Strategic HGVC purchase

[milkycow]

Been reading through many thread as well as picking brains of family friend who is an HGVC owner. My current thought process is that it more advantageous to own an HGVC with lower MF such as Vegas or Orlando timeshares and use the points to book at other HGVC properties. Am I thinking about this correctly besides the advantage of owning platinum at a specific highly desirable location such as Hawaii which has higher MF points?

Just came back from the Big Island and got to check out the Bay Club. I stayed at AirBnB during that stay and 8 nights cost me 2k. Need math to make sense. I work in very flexible industry where I can make my own schedule and usually go on 6-10 trips a year.

 

[alwysonvac]

Been reading through many thread as well as picking brains of family friend who is an HGVC owner. My current thought process is that it more advantageous to own an HGVC with lower MF such as Vegas or Orlando timeshares and use the points to book at other HGVC properties. Am I thinking about this correctly besides the advantage of owning platinum at a specific highly desirable location such as Hawaii which has higher MF points?

Just came back from the Big Island and got to check out the Bay Club. I stayed at AirBnB during that stay and 8 nights cost me 2k. Need math to make sense. I work in very flexible industry where I can make my own schedule and usually go on 6-10 trips a year.

JMHO… if AirBnB works for you then you may want to stick with renting.

You’ll have the flexibility to travel anytime you want with cash rentals. You can also take advantage of other rental sites as well such as Bargain rentals at Redweek.com (link), TUG Marketplace (link), exchange company rentals (link), etc.

Timeshares won’t necessarily save you money. There’s the initial purchase price (you’ll save a lot buying resale) plus the increasing fees (annual maintenance fee, reservation fee, banking fee, exchange fee, etc). Point requirements for new locations will only continue to increase as we have already seen with the latest resorts on Oahu, Big Island, Maui, Cabo, Barbados, NY, Chicago and DC resorts.

Here are the links to the 2021 Club Reference Guide and 2021 Club Point Charts.

2021 Point Chart and Open Season Rates
https://d1m2ucn09z2f8d.cloudfront.net/static/documents/7131a677-57b3-47da-9709-c8a63f3f3b20/HGV Points Open 2021-4.pdf

2021 Club Reference Guide (includes the list of additional fees)
https://d1m2ucn09z2f8d.cloudfront.net/static/documents/85cee84d-8a8b-443a-8f3a-6d587075219c/HGV 2021 Rules Booket-4.pdf

Good Luck and welcome to TUG

 

[BingoBangoBongo]

I struggled with TS Math for a long time, but earlier this year I bought a 7000 point Annual 1 BR Grand Platinum at Elara (7000 pts) and a 12,600 point Odd Years 1 BR Premier Platinum. My purchase price for both was just over $5,000 each and the closing/transfer/activation fees added roughly another $5000. My cost per point for MF’s is right around 12.4 cents. This gives me on average 13,300 per year which is probably more than most people need. We can travel off season and here are two trips we’re doing this year:

7 nights at Ocean Enclave (Myrtle) in Mid April in a 1BR Premier (Highest 1BR) for 5800 points. Ignoring my initial costs that works out to around $103/night.

10 nights at Kingsland On the Big Island in early October in a 1BR Premier (highest 1BR) for 12,180 points. Ignoring my initial costs thats about $151/night.

I could have booked lower point 1 BRs for both of these trips but have some extra points to burn this year. If I wanted to I could have reduced those /night costs by 25-30%.

I’m not ignoring the initial costs but I think if I wanted to sell either of my deeds now I could probably get most of the $10,000 back. Who knows what the future holds. I do look at the $5000 in closing/transfer fees as a sunk cost but I hopefully have a timeframe of at least 15 years to spread that over.

Read through as many threads as you can and learn from what many others have posted.

(Edited to update MF cost per point and nightly rate)

 

[Jason245]

I have a different philosophy than most here. I view HGVC membership more from a cashflow perspective than an investment. I bought for nothing at bay club, pay higher MF than Vegas and while everyone tells me that in 10 years they will be ahead of me, I am not competing against other people... I am competing against how much cash would have gone out of my pocket on an AirBnB rental in a location I wanted to go anyways.

Every year I do the math to see if I saved money, and so far it is working out for me, and when it doesn't work out, or I know I don't want my ownership anymore, guess what... I can sell it for what I paid... nothing.

