Have you looked at purchasing one (or more) of the SW Florida properties? I would think that if you got a fixed week 51 or 52, that would meet your requirement on renting (you would have to research that). Most, if not all, of the SW Florida properties have in-house sales offices and they handle resales for that property -- but since they are considered HGVC sales, the purchases count toward Elite levels (this is how I obtained Elite). And although weeks 51 and 52 sell for the most, you can find some for less than $2/point if you are patient -- way less than the $5-6 in your budget. I own a week 51 and 52 on Marco Island (two different properties), and my average price/point for those two weeks was less than $1.50.
Thanks for the suggestion! I actually was able to find a week 52 and week 1 unit (two weeks) for a total of less $2.75 per point, and will count to my Elite Plus since purchased through HGVC resales... I did not realize you could get elite credit from purchasing resale through HGVC, but it appears you can. Awesome. Thank you for the suggestion.
I am very confused by this.
You already own 15800 Developer purchased points with two units, and have an unknown number of points from 4 others. (I am assuming you have spent ~80-100k on the developer units + probably another ~20k on resales). I would think at this point you would know what was rentable and what wasn't given that you have spent $100-120k on HGVC properties.
Even at $4/point your 8200 points cost you over $30k. Even if you rent it and earn $500/year your 30k earning 2.4% with a 10 year treasury is still more profitable for less work ($720/year interest vs $500/year rental). Bump it up to $5 or $6 a point and the math becomes even worse.
Jason245, you are looking at this from the perspective of a pure investment and that is a valid analysis. However, that is not my only criteria.
First of all, I am using the rental rate of 1.5x maintenance fees to get rid of properties that have no intrinsic value at all (e.g., Vegas and Orlando mostly). If you cannot rent the property consistently for more than the maintenance fee, there is zero benefit to owning a timeshare. Having a consistent rental value implies that the timeshare week has real value and could be resold. No more than that, but it is a good filter to get rid of the garbage properties. I still do a discounted cash flow to approximate what the property is really worth intrinsically using realistic rental values from VRBO and Redweek. This is how I valued all of my purchases so far (including the developer properties I purchased).
I use a DCF instead of a comparison to investment rates of return because I actually use my timeshare home weeks at least 50% of the time. If I didn't have the timeshare weeks, we would pay $2,500 - $5,000 per week for 2-3 bedroom units during the high demand weeks that we usually travel. When I don't use the home weeks, I can rent them out for those values (assuming a quality property, high demand week, location, etc.). A better way to look at the financial "benefit" of owning for me is a discounted cash flow, which assumes a net annual "value" equal to the typical rental price (or equivalently, the comparable rental price I would pay for usage if I didn't own the timeshare), less maintenance and taxes, and assuming a resale after a period of time (7-10 years depending on the property). I calculate the resale value based on what I see comparable properties advertised for at resale currently (which may actually undervalue the resale, since it is at least possible that inflation and HGVC's recent push to increase sales prices and exercises of rights of first refusal could increase resale value slightly over the next 7-10 years, but I don't include that possibility in my calculation) ... for my recent purchase I assume resale at exactly what I paid since this is at or below market at $2.75 per point for two high demand fixed weeks in south Florida.
And, for me, the Elite Plus benefits have real value. I would pay cash just to get upgraded to Elite Plus if that were an option, probably around $5,000 if it were offered as a pure cash upgrade because the benefits for me are worth that (just the option to convert current year unused points to HHonors, and availability of European properties is worth that to me). Alas, not an option with HGVC so you have to add in value for that benefit.
So if you want to run the analysis:
Value of two vacation weeks @2.75 per two prime vacation weeks (and 12,000 points total):
$5,000 (value to me of getting to Elite Plus tier)
$34,990 (discounted cash flow assuming a conservative net rental or actual usage value of $2,000 per year after maintenance/taxes, and sale in year 8 at same price I paid, with discount rate set to 4.5%)
Total: $39,990
Since I paid $33K, I feel good about this. Even ignoring the value of Elite Plus to me, I am still at above break-even just on the discounted cash flow.
