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Is it ever a good idea to buy Right to Use?

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Author	Topic: Is it ever a good idea to buy Right to Use?
Judy TUG Member Posts: 1958 From: Melbourne Beach, FL & Steamboat Springs CO. owner: Celebrity Resort World of Orlando; The Ridge Tahoe; Hatteras High; Worldmark. member:II,RCI,DAE,SFX Registered: Dec 2000	posted 05-23-2005 08:15 I'm considering purchasing a RTU contract with 32 weeks left. I'm 60 years old. We already own enough deeded for our sons to inherit. I like it because it allows flexible reservations with, I think, not too much competition because I actually want to use it during shoulder season. We could use more than one week a year. Also, it's much less expensive than the only fixed/deeded week at this resort I've been able to find that meets our requirements. In today's dollars 1/32 of the purchase price + yearly MF comes out to several hundred dollars less than a week's rental and I have reason to believe rental costs will increase. OK, MF will probably increase also. I didn't do a "lost opportunity" cost analysis because if I don't buy this contract, I'll just spend the money on rent, rather than investing it. What do you think? IP: Logged
BL Moderator TUG Volunteer Posts: 3197 From: B.C. Canada Registered: Dec 2000	posted 05-23-2005 08:27 Since I never look at a timeshare as an investment, and completely zone out when the accounting minds among us start with the whole cost analysis thing on timeshare owning, I'd say go for it, especially if it's something you want to use. I own a RTU houseboat timeshare - it's my favourite and I would never exchange it (had to rent this year, but that's another story). When I was able to get it at a good price, I didn't even think about the fact that eventually, it may be worth nothing. I'll be long gone by then. JMHO Bev IP: Logged
Karen G Moderator TUG Volunteer Posts: 3112 From: Bellevue, WA; own in Hawaii, Mexico, South Africa, Texas (RCI Pts.) Registered: Dec 2000	posted 05-23-2005 08:40 If it's a place you want to visit and the price is right, I'd say go for it. Just think of it as buying prepaid vacations for the next however many years you get to use it, and don't even think of it as a real estate investment (which it isn't anyway). We have deeded weeks, RTU, and points and they are all good. IP: Logged
Mel TUG Member Posts: 1723 From: N Smithfield, RI - owner: Orange Lake Country Club, Kissimmee FL; Tropical Breeze Resort, Panama City FL Registered: Dec 2000	posted 05-23-2005 08:50 Yes, this is a siuation where RTU makes sense. You are using it to prepay a series of vacations, with the understanding that you will not own anything at the end. In some cases, that's far better than a deed (some resorts are nearly impossible to give away, let along sell). The numbers work like this: Each week costa a portion of the buy-in, plus maintenance fees. This is currently less than the rental price - great! Each future year, your cost is the then-current maintenance fee plus the future value of the buy-in (thus you inflate the buy-in share a bit each year to account for lost interest). We should be able to safely assume rentals will rise in a similar pattern as the maintenance fees, and in adjusted cost, so it still makes sense. Each of us must make purchase decisions based on our own circumstances. RTU makes sense in certain situations, just like a developer purchase sometimes makes sense. Even DVC makes sense for a certain segment of the population - not for most of us, but for those who would otherwise pay to stay onsite. RTU may not make sense for most of us, but it sounds perfect for you. ------------------ Melinda Towne Come visit my homepage IP: Logged
capekong TUG Member Posts: 704 From: Southeast Missouri Registered: Mar 2004	posted 05-23-2005 10:16 We own several deeded and two RTU in the USA. One has a limited number of years on it and the other doesn't. The RTU will be a lot easier to transfer at death than the real property - deeded ones. I think there is a case for each option and ownership vehicle. IP: Logged
BocaBum99 TUG Member Posts: 1594 From: Registered: Jul 2004	posted 05-23-2005 14:29 At first, I was really dead set on getting deeded weeks. Now, I feel if there is a truly trustworthy managing entity, I am leaning strongly toward the RTU approach. Perpetual RTU that is. Two reasons for it. First, if the RTU gives you an undivided interest in a lot of units, like a WorldMark, you can eliminate exchange companies, simplify the transfer process, create a standardized maintenance fee structure and create a very liquid timeshare currency in a points system. Ownership in the whole systems gives you the ability to reserve partial weeks like a hotel. And, ownership in the whole system enables owners to rent their weeks thereby creating more value in the ownership. IP: Logged
Hatrack79 TUG Member Posts: 1918 From: Denver, CO Registered: Oct 2001	posted 05-23-2005 15:11 quote: Originally posted by BL: Since I never look at a timeshare as an investment, and completely zone out when the accounting minds among us start with the whole cost analysis thing on timeshare owning,.. Hey, I resemble that! (and I'm an engineer, not an accountant!) Hat IP: Logged