 

[BingoBangoBongo]

I have a different philosophy than most here. I view HGVC membership more from a cashflow perspective than an investment. I bought for nothing at bay club, pay higher MF than Vegas and while everyone tells me that in 10 years they will be ahead of me, I am not competing against other people... I am competing against how much cash would have gone out of my pocket on an AirBnB rental in a location I wanted to go anyways.

Every year I do the math to see if I saved money, and so far it is working out for me, and when it doesn't work out, or I know I don't want my ownership anymore, guess what... I can sell it for what I paid... nothing.

I understand your approach, but I do think you have to balance capital cost and MF’s. There are a boatload of deeds out there that I wouldn’t touch for free.

 

[Jason245]

4800 pts eoy bayclub contracts.. I can scale up or down as I wish... most of the time closing included... as long as you dont stay in vegas or orlando you generally end up ahead pts/room cost wise.

Sent from my SM-N950U using Tapatalk

 

[ljmiii]

I work in very flexible industry where I can make my own schedule and usually go on 6-10 trips a year.

If that means you are free to choose your own vacation schedule 9 (or 12) months in advance then HGVC might be for you. But if that means you like having the flexibility of 'last minute' vacations, then you are much better off using cash.

Our HGVC properties are limited to the HHV Lagoon Tower at which we know when we will stay a year in advance and having the ability to book an oceanfront 2BR villa in Waikiki at a *very* reasonable price is completely worth it to us. If you don't have that fixed vacationing in mind, Vegas offers a good mix of low MFs/point and reasonable initial price. But you will be much happier with your purchase if you can book 9 months in advance.

 

[fernow]

VRBO Benefits: Flexibility, no obligation, variety, unlimited locations
HGVC Benefits: Consistent product, Resort Amenities, relatively known cost

Cost of HGVC will go up but at somewhat slow and predicable rate. VRBO rates may rise or fall, possibly substantially.

Obligation is the big issue.

I am somewhat amazed however that nobody is adding the lessons learned from 2020 in the cost/benefit analysis of timeshare purchase.

How many years can you afford to pay fees for a product you are not allowed to use?

 

[dayooper]

VRBO Benefits: Flexibility, no obligation, variety, unlimited locations
HGVC Benefits: Consistent product, Resort Amenities, relatively known cost

Cost of HGVC will go up but at somewhat slow and predicable rate. VRBO rates may rise or fall, possibly substantially.

Obligation is the big issue.

I am somewhat amazed however that nobody is adding the lessons learned from 2020 in the cost/benefit analysis of timeshare purchase.

How many years can you afford to pay fees for a product you are not allowed to use?

I think the cost of VBRO and AirBnB will rise fairly quickly. As these become more and more popular, the fees to use (for both the renter and owner) will rise. Many places could possibly start to tax these at higher rates forcing the rates even higher. There are new ordinances that prohibit renting in residential areas. This has nothing to on people buying property just to rent on these sites, forcing rates even higher. People see a way to make money and they will exploit it.

There is a place for these rental sites, but like most things, greed will force rates up.

I personally like my HGVC. Yes there an obligation, but if I bought correctly (which I did, thanks Tug), I should be able to get out from under my obligation pretty easily. The amount I spend per week is much lower than what I would spend for comparable lodging anywhere else. The consistency of my accommodations are a huge plus for me. I know what I’m going to get and can plan my vacations accordingly. I know what to bring and can pack my travel minimally.

As far as your comment about not being able to use what you own, I‘m not sure I understand. Every person that owns HGVC has right to use any of the resorts whether theirs is open or not. You just have to find availability. I was able to use my 2020 and 2021 points for vacations this year no problems. Yes, a traditional TS would have had those issues, but that’s not HGVC.

If you are talking about just plain not using it, that’s on the owner. I believe there are many owners in this system don’t know how to use it and, because of their lack of knowledge, are easily manipulated by salesman. My discussions with owners in the “hot tub” really opened my eyes to how luck I am to have found this group. I thought about starting a thread titled tales from the hot tub, but I haven’t yet.

 

[fernow]

I think the cost of VBRO and AirBnB will rise fairly quickly.
...
As far as your comment about not being able to use what you own, I‘m not sure I understand. Every person that owns HGVC has right to use any of the resorts whether theirs is open or not. You just have to find availability. I was able to use my 2020 and 2021 points for vacations this year no problems. Yes, a traditional TS would have had those issues, but that’s not HGVC.

I agree. Owning and renting via VRBO etc is likely to become more expensive and complicated. What that will do to real estate sales in vacation destinations will be interesting.

