So if someone (a salesman at FF Waikiki) tells you it will be 400,000 points to rent for 1 week in a 2 bedroom what does that equate to $$ wise?
I assume you mean FF points right?
It depends on what your travel plan is, and how flexible you can be.
If you decide you must be there when it starts, and want to be there every year, and you will travel only in the prime season (the prime in that resort is wk 52, it will require 500k in lower unit, and 575k in higher unit and and 757k in president unit) and you believe the only way is to own at that resort start now, the retail price I heard is from $180 per 1K to $100 per 1 K. The more point you purchased, the better you will be able to neg.
The OP get $21000 for 154k. So it is 137 per 1K, and 400k means $55,000 plus MF and club due. Usually it starts with low for 1 or 2 years, then up quickly. At this moment, it usuaully start with $2 per 1k then $4 to $5 over 1K. And if you pay all cash, assume you use it for 30 years, and give it out, you loss 55000/30 per year + 4.5 * 400 (MF, assume 4.5 avg in all 30 years, which is very unlikely) + 55000 * 6% (opportunity loss assume it is 6%), or the total purchase price *(opportunity loss + 1/live time usuage) + MF/per K * total K. If you use 6% and 30 year, you will look at 9.3% per total purchase price. or about $7000 per year. If you borrow some from developer, I believe the rate is around 14%, so you will add these interest you pay for the life in.
Assume you borrow all, the term I believe is 7 year, you pay total around $86,500. So your cost will be around $9,500
If you don't mind to wait unitl the resort hit the resell market, then it may be 3 to 5 years, but the recent resell price is around $10 per 1 K to $80 per 1K. The bigger the point, the less the dollar per point. The earily you jump in, the more likely you will pay higher
Now, the question is do you want to be there every year? If the answer is yes, then you will try to get 400k there. Assume you jump in every opportunity you can get when it hit the market, if the current resell trend does not change, you probably end up paying $15,000 for 400k and at that moment, the MF is at $4 to $5 and may have a few year before it hit SA.
In this case, you jave wait say 5 years, so you may only use it for 25 years more
So assume you pay all cash, it is 15000 * 10% + 4.5 * 400 or $3300.
Now assume you are patient enough to only buy it at the price you preset, and assume you did not put too much pressure on your self your preset amount is $20 per 1K, you end up paying $8000 at longer year, and may clsoe to get a SA, but you manage to include SA in your total price. So say you have spend 10 years to get that total point, and the MF is 4.5 still, your cost per year is
8000 * 11% + 4.5 * 400 or $2680
If you do either way, make sure you call at 13 month at 8:00 am East Time exact, you chance of fullfill is around 1/30 (since a good portion owner will not use the resort, and some owner will buy only a fraction of points so can not make any sense to fly here to make a vacation).
Now, assume you want be there all the time, and assume you realize you can take any open at 10 month, and you believe your chance is good, so you buy at resale for any contract that has less than $5 in MF at around $10 per 1K.
You will spend 1 to 2 years to get all the points, and say you pay $5 MF (although with careful planning, you probably end up paying $4 per 1k).
Your cost will be (still paying all cash)
$4000 * 9.5% + 5 * 400 or $2380.
Now, let us go one layer. Assume you now realize all you want is be there once every 3 to 4 years due to the travel cost. And you realize FF allows you to move points around internally for 3 years. So you can pool all 3 year's point together. So now you decide instead of 400K, you really need is 160k, so you can pool the point every 2 or 3 years and take 10 month vacation.
You go to resale market, spend 1 month at Oct, get that many points for $10 per 1K, with MF 4.5 per 1 K,
Your cost is, now, your opportunity is every 2.5 years, and you still spend 400k per trip, and you have cost to put the point into the credit pool every year you put it will be $25
1600 * (6% * 2.5 + 1/30) + 4.5 * 400 + 25 * 2.5 = $2155.78
If you do this, call at exactly 10 month, it will depends on how the owner takes the inventories, then VIP takes the inventories.
Now, let us say you don't care about the view, you will only be there once after you realize there may have over 500 top notch resort around the word, and your goal is try to visit as many as possible,
You watch the sighting, so it get developer deposit, get a deposit with your lowest MF, get one week vacation.
The cost is close to your MF, you probably do it once or twice depends on how many week you get in that batch and how many deposit developer makes. Assume you put in $200 MF week, with exchange fee, RCI membership fee, you are looking at $400 per week and done with it.
Or, if you purchase a few points and rent point from members. It is no guarantee what the renting price you are looking at, since you have no points purchase tie to that trip, you don't incur loss in the purchase price. Renting is around $6 at this moment, say it stay at $7 per K.
You are looking at
6 * 400 or $2800 You may not get at 10 month period. You need to prepay when someone rent out the point, it probably 6 to 7 month on your travel period.
Or you realize there are group people rent the week in eBay, and you bid on their inventory. Assume they get with 50% discount, and ask for $10 per 1k,
you are looking at
10 * 200 or $2000, but this is assume the landlord will not charge premium, and the rental market will not go crazy on the property.
Or you realize RCI is put this on bid, and you bid on it. Including sale tax, you may end up less than $2000, but you may not get any at all too. But this is pure assumption.
Or you realize there is a possible airline resort package, with Airline, it may only add $200 per person in the resort stay. It never know if this resort will be there or not, but you think the other package they put is competiable, so with 6 people, you get $1200 per trip cost. But this is just my assumption, have no really databack it up.
Or you could work for a boss, that give out this condo as bonus, and you pay $0 (well technically, since you actually may loss pay raise) You may consider it cost you few thousands since with pay raise you will get it every year
In short, your cost is $400 (one or two times exchange) to $10,000 (retail purchase)
That is call the flexibility of the point. You can use it any way as you see fit as you like.
Jya-Ning