Hatrack79 TUG Member Posts: 1918 From: Denver, CO Registered: Oct 2001	posted 05-23-2005 15:16 Judy, I've calculated the equivelent price one should pay for an RTU w/ 32 weeks left verses perpetual deed, and it's only 5 or 10% less than the deed. (but I won't bore you w/ unwelcomed analysis ) Think of it this way, you have two choices: a) I sell you my perpetual deed for $X b) I sell you the same perpetual deed for $Y, but you have to promise to "give" it back to me after 32 years. X is worth a little more than Y, but there's nothing inherently 'wrong' about owning an RTU. Hat TUG Analyzer-Paralyzer, 2nd Class IP: Logged
BocaBum99 TUG Member Posts: 1594 From: Registered: Jul 2004	posted 05-23-2005 17:30 Hatrack, I am in your Analyzer-paralyzer's club which is only mitigated by my ready, fire, aim mentality coupled with uncontrollable shoot from the hip behavior. To tell you how sick I am, often times, I will create a discounted cash flow model with monthly compounded interest so that I can use my financial calculator to calculate equivalent returns. With terminal values done at 3, 5, 10, 15 and 30 years. And, a full tax analysis which is why I know about that mostly ignored 10% withholding tax rule that only Dave M could explain credibly. And, I forecast currency exchange rates variations, too. I do this so that I can do what if scenarios and compare various investment alternatives with each other across stocks, bonds, timeshares, real estate, cars, boats, artwork, etc. And, I'm not an engineer nor an accountant (even though I have engineering and math degrees). But, I did stay in 5 timeshares within the last 2 months. And, I bought Kemmons Wilson's book of OLCC and Holiday Inn fame, "Half luck and Half brains" That is what I call timeshare addiction. IP: Logged
travel girl TUG Member Posts: 18 From: Washington Registered: Mar 2004	posted 05-23-2005 17:44 Boys - It almost hurts my planning brain just to read your posts! I am a spreadsheet girl myself - every detail exactly planned in color coded columns, but NEVER the $$$$$. I make the plans - he figures out how to pay for them! ------------------ Jess IP: Logged
RonaldCol TUG Member Posts: 1150 From: Chicago, IL USA; owner at Bluegreen's Christmas Mountain Village; Shell Anaheim and Fairfield's Dolphin's Cove in Anaheim. Registered: May 2002	posted 05-23-2005 21:30 From a philosophical perspective none of us really own anything. We're here to use it for the experiential value. ------------------ "Stop me before I buy again!" IP: Logged
Hatrack79 TUG Member Posts: 1918 From: Denver, CO Registered: Oct 2001	posted 05-24-2005 13:59 I don't know, guys. Philisophycally speaking (Ronald)....if you don't use the "$" sign in excel, is it really a spreadsheet? Should we let Jess in our club? Boca, you're an inspiration to us all. My TS anaysis spreadsheet was up to 5MB (and 11 months on TUG!) before I actually bought one. But do you really "compare various investment alternatives with each other across stocks, bonds, timeshares, real estate, cars, boats, artwork, etc." Be careful; cars & boats depreciate, you know! http://www.tug1.net/tugbbs1/Forum3/HTML/013256.html IP: Logged
BocaBum99 TUG Member Posts: 1594 From: Registered: Jul 2004	posted 05-24-2005 14:13 quote: Originally posted by Hatrack79: I don't know, guys. Philisophycally speaking (Ronald)....if you don't use the "$" sign in excel, is it really a spreadsheet? Should we let Jess in our club? Boca, you're an inspiration to us all. My TS anaysis spreadsheet was up to 5MB (and 11 months on TUG!) before I actually bought one. But do you really "compare various investment alternatives with each other across stocks, bonds, timeshares, real estate, cars, boats, artwork, etc." Be careful; cars & boats depreciate, you know! http://www.tug1.net/tugbbs1/Forum3/HTML/013256.html Well, not really. I just said that for effect. But, I do treat a timeshare like an investment and compare it against alternative investment types and uses of cash. I can't believe you waited 11 months to buy your first timeshare. That is patience. You don't even want to know how many I bought in my first 11 months. I've got to be close to a record. IP: Logged
RonaldCol TUG Member Posts: 1150 From: Chicago, IL USA; owner at Bluegreen's Christmas Mountain Village; Shell Anaheim and Fairfield's Dolphin's Cove in Anaheim. Registered: May 2002	posted 05-28-2005 11:44 quote: Originally posted by BocaBum99: Well, not really. I just said that for effect. But, I do treat a timeshare like an investment and compare it against alternative investment types and uses of cash. I can't believe you waited 11 months to buy your first timeshare. That is patience. You don't even want to know how many I bought in my first 11 months. I've got to be close to a record. Well, we were on the flipside of the "patience" coin. We sat in on a presentation at a now defunct timeshare operation, and signed contract to buy one of their home resorts in Austria. It was a ski resort. We