis of the price sheets of my own product, which are in line with what I understand to be the national average), but I am open to seeing data from an alternative source.

4. This presumes that you cannot sell the deed, whereas my company is happy (if not desperate) to buy back these premium deeds.
 

K2Quick

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My 2.5% figure was taken from analyzing 15 years of my companies price sheets. It has not been 2.5% every year, that is the average. My research has indicated that, on average, MF across all products averages 3% per year, so my own companies figures are similar. If you have a data source that indicates otherwise, I'd be delighted to see it.
Here are a few data points for this year:

Marriott Trust Points (which represents a blend of all Marriott timeshare properties): +4.9% year over year
https://tugbbs.com/forums/index.php?threads/marriott-2019-maintenance-fees.281319/

Club Wyndham Access (which represents a blend of all Wyndham timeshare properties): +4.0%
https://tugbbs.com/forums/index.php?threads/2019-maintenance-fees.282471/

Worldmark by Wyndham (which represents a blend of all Worldmark by Wyndham properties) has increased exactly 5% for the last five years or so (I know because that's what I own and the increase is limited by the bylaws): +5%

Those are the three pure-points systems I'm aware of but those three systems should provide a good, representative sample of the industry as they cover about 200 resorts in all geographic regions of the U.S.

And these increases are coming at a time when the economy is humming along. Around 2008-2011, maintenance fee increases were often around 10% as owners were covering the bad debts of defaulting owners.
 

maxpot46

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Well answer his question. The question was what is the list price on your product. Not sure how that would be a trade secret.
You're not sure how a company would instantly fire someone who reveals product information online that is only intended to be revealed after a 90 minute presentation? Can't help you there. I will not reveal actual company data.
 

maxpot46

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You are talking price sheets. Price sheets don't typically show MF's. MF's are typically de-emphasized during sales and a detailed discussion of anything other than hypothetical historic (inaccurate) MF are all you will get.

As a collective Tug keeps track of MF's. Don't go back 15 years. How MF's increased 15 years ago isn't nearly as relevant today as going back 5 years.
Our price sheets do, in fact, show the MF. We are very strongly informed that we MUST discuss the MFs early in our presentation so that they are not an obstacle to completing the sale.
 

maxpot46

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You are talking price sheets. Price sheets don't typically show MF's. MF's are typically de-emphasized during sales and a detailed discussion of anything other than hypothetical historic (inaccurate) MF are all you will get.

As a collective Tug keeps track of MF's. Don't go back 15 years. How MF's increased 15 years ago isn't nearly as relevant today as going back 5 years.
Can you please give me a link to this data? I'd be very curious to look at it.
 

bluehende

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You're not sure how a company would instantly fire someone who reveals product information online that is only intended to be revealed after a 90 minute presentation? Can't help you there. I will not reveal actual company data.
And we circle again. No one believes you are selling those ferrari's at great prices with tons of incentives and you stating you cannot reveal them (even for a valid reason) does not pass the smell test. I gave you my analysis a few pages ago. You have not commented where I am wrong and I used a lot of your assumptions. You give generalities and somehow throw it through a magic secret spreadsheet and amazingly prove your point with specifics.

Your product may be the only one I know of I cannot get a price online I guess.
 

maxpot46

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Here are a few data points for this year:

Marriott Trust Points (which represents a blend of all Marriott timeshare properties): +4.9% year over year
https://tugbbs.com/forums/index.php?threads/marriott-2019-maintenance-fees.281319/

Club Wyndham Access (which represents a blend of all Wyndham timeshare properties): +4.0%
https://tugbbs.com/forums/index.php?threads/2019-maintenance-fees.282471/

Worldmark by Wyndham (which represents a blend of all Worldmark by Wyndham properties) has increased exactly 5% for the last five years or so (I know because that's what I own and the increase is limited by the bylaws): +5%

Those are the three pure-points systems I'm aware of but those three systems should provide a good, representative sample of the industry as they cover about 200 resorts in all geographic regions of the U.S.

And these increases are coming at a time when the economy is humming along. Around 2008-2011, maintenance fee increases were often around 10% as owners were covering the bad debts of defaulting owners.
Cool, thanks for the data.
 

tschwa2

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I have off Friday-Tuesday. I probably could fly in and make an appointment. It might even be worth the 90-120 minutes but not if you are going to waste my time for the first 75 minutes with your meaningless hypothetical numbers.
 

maxpot46

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Exactly. Note how all those positive numbers are the ones he won't disclose. No company would build a timeshare then give them away at cost after incentives. Under those numbers after commissions and "update incentives" they would lose money. I guess they make it up on volume. Not gonna happen.
Untrue because the nature of FDI is that they cost the developer very little relative to the value received by the owner, since the timeshare business model is based on buying low and selling high and not the recurring income of renting out rooms. Additional stays need merely be accounted for in the availability algorithm and represent no lost opportunity cost to the developer, but allow the owner to avoid the opportunity cost of renting additional rooms.
 