Regarding the "not use" comment; Yes points were transferred for free from 2020 to 2021 but unless your life is such that your time, travel options and travel budget are unlimited, the extra 2021 points are worthless. Can't use them if I can't take the time off or afford the now increased cost of travel.

My point is, we traveled only where we could drive last year. Not because that's what we wanted but because of what was allowed and even that was using a broad interpretation of the rules. I don't want to get into the weeds of discussing whether or not the shut down stuff was appropriate. Right or wrong, travel was restricted.

"New normal" is the catch phrase. What is the "new normal" for travel? How many times in the next X years will it be shut down? How will travel costs, airfare, rental cars, etc change? What will you be allowed to do when you arrive at your destination? Hawaii as an example keeps talking about making "changes" to lessen the impact of visitors on locals when travel fully re-opens. What changes?

So... factor that stuff in or assume all goes back to the way it was? At least worth consideration.

 

[dayooper]

I agree. Owning and renting via VRBO etc is likely to become more expensive and complicated. What that will do to real estate sales in vacation destinations will be interesting.

Regarding the "not use" comment; Yes points were transferred for free from 2020 to 2021 but unless your life is such that your time, travel options and travel budget are unlimited, the extra 2021 points are worthless. Can't use them if I can't take the time off or afford the now increased cost of travel.

My point is, we traveled only where we could drive last year. Not because that's what we wanted but because of what was allowed and even that was using a broad interpretation of the rules. I don't want to get into the weeds of discussing whether or not the shut down stuff was appropriate. Right or wrong, travel was restricted.

"New normal" is the catch phrase. What is the "new normal" for travel? How many times in the next X years will it be shut down? How will travel costs, airfare, rental cars, etc change? What will you be allowed to do when you arrive at your destination? Hawaii as an example keeps talking about making "changes" to lessen the impact of visitors on locals when travel fully re-opens. What changes?

So... factor that stuff in or assume all goes back to the way it was? At least worth consideration.

I think if you are flexible with your points, you can always make it work. I know some are members just for Hawaii, but things happen and we all need to be flexible. Having the right amount of points is important and being able to use them at higher.

While I agree with the notion of the new normal, resort destinations have to come up with something to protect their income from travelers. While shutdowns like 2020 can happen again, we now have the experience of being through this and can draw on our experience to craft new procedures. Take what worked, changed what didn’t and make it work for everybody. If we don’t, it won’t be just us that’s will lose out. The resorts will struggle as well, especially the smaller independents.

 

[CalGalTraveler]

How many years can you afford to pay fees for a product you are not allowed to use?

???? Maybe for fixed weeks. We have lost nothing with banking our points.

 

[brp]

How many years can you afford to pay fees for a product you are not allowed to use?

I have a feeling that "afford" may not have been the best word. I can "afford" to pay fees indefinitely and not use the points. I think the real question would be "how many years can you 'tolerate" paying fees for something one can't use."

That's a better question. But, as others have said, we had no problem using ours. Well, not completely true. We had a stay in Waikoloa for us and family. OIur tests did not come back in time, so we couldn't go. They used the points, though

We're pushing points forward, though, mainly as a result of buying more than we need now at a good price against pending retirement when we will be able to use the extra. So these are points we knew we'd lose this year, regardless of the pandemic.

Cheers.

 

[JohnPaul]

We own strictly for NYC. This year we have Vegas, Park City and Carlsbad with a return to NYC in December.

I consider lost points a sin so found places to go.

 

[fernow]

We have lost nothing with banking our points.

And that is great for you. So now you have two years of points and perhaps your life and finances are such that you can take twice as many vacations in 2021 than you might otherwise have taken, factoring in that each of those trips may be substantially more expensive then you normally budget.

Not so for everyone.

Although "tolerate" may be a better word as brp suggests, "afford" is a real question for many. Not everyone has the money or the time off required to double up on vacations in one year.

Perhaps you move the extra points forward to next year and then there is a new shutdown for some reason and so now you have three years of points. No problem, take three times as many trips the following year.

I will continue to make the point that the world's "new normal" should factor in to many decisions, including whether to undertake a timeshare obligation. Buying a timeshare may still be a "good" decision but all factors, including the lessons of 2020 should be considered.

 

[CalGalTraveler]

@fernow the vacation money that would have been spent last year goes into this year's budget. Where's the loss if you budgeted for it? We also will bank extra 2021 points into 2022 thus extending the time.

Now if one doesn't have money to pay for a trip every year, then that's a different story and shouldn't own a timeshare in the first place.

Sorry, I don't see the issue.