paid $15,000, and we don't even ski, or even have been to Europe for that matter. And we felt good about it. Why do we feel good about it at the time? We thought we would buy several more of these retail priced timeshares. After we got home a friend told us to rescind. He had sold timeshares once before and knew all the shenanigans that go on in the timeshare marketing. Yes, we canceled. Now we own 12 timeshares, all bought at RESALE pricing. This was during a three year frenzy of timeshare feedings! We are now so sophisticated that we even bought an RTU: the Royal Holiday Club. This puppy has got such a bad name amongst current retail priced buying owners that we just sensed there were huge opportunities for this vacation ownership. We really have to stop buying these. Having one for each month of the year to use, and more through leveraging, is really more than any one is entitled in one's lifetime. ------------------ "Stop me before I buy again!" IP: Logged
Dean TUG Member Posts: 2773 From: Disney's Old Key West, Marriott's Grande Ocean, Marriott's Harbour Pt. and La Cabana, Aruba Registered: Dec 2000	posted 05-29-2005 09:19 I think the deeded vs RTU thing is far more important to many than it should be. Get something you like and will use. Look at the overall package. Many times RTU are cheaper to buy, cheaper to transfer and cost less per year than a similar deeded unit. IMO, it's only one factor and not the most important one in most cases. I own 3 deeded weeks, 3 RTU weeks and 3 points contracts (RTU also). IMO, the points give me the most value, flexibility and benefit. ------------------ Dean My Home Page IP: Logged
dbmMayer TUG Member Posts: 2316 From: Northern CA Owner: Westin Ka'anapali & Sheraton Desert Oasis Registered: Jul 2003	posted 05-29-2005 10:56 One thing that I don't think anyone else has mentioned, is that if you want to buy in Mexico, your only option is RTU - a noncitizen cannot buy deeded property in Mexico. ------------------ Denise IP: Logged
LynnW TUG Member Posts: 808 From: Calgary AB Canada Registered: Jan 2002	posted 05-29-2005 14:53 We went to a presentation at Playa del Sol Grand in Puerto Vallarta and they say their ownership is deeded. I have also seen them on resale sights and they say deeded. How can this be? Lynn IP: Logged
california-bighorn TUG Member Posts: 555 From: Granite Bay, CA, USA Registered: Dec 2001	posted 05-29-2005 16:29 Lindo Mar in PV is also deeded. They claimed to be the only TS in Mexico with that distinction. I never could understand how that could be since I thought you had to be a Mexican citizen to own within a certain # of miles from the border or the ocean. Does a Mexican Bank "hold" the title for you? Marty [This message has been edited by california-bighorn (edited 05-29-2005).] IP: Logged
Judy900 Non Member Posts: 21 From: Marriott Ocean Pointe Registered: Jan 2005	posted 05-29-2005 16:54 I was told that to hold ownership within a numbers of miles of Mexico's beach front property...non-mexican citizens have to purchase a piece of a Real Estate Investment Trust (Reit) IP: Logged
iconnections TUG Member Posts: 531 From: sunny Southern California! - Laguna Surf, CA - MDSV-I, Palm Desert, CA - Maui Sunset, Maui, HI - Buganvilias, PV, Mexico - Grand Velas, NV, Mexico Registered: Sep 2003	posted 05-29-2005 17:24 Paradise Village has some deeded timeshares too. The resort is on the beach in Nuevo Vallarta and it is a very nice beach. I don't know if they still sell deeded timeshares today. ------------------ Emmy A picture is worth a thousand words. http://www.picturetrail.com/iconnections/ IP: Logged
Heron TUG Member Posts: 1551 From: Ont, Canada Registered: Mar 2003	posted 05-30-2005 04:38 Never assume what is printed on a resale sight is correct - I see so many errors with respect to deeded vs. RTU to make your head spin. Unfortunately, some people just don't have a clue what they own. quote: Originally posted by LynnW: I have also seen them on resale sights and they say deeded. How can this be? Lynn IP: Logged
capekong TUG Member Posts: 704 From: Southeast Missouri Registered: Mar 2004	posted 05-30-2005 04:44 You are so right, I have purchased several timeshares and one has to work to find the correct answers sometime reguardless of which way you are buying - ebay, resale, broker, etc. IP: Logged
LynnW TUG Member Posts: 808 From: Calgary AB Canada Registered: Jan 2002	posted 05-31-2005 11:03 I do know that somehow Playa del Sol and Lindo Mar are related. Owners are allowed to book at either resort. Lynn IP: Logged
Dean TUG Member Posts: 2773 From: Disney's Old Key West, Marriott's Grande Ocean, Marriott's Harbour Pt. and La Cabana, Aruba Registered: Dec 2000	posted 05-31-2005 18:41 quote: Originally posted by iconnections: Paradise Village has some deeded timeshares too. The resort is on the beach in Nuevo Vallarta and it is a very nice beach. I don't know if they still sell deeded timeshares today. PV has deeded condo's but I'm not aware of deeded timeshares. While some expire sooner, most expire 2033. ------------------ Dean My Home Page IP: Logged

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