Highest multiple of rack rate divided by MF

[SteveL92]

I am wondering about TUG thoughts on the weeks/resorts combo that have the best ratio of the rack or rental rate to maint fees (e.g. $2000 a week rack divided by MF of $500 would be 4:1). This seems like a quick and easy measure of value, though not a perfect one. Resale purchase price is difficult to predict. Maint fees are specified. Rental prices vary a lot.

Since MF doesn't vary by time of year, the peak weeks would seem like these rank at the top. From what I've seen of other posts, Marriott and Hyatt Vacation destinations seem to command pretty steep rates, but also have fairly high MFs.

 

[gmarine]

I am wondering about TUG thoughts on the weeks/resorts combo that have the best ratio of the rack or rental rate to maint fees (e.g. $2000 a week rack divided by MF of $500 would be 4:1). This seems like a quick and easy measure of value, though not a perfect one. Resale purchase price is difficult to predict. Maint fees are specified. Rental prices vary a lot.

Since MF doesn't vary by time of year, the peak weeks would seem like these rank at the top. From what I've seen of other posts, Marriott and Hyatt Vacation destinations seem to command pretty steep rates, but also have fairly high MFs.

I suppose it could be a way to measure the value of a week. Using that measure, St James Club Antigua comes out extremely well. Maintenance fees are $450, current resort rental rates for the weeks I own are $6200 per week.

 

[huestous]

I am wondering about TUG thoughts on the weeks/resorts combo that have the best ratio of the rack or rental rate to maint fees (e.g. $2000 a week rack divided by MF of $500 would be 4:1).

I don't believe it is a very useful metric. It's a bit too much like comparing actual purchase price to the developer price or the asking price. The asking price carries no information about the value of a week, and the rack rate often bears little resemblance to the market rental rates.

 

[JudyS]

I agree with huestous that it would be important to know what the resort actually rents for, rather than just the rack rate.

That said, I believe that one of the best ratio of MFs to actual rental price would be found in certain nights (weeknights) in certain rooms (standard view studio) at my home resort, Disney's Boardwalk Villas. For an MF of about $45, I can get a room for which Disney charges about $300 including tax.

 

[vicneo]

also very obviously
as MF stay more or less the same no matter what # week
and rental rates vary with desirability of week

so the more desirable the week - 51 52 july4 etc, the greater the ratio

 

[CaliDave]

Many of the weeks that have high rack rates are also VERY expensive to buy.
Marriott Maui week 52 oceanfront might have a rack rate of $7K, but the week might cost you $60K to buy.

 

[juice920]

I am wondering about TUG thoughts on the weeks/resorts combo that have the best ratio of the rack or rental rate to maint fees (e.g. $2000 a week rack divided by MF of $500 would be 4:1). This seems like a quick and easy measure of value, though not a perfect one. Resale purchase price is difficult to predict. Maint fees are specified. Rental prices vary a lot.

The question that hits me is what would you want to use that measure for? If you are using that as a measure to help decide the best places to buy I'd question the usefullness. If you are buying a week that you want to use every year then what does "value" tell you? If you are using it then the key is buying into a resort that you like at a week that works well for you. The most relevant number in that case is purchase price for similar units/weeks to provide a guide to current fair market value.

If you are buying a week because you want to trade it then that value measure may be seriously misleading. I'm new to this whole thing but from everything I've read, here and elsewhere, demand is the most important attribute that will improve you trading value. However, to assume that rack rate, or even rental price, is a fair proxy for demand is likely inaccurate. Basic economics tell us that as demand increases so does price. But when it comes to timeshares there other factors, location, amenities, etc. that come into play that alter rental prices dramatically regardless of resort demand.

 

[gmarine]

The question that hits me is what would you want to use that measure for? If you are using that as a measure to help decide the best places to buy I'd question the usefullness. If you are buying a week that you want to use every year then what does "value" tell you? If you are using it then the key is buying into a resort that you like at a week that works well for you. The most relevant number in that case is purchase price for similar units/weeks to provide a guide to current fair market value.

If you are buying a week because you want to trade it then that value measure may be seriously misleading. I'm new to this whole thing but from everything I've read, here and elsewhere, demand is the most important attribute that will improve you trading value. However, to assume that rack rate, or even rental price, is a fair proxy for demand is likely inaccurate. Basic economics tell us that as demand increases so does price. But when it comes to timeshares there other factors, location, amenities, etc. that come into play that alter rental prices dramatically regardless of resort demand.

For the most part the rental price that the resort commands is absolutely a way to tell how the resort will trade and also will be an indicator of the value of the timeshare.

A very expensive rental rate tells you the resort has very high demand. High demand = high trade power.

Just look at some of the most expensive resorts to stay at. Atlantis, Westin St John, St James Club, Four Seasons, Marriotts in Hawaii etc. They all have very high rental rates and they all have very good trade power.

 

[JudyS]

The question that hits me is what would you want to use that measure for? ...

I think it would mostly be useful to help decide about buying a unit primarily for renting. I'm not sure it's all that useful for much else. I wouldn't use it for determining trade value because there are too many other variables, such as downward VEP restrictions, internal exchange priority groups, and the number of resorts a particular exchange company has in that area.