Reader Questions: My Personal Timeshare Strategy for Purchasing Timeshares (Details, Pricing and Sources Disclosed)
As I have stated before, one of the reasons that I started this blog was that I get tremendous value out of our timeshare(s) and absolutely love and actually prefer staying in timeshares. Most people cringe at the word "timeshare" so I figured that I was doing something right with my ownership and thought that others can share in my knowledge and learn from the various strategies that I implement.
In this post, a reader, Jonathan, asked me the following:
Before I answer these questions, I wanted to thank my reader Jonathan for asking these questions. I think that it is important that I provide information that my readers actually want to read rather than what I "think" you want to read. If you have any questions, please reach out directly and I will do my best to answer them. A few other readers have reached out and I will be getting to their questions in time!
Let's take these one by one.
What timeshares do I own?
I currently own three timeshares. I own 2 weeks at the Hyatt Beach Club which is part of the Hyatt Residence Club. I own a third timeshare in Sedona, Arizona that I inherited through my grandfather. The Sedona, Arizona timeshare is a fairly recent acquisition as is the second week at the Hyatt Beach Club.
How much did I pay?
I own Week 47 at the Hyatt Beach House and just acquired Week 25 at the same property. My first purchase of week 47 was in 2006 (before the Great Recession) and I paid $6500.
The second week at the Hyatt Beach House, week 25, was just completed last week and I paid $2,000.
Why did I purchase these timeshares?
My First Hyatt Week:
In early 2000's, I became interested in the world of frequent flyer miles and hotel points. The easiest way to accumulate these points was through credit card offers. I took advantage of many of these offers and I was able to travel around the world for free in very nice hotels while I had a very limited income.
In 2006, I moved to Austin, Texas and received an timeshare solicitation offer for the Hyatt Wild Oak Ranch in San Antonio, Texas. My girlfriend, (now wife) and I ending up taking them up on their offer to spend a weekend at the Hyatt Wild Oak Ranch in exchange for the standard 90 minute presentation offered.
We had been to a few other timeshare presentations and while intriguing, they never seemed to make complete sense to me. Plus, we were broke and were both beginning careers where we had limited vacation time.
The Hyatt presentation was fine and they showed me the exchange chart. When I saw the exchange chart, I realized that, like frequent flyer miles and hotel points, there were opportunities to maximize your points in order to travel for multiple weeks while only owning one week. I studied the chart and saw that there was value to be had, if used properly.
The salesperson offered me a package somewhere between $20,000 and $30,000. Being broke, these numbers were simply out of reach but this was the beginning of my interests in timeshares.
I had been an active user on Ebay at this time and began looking at various auctions for timeshares. Similar Hyatt weeks that they were offering to me were selling for a fraction of the cost. I negotiated with several buyers and ended up contacting a real estate broker who was able to get me a "deal" on my first timeshare for $6500.
This was in 2006 while the economy was doing very well. I ending up purchasing that week which came with 1300 Hyatt Residence Club points. In 2008-2012 period, my timeshare week was easily selling for $1.00 on eBay as the timeshare market completely dried up.
The reason that I purchased a Hyatt was that I saw value in their exchange chart for those travelers who can travel during off peak times AND they had a stellar property about an hour away from me (Hyatt Wild Oak Ranch). I knew that in those years that we may not travel, at least I had an easy destination to go to where I could use my timeshare.
My Second Hyatt Week:
I just completed the purchase of my second Hyatt week at the Hyatt Beach House. The fact that this occurred at the Hyatt Beach Club was simply a coincidence. I have NEVER been to the Hyatt Beach House and probably will never go (well see...).
Unlike during my first purchase, I am definitely a lot more knowledgable about timeshares. I now have 2 small kids and I knew that I needed more points in order to travel in 1 or 2 bedroom units as often we do.
If you read this blog, I currently tend to maximize our travel by staying in studio units. While they are more spacious than hotels, the kids are getting bigger and we simply need / want more space. My current week does not give me enough points to travel as frequently as we do in larger units.
Hyatt's New Program
As you probably know, Hyatt recently released information on the Hyatt Portfolio Program which is a strictly points based system. I attended a presentation on this new program and it seemed to be similar to the existing program but cost A LOT more with only a few extra perks.
I have been extremely happy with my Hyatt purchase since Hyatt Residence Club points have a very favorable exchange rate through Interval International and can also have very favorable uses for 2 or 4 night stays within the Hyatt Residence Club properties. 3 night and 7 night stays are generally costly and tend to shy away from those exchanges if possible.
Since I was happy with Hyatt, I thought that I would purchase another Hyatt week. Also, with the new program being rolled out, the "legacy weeks" would start being diminished as Hyatt exercised their right of first refusal. I thought that while there were ample legacy weeks available, I would purchase another Hyatt week.