CalGalTraveler

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1. Yes.

Thanks for clarifying

2. Interesting, how did you acquire these figures? Is this based on soliciting buyback offers from the developer, or some other source?

Multiple sources including buyback offer from developer, ROFR.net, Redweek and EBay sold listings. Plenty of datapoints. There was even a Residences Studio Premier that passed ROFR for $10,001 last year. I as well as several Tuggers also saw it as sold on EBay so it's legit. (FYI...we don't own this type of unit.)

3. Interesting, but I would presume that a NYC deed would experience higher rates of MF inflation than the national average, and I am using national averages in the calculations here. My research indicates that 3% is the national average (and 2.5% is from analysis of the price sheets of my own product, which are in line with what I understand to be the national average), but I am open to seeing data from an alternative source.

For premium NYC properties 5% is realistic.

4. This presumes that you cannot sell the deed, whereas my company is happy (if not desperate) to buy back these premium deeds.

Yes, they they offered to buy it back for 26% of the retail value as that is what they said was the current resale value on the market. We decided to hold for now because we like the property (the staff is very welcoming and remembers us so it feels like home), the MF are not bad, and it offers some perks that benefit our other HGVC properties and give us more ROI. However, if they devalue those perks or drastically increase our MF, we will cut our losses and sell.
My responses are in the quotes above in Italics
 
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dayooper

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Looking it up, it seems HGVC on the Boulevard is in Vegas? I would never call a Vegas deed a premium one, with almost 300 timeshare properties there and abundant options for deals and even comps (I'm a heavy gambler with 30 years of Vegas trips under my belt, and have never paid for a hotel room in Vegas).
And your point being? I’m using my 7000 Vegas points to take my family to Myrtle Beach in June staying at Ocean 22. If I choose to go to Vegas on my points, so be it. I bought my platinum 2 bedroom Flamingo for $4500 and have $1050 a year MF’s and I use them to go on vacations with my family and/or friends. I have no desire to purchase a $100,000 week “premium” resort. It’s sounds like a tremendous waste of money. If I want to go to Hawaii, I will use my points to do so. If I want to take the guys for a weekend in Vegas, I will. If I need more HGVC points, I will buy resale. You keep talking premium units, but that’s all hot air to me. The real value in timesharing is buying a little as you can and turning it into something more. Using your rack rates, I just paid for my families vacation when I bought my Flamingo unit. Every else is gravy, and I didn’t go into debt or have payments the size of my mortgage payments to do so.

I could care less about how little you have paid to stay in Vegas or how many rooms you’ve been comped for being a “whale.” None of that impresses me. Sounds like you have led an extravagant life style. That’s great, to each their own. No matter how much you sell, make and spend, in my mind it will never measure up to the impact I have on the families I serve. If money, status and an extravagant lifestyle is what’s important to you, no worries here. I understand that. It’s just not important to me. And if what I find important to me isn’t to you, that’s fine too.
 

DannyTS

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Yes, they they offered to buy it back for 26% of the retail value as that is what they said was the current resale value on the market. We decided to hold for now because we like the property (the staff is very welcoming and remembers us so it feels like home), the MF are not bad, and it offers some perks that benefit our other HGVC properties and give us more ROI. However, if they devalue those perks, we will cut our losses and sell.
How come i am not shocked it was not 50% of the retail value as the OP claims?
Was their offer 26% of the current retail value or 26% of what you paid at the time? I am not sure i understand.
 

bluehende

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Untrue because the nature of FDI is that they cost the developer very little relative to the value received by the owner, since the timeshare business model is based on buying low and selling high and not the recurring income of renting out rooms. Additional stays need merely be accounted for in the availability algorithm and represent no lost opportunity cost to the developer, but allow the owner to avoid the opportunity cost of renting additional rooms.
So you are telling me you do not sell all those premium weeks until all your bonus points are used up. Operating costs of that resort have to be covered also. The average profit margin for a hotel is 5%. 95% of average rental rates does not seem very little to me. Or are we not allowed to use average's anymore.
 

CalGalTraveler

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How come i am not shocked it was not 50% of the retail value as the OP claims?
Was their offer 26% of the current retail value or 26% of what you paid at the time? I am not sure i understand.
26% of what we paid at the time. Retail prices have increased over 5 years so the percentage would be even lower if I applied that.
 

