Thinking of Buying Timeshare

[cbyrne1174]

I always liked the Grand Desert over a Florida resort because of what you stated. My thoughts changed when last time I was in Vegas I felt the earthquake that hit east of LA. This did make me wonder how well most of the buildings were built in Vegas where they are not anticipating any earthquakes.

I wouldn't worry about earthquakes in Las Vegas. It has a medium hazard to the point where you can feel them, but the buildings are built to sustain them.

 

[Fredflintstone]

And that’s why I prefer renting. I use the timeshare business model to pay for my costs through stock producing capital gains and dividends AND I am not locked in. I can go on vacation because I want to, not because I have to get rid of points. Since my currency remains cash, I enjoy the stability of world markets. The USD overall is stable and accepted almost anywhere. Also, I can control exchange through USD by getting the best rental deal possible. If, let’s say, I am a bit short, I don’t need to spend on vacations because I don’t need to worry about expiring points. Or, I am not victim to a corporation changing points value. My risk is that the USD collapses. However, if it collapses, customers (owners) also suffer because the MF skyrockets too.

Timeshares do have their value especially in places like Hawaii. Overall, costs in those prime areas are higher renting than owning. In that case though, I see the added costs as insurance against being locked in.

Also, owners benefit from a beautiful product whereas renting can be hit and miss.

I do know some very savvy TUGGERS here know how to stretch their points to maximize and that’s great! They also know where to buy the best MF friendly resort to get maximum benefits. I too, know how to stretch my vacations too except I use USD and rent wisely.

Both ways work well EXCEPT mine is without contract and owners with.


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[Fredflintstone]

I wouldn't worry about earthquakes in Las Vegas. It has a medium hazard to the point where you can feel them, but the buildings are built to sustain them.

View attachment 16026

It looks like, from the map, FL has lower Earthquake risk than Vegas. At least in Vegas, there is no risk of hurricanes.


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[kaljor]

I always assumed that the resorts are managed by the HOA. They have to raise enough money to maintain the place, and in the case of a timeshare. maintain it as close to first class operation as possible. That's not inexpensive. I would also assume that part of the MF goes to cover the Management Fee that Wyndham takes to oversee the whole Club. Program fees allegedly go to run the whole system that is needed to keep track of the points and bookings and the other things involved in making the simple experience we have when making a reservation.

I think the bulk of the profits come from sales, pure and simple. They are a sales organization at the most basic level. And they seem to make a nice profit from that. So I wouldn't worry about them going out of business if too many people buy resale. They can probably increase their revenue anytime they want by just lowering the "rack rate" they charge for developer points. How many new customers could they potentially bring in if they cut the cost in half? And since there is no physical product involved, there s no increase in the cost (to them) of what they're selling.

Not that I expect them to do this. A business charges what they believe the market will bear, so they are probably still selling a bundle of developer points at $253 or a bit less.

If I'm off base on this, I'd love to know where.

 

[cbyrne1174]

It looks like, from the map, FL has lower Earthquake risk than Vegas. At least in Vegas, there is no risk of hurricanes.


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None of the FL properties have low MFs for that reason. Only Panama City is low because its a 25 story tower and costs a ton of points to stay at. I stayed there in the cheapest studio they had for 1 Saturday night when I was living in Mobile, AL and it was still 25,500 pts. Growing up in FL, I've learned how to replace lanai screen like a frickin' champion.

 

[kaljor]

Only Panama City is low because its a 25 story tower and costs a ton of points to stay at.

I think the second factor is the real reason. I think the Maintenance Fee is low because its spread over a very large amount of points required for a stay. I think that's why places like NYC, Clearwater, Austin, SF, and National Harbor have lower MF's.

 

[paxsarah]

I think the second factor is the real reason. I think the Maintenance Fee is low because its spread over a very large amount of points required for a stay. I think that's why places like NYC, Clearwater, Austin, SF, and National Harbor have lower MF's.

If Ron were still active on the forum, this is where he’d point out that maintenance fees at those resorts are not low - they collect a huge amount of MFs, and if you calculate out the per-night or per-week cost of staying at those resorts, it’s quite expensive. But because each week’s stay at those resorts requires so many points, it results in a low maintenance fee rate when expressed in terms of dollars per 1,000 points.

 

[Eric B]

If Ron were still active on the forum, this is where he’d point out that maintenance fees at those resorts are not low - they collect a huge amount of MFs, and if you calculate out the per-night or per-week cost of staying at those resorts, it’s quite expensive. But because each week’s stay at those resorts requires so many points, it results in a low maintenance fee rate when expressed in terms of dollars per 1,000 points.