The specific property did not really matter as long as the purchase price was low, the maintenance fees were low and the week came with a decent amount of points.
New Hyatt Chart
A few months ago, Hyatt changed the exchange chart and increased the value of many Key West properties and a couple Florida properties.
In that post, I explained that my existing week, Week 47 at the Hyatt Beach House increased from 1300 points to 2000 points. This was a tremendous win for me as instead of being able to get about 3 weeks in a studio unit while only owning 1 week, this gave me the ability to get approximately 4 1/2 weeks in a studio unit with only owning 1 week.
Since the points valued changed for certain weeks, many existing owners or resellers did not immediately change their pricing. Hyatt weeks that equate into 1300 points do not sell for very much but Hyatt weeks that sell for 2,000 points generally have a decent resale value. The reason is that 2,000 points can get you into most Hyatt properties during peak times. 1300 points is somewhat restrictive in the internal Hyatt system but can be "enough" for those who want to trade exclusively through Interval International.
Due to this unique situation, I spent a decent amount of time looking for these Hyatt weeks that changed point values in the hope of getting a bargain. Many timeshare owners or resellers simply are not well versed in the intricacies of the programs and probably did not realize the overnight change in value.
I attempted to purchase one Hyatt week that equated into 2,000 Hyatt points for a purchase price of $50.00 plus transfer fees ($650) and closing costs which equated to a total purchase price of about $1200. Unfortunately, Hyatt exercised their right of first refusal and bought that unit out from under me.
In a separate post, I'll explain what I learned from this experience and how I altered my strategy for my other purchase which passed Hyatt's Right of First Refusal at a purchase price of $2,000.
How did I find these timeshares?
As I mentioned, I found my first timeshare on eBay. While I located the timeshare on eBay, the seller was a real estate broker and ended up completing the purchase outside of eBay as they found another available week for me that was not listed on the eBay platform.
For my second Hyatt purchase, I definitely looked around eBay and found a few timeshare brokers and decent weeks. I bid on a few but lost the bids. In case you may have missed it, here is a post on how to get a good approximate fair market value for timeshares.
I came across Discount Timeshares on eBay and reviewed their website which lists various weeks. This was the company that I used for my first attempted purchase that did not pass Hyatt's Right of First Refusal.
I constantly reviewed their inventory and attempted to make offers on a few other weeks. I was working with one agent at Discount Timeshares and attempted to make a low ball offer (ALWAYS MAKE A LOW BALL OFFER!). She indicated that she would NOT make an offer as it was too low despite being obligated to extend ALL offers for a property to the actual seller. After calling them out on this shady practice, I ceased doing business with this company and would NOT recommend them.
The other company that I used is Sumday Vacations. I ended up going through the entire purchase transaction with this Company and had a decent experience. Stay tuned for a full post on this as I owe everyone a full guide to purchasing a timeshare on the resale market. I was waiting for my purchase to go through completely so that I had a full guide and timeline of the process.
What arbitrage opportunities do you think exist?
While timeshares are complicated, there are a ton of arbitrage opportunities that currently exist and many more that will develop over time as these programs change. I touch on many of these in the various posts concerning timeshare strategies.
I will expand on some of these opportunities over time but the best resale arbitrage opportunity that occurred or may still be available is the purchase of re-priced Hyatt weeks. While exchange charts may be revised each year, it is unique for a timeshare company to re-allocate points to existing weeks which drastically increases their value and use.
I have owned Hyatt for 12 years and this is the first time that this has occurred that I am aware of.
Some very low value weeks (1300 or 1400 points) immediately changed to some of the highest point weeks (2000 or 2200 points).
With just dumb luck, my existing Hyatt week went from 1300 points to 2000.
Due to this change, I wanted to find similar opportunities and luckily succeeded in getting a second 2000 point Hyatt week for only $2,000 (all transfer and closing costs included).
What am I going to purchase next?
I do not anticipate purchasing another timeshare for a while as I should be able to travel well with a combined point balance of 4,000 Hyatt Residence Club points per year and by using my existing credit card strategy for additional frequent flyer points and hotel points.
If I use these points for exchanging solely through Interval International (likely strategy), I should get 4+ weeks in a 1 bedroom unit or about 3 weeks in a 2 bedroom unit. This should be sufficient for most years while supplementing our travel with excellent Interval Getaways (cash price for stay), RCI extra vacations (cash price for stay) or potentially using Accommodations Certificates ("free" weeks from Interval).
However, when the time comes, I will likely purchase a Marriott week. I do not think that I will purchase Marriott Destination Club Points since they can be pricey and resales can be difficult to find but will likely purchase a legacy week. The reason for this is so that I can exchange the Marriott week into Hyatt properties. This is a strategy that I touched on before but will go into further detail in other posts.
Essentially, there is a arbitrage opportunity where Marriott legacy week owners (and other non-Hyatt owners) are able to get favorable Hyatt properties for much less points / trading value than what Hyatt owners will have to use when trading through the internal system. More to come on this later.