DannyTS

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And your point being? I’m using my 7000 Vegas points to take my family to Myrtle Beach in June staying at Ocean 22. If I choose to go to Vegas on my points, so be it. I bought my platinum 2 bedroom Flamingo for $4500 and have $1050 a year MF’s and I use them to go on vacations with my family and/or friends. I have no desire to purchase a $100,000 week “premium” resort. It’s sounds like a tremendous waste of money. If I want to go to Hawaii, I will use my points to do so. If I want to take the guys for a weekend in Vegas, I will. If I need more HGVC points, I will buy resale. You keep talking premium units, but that’s all hot air to me. The real value in timesharing is buying a little as you can and turning it into something more. Using your rack rates, I just paid for my families vacation when I bought my Flamingo unit. Every else is gravy, and I didn’t go into debt or have payments the size of my mortgage payments to do so.

I could care less about how little you have paid to stay in Vegas or how many rooms you’ve been comped for being a “whale.” None of that impresses me. Sounds like you have led an extravagant life style. That’s great, to each their own. No matter how much you sell, make and spend, in my mind it will never measure up to the impact I have on the families I serve. If money, status and an extravagant lifestyle is what’s important to you, no worries here. I understand that. It’s just not important to me. And if what I find important to me isn’t to you, that’s fine too.
The OP does not seem to understand, for a lot of TUGGERS a premium HGVC resale product may actually be the one with the lowest MF per point. And we are willing to pay higher resale prices because of that. The ones he may call premium are avoided by many people if they come with high maintenance fees for the same number of points. Many of such products have zero or negative value on the resale market.
 

jwalk03

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Regardless, since the analysis is using average figures, I am using average price and not cheapest possible nor most expensive possible price. If you were in my office, I'd run the calculation for your personal figures, and if I can't beat them, we wouldn't do business.
Mine are certainly not the cheapest. As I mentioned all of them were at least 2BR with full kitchens. No studios or Motel 6 here.

And yeah I'm sure we wouldn't do business, I know better than to fall for the smoke and mirrors you are selling at a timeshare presentation. BUY RESALE. FULL STOP.
 

DannyTS

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26% of what we paid at the time. Retail prices have increased over 5 years so the percentage would be even lower if I applied that.
So in terms of $ value at the time of your purchase, their offer is probably around 20% at best. And this is, as we all know, one of very few cases when they actually offer anything at all.
 

CalGalTraveler

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So in terms of $ value at the time of your purchase, their offer is probably around 20% at best. And this is, as we all know, one of very few cases when they actually offer anything at all.
Just the opposite. 26% of the purchase price we paid. Would be lower percentage if compared to today's higher retail price (which we did not pay). The buyback was based on resale market price not as a percent of what the owner paid. In other words if you are a poor negotiator or buy an older unit from the developer after retail prices have increased and resale has depreciated significantly, the percentage would be worse.

To be fair, this is not a penthouse or top-end unit so 50% could be true. However the unit has a relatively low MF for NYC and we trade points easily into premium NYC 1 bdrms, view units and penthouses with the owners-only (bHC) point reservation windows, so we are milking it for ROI.

We like the flexibility the points/unit offers and the property is great. It's just that if we had to do it over again, knowing what we know now, we would have purchased it resale.
 
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RX8

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26% of what we paid at the time. Retail prices have increased over 5 years so the percentage would be even lower if I applied that.
What??? That can't be! The buyback offer was 26% of the price you paid?!? How can that be with solid data backing up the 50% buyback claim such as a single post on Redweek and an e-mail from a broker (whose job is to maximize offers) suggesting to list at 50% of retail?

I feel for the people who bought thinking that they have a guaranteed 50% buyback program.
 

breezez

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26% of what we paid at the time. Retail prices have increased over 5 years so the percentage would be even lower if I applied that.
Guess your not benefiting from maxpots price appreciation the only thing appreciating is the retail price.
 
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CalGalTraveler

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This is the 2019 HGVC properties with the lowest MF for which we have data so far.
Updated December 24, 2018
Note: I have updated with 2019 data for what we have posted so far. This contains the top 30 which is all those with MFs better than $0.1274/point.


View attachment 9592

The MFs file (spreadsheet) now contains 3 years worth of data. Updated 12/21/18.
@DannyTS is referring to the MF/point spreadsheet that the moderator of the HGVC forum, @GT75 has painstakingly pulled together which compares the highest MF/point units in the system. Some of the best traders in the system are Vegas 2 bdrm 7000 point at Blvd, Paradise, Elara that also sell for low resell and resell easily. People that own these units rarely use them but trade into Hawaii and elsewhere in the system for <=$1000 MF. bHC/NYC is a different animal with different ways to get better value.
 
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