I would take that idea with a grain of salt or two. Those resorts are relatively expensive to stay at, but relatively inexpensive to own at while staying elsewhere in the Wyndham system. They would have the benefit of lower cost points, but those points are associated with an ARP at a higher cost destination; if you want to go there, the cost would be a wash since you could consider it as though you owned there directly (which you do) - you could also own elsewhere and reserve at the 10 month point for the same number of points that may have cost you more or less per point. Best I could say about whether you should think about those resorts having high MFs is that it depends on your perspective and what you are considering for the use of the points.

 

[GRapuser]

Wyndham makes money in many different ways. Each HOA pays them a fee for managing the resort (unless it is "Not Managed by Wyndham"). Wyndham would lose money if the HOA voted to terminate their relationship with Wyndham and choose a different management company, but that would mean that the members would lose their ability to exchange within Club Wyndham. The company definitely makes money on sales and all of the various fees that are charged as well. My guess is that a significant portion of the sales price goes into commission and maintaining the sales centers, which is why the Telesales rep that I dealt with said that their price is so much lower. Both retail and resale purchases are important for Wyndham, because if people stopped buying resale and the current owners defaulted, the maintenance fees would increase for everyone else and/or the owners might go with another company.

As for new locations, Wyndham has been contracting with other developers to build many of the more recent locations, which they are willing to do because they know that there will be a return on their investment with the points sold. There are obviously reasons to consider buying retail vs resale, and each person should weigh the pros and cons. Unfortunately, most of the sales centers tend to lure in people who lack knowledge of the system for an initial retail purchase. Some will choose to add points via retail, others might add via resale, while some will just stay with what they have or turn it back in after a few years.

 

[SNA27]

I always assumed that the resorts are managed by the HOA. They have to raise enough money to maintain the place, and in the case of a timeshare. maintain it as close to first class operation as possible. That's not inexpensive. I would also assume that part of the MF goes to cover the Management Fee that Wyndham takes to oversee the whole Club. Program fees allegedly go to run the whole system that is needed to keep track of the points and bookings and the other things involved in making the simple experience we have when making a reservation.

I think the bulk of the profits come from sales, pure and simple. They are a sales organization at the most basic level. And they seem to make a nice profit from that. So I wouldn't worry about them going out of business if too many people buy resale. They can probably increase their revenue anytime they want by just lowering the "rack rate" they charge for developer points. How many new customers could they potentially bring in if they cut the cost in half? And since there is no physical product involved, there s no increase in the cost (to them) of what they're selling.

Not that I expect them to do this. A business charges what they believe the market will bear, so they are probably still selling a bundle of developer points at $253 or a bit less.

If I'm off base on this, I'd love to know where.

Not my understanding. Timeshare weeks or points are real property. Wyndham can't just conjure them out of thin air!
As for the cost, or more precisely PRICE, it's decided by the market. If you cut the price by half, you would have to more than double the sales! Otherwise, it's a self-defeating exercise that would tick off a lot of retail owners who bought high!

 

[kaljor]

I absolutely don't expect them to cut the price in half, but my point was that they can increase revenue in the short run anytime they feel the need to by lowering their sale price. It wouldn't have to be broadly based, they wouldn't have to announce it, just find creative ways to offer "one time discounts" while at an update session. Or in a targeted e-mail. Also, they actually can conjure points out of thin air. It's called Ovations.

I myself have flirted with the prospect of becoming VIP Silver, and at these updates I have repeatedly tried to get a more reasonable (in my opinion) price to do this, but they do not seem willing to accept a lower price.

I recently posted a new topic in this forum asking how much one would be willing to pay for VIP Silver. It got a few interesting replies, but not all that much discussion followed.

 

[SNA27]

I absolutely don't expect them to cut the price in half, but my point was that they can increase revenue in the short run anytime they feel the need to by lowering their sale price. It wouldn't have to be broadly based, they wouldn't have to announce it, just find creative ways to offer "one time discounts" while at an update session. Or in a targeted e-mail. Also, they actually can conjure points out of thin air. It's called Ovations.

I myself have flirted with the prospect of becoming VIP Silver, and at these updates I have repeatedly tried to get a more reasonable (in my opinion) price to do this, but they do not seem willing to accept a lower price.

I recently posted a new topic in this forum asking how much one would be willing to pay for VIP Silver. It got a few interesting replies, but not all that much discussion followed.

No, not even Ovations can cook up points that are not backed by real 'interval' property with available usage. If they buy a stripped deed without 2020 usage, they can't sell it to someone with 2020 usage, if that's what you implied!

I would think telesales price would be the bottom.

Had I been well-informed about TS and resale value etc, would I have plunked down ~40k for Temp VIP Silver back in July 2016? Most unlikely! But, it's done! Moving hand hath writ!

 

[kaljor]

I only meant that the contracts they take back through Ovations are free. Stripped points or not. Those points will eventually come back to Wyndham at no cost.

 

[SNA27]

I only meant that the contracts they take back through Ovations are free. Stripped points or not. Those points will eventually come back to Wyndham at no cost.

Their 'COST' has very little to do with YOUR PRICE! Market does!