A big thank you to Jonathan for posing these questions. I hope that my thought process and these answers are valuable to other readers to understand why I own what I do.
What are your questions? Ask below in the comment section.
Exchanging Marriott Points with Interval International: A Comparison between internal exchanges and external exchanges
In my previous post, I gave you an overview of a Marriott Vacation Club timeshare presentation that I attended at the Marriott Summit Watch.
The one piece of information that was completely overlooked was how Marriott Vacation Club points can be exchanged through Interval International.
Interval International is one of the two major exchange companies with RCI being the second.
Here is an overview of Interval International.
Interval International allows owners of affiliated resorts to exchange through their program into other weeks. They do have something called "short stay" exchanges that are less than a week but generally, are used for 1 week exchanges.
During the Marriott presentation, they did not discuss the ability to exchange into Interval International since they indicated that most owners prefer Marriott properties and prefer to exchange internally.
This is a tremendous oversight as exchanging through Interval International can give you an excellent way to maximize ownership.
As you may recall, Marriott offered me a 4,000 point package for over $40,000. Here is a chart showing the amount of points required to exchange through Interval International.
On the far left side is the demand for the particular week. Marriott uses "Peak", "High", "Medium" and "Low".
The importance of the chart above is basically to understand the minimal amount of points required to stay in the various size units. I find that most resorts and time periods that I want to travel and most people would want to travel is the top tier level - "Peak".
I generally ignore the other levels.
For example, for the 4,000 point Marriott Vacation Club package that was offered to me, I COULD NEVER exchange those points for a 2 bedroom unit during peak time through Interval International. This is extremely relevant to any purchase decision as this will significantly impair your travel options.
Many very nice properties ONLY have 2-bedroom units so you can NEVER travel to those properties during peak times.
Marriott Vacation Club
One reason that Marriott likely does not discuss the Interval International exchange options is that they require a lot of points to be able to exchange for one week. Even if the package they offered me was for 4,500 points, in exchange for over $40,000, I would be able to receive 1 week in a 2 bedroom unit through Interval International in addition to the exchange fee of $179 per week.
Comparison to Internal Trades
Each Marriott Vacation Club property has different point requirement for each week. If I purchased 4,000 points, I would be able to use those points for various resorts.
For example, here is the 2018 chart for Marriott Summit Watch.
As you can see, the point requirements vary significantly but if I used my points for Christmas week, it would cost me 3,175 points.
As you can see, if I owned 4,000 points, I could NEVER stay at the Marriott Summit Watch during Christmas for anything greater than a studio unit. A 1 bedroom would cost 4,450 points and a two bedroom would cost 6,725.
Comparison to using Interval International
Using the same comparison above, if I wanted to exchange my points through Interval International, I could reserve the same Christmas week at the Marriott Summit Watch for only 2,250 points - a savings of 29.1%.
Additionally, by exchanging through Interval International, I now have enough points to reserve 1 bedroom unit during peak times whereas I would not have enough points to reserve the same weeks through Marriott's internal exchanges. (3,000 points through Interval International as opposed to 4,450 through Marriott's internal program)
This example above is only one example of why exchanging through Interval International is an important aspect of any timeshare ownership. I can use almost 30% less points simply by exchanging through Interval International instead of reserving directly through Marriott Vacation Club's internal program.
*A caveat to this example is that inventory is different for the internal and exchange exchanges. If you can reserve something using their internal exchange, it does not mean that it will be available in the external exchange. Most of the time, Interval International makes sense from exchanging from one brand to another. For example, I routinely use my Hyatt week to exchange into Marriott properties. Interval International restricts my ability to reserve Hyatt properties through Interval International in order to avoid this type of arbitrage above.
I expect that this is one reason that Marriott does not want to discuss this portion of their program. I expect that the other reason that Marriott does not want to discuss this portion of their program is that through Interval International, you can exchange into other brands of timeshares and they likely want to keep you vacation dollars within the Marriott portfolio.
By exchanging through Interval International, you can exchange into many highly desirable Hyatt properties including great properties in Breckenridge, Beaver Creek and Lake Tahoe as well as other highly desirable ski properties as well as beach and urban properties as well.
The example above is just one of thousands of examples of why exchanging through Interval International can make a lot of sense. The exchange chart for Marriott Vacation Club points is not as appealing as other timeshare brand charts but in certain circumstances, exchanging your points may save you points that can be used for more vacations and is a great way to maximize ownership.
Overall, I think it is a shame that they do not discuss this option. It is one of the easiest ways to maximize timeshare ownership.
As I stated, I'm sure that the reason for this is to avoid owners from spending their vacation dollars at resorts out of the Marriott family, but external exchanging and the potential value that it can bring is an important consideration to review before any purchase.