Bad Debt Expense

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

Budgeted bad debt expense at one of our resorts:

2004: $64575
2005: $114988
2006: $77448
2007: $70585
2009: $66000
2010: $114000
2011: $114000

For 2011, 14% of the expense budget.

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

It would be really interesting to see a breakdown of how much can be attributed to interval abandonment from postcard companies...

[Dori Senior Member Find all posts View Profile Close Dori]

We are experiencing the same at our home resort. Things are not looking good. MF's jumped almost 35% to try to keep it afloat. There is talk about selling the resort if they don't collect enough. Anyone every been involved in the sale of their resort?

Dori

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

We have received previous dire warnings, but our fees have stayed the same as last year.

Ours is an unusual situation in that there is an Interval Association and a Homeowners Association (full-ownership) that are at odds. One couple has bought out a lot of the full-ownership and tried to make a business out of rentals. I guess it has nor worked out and they are not able to meet their fee obligation.

Unfortunately, they are the Homeowners Association.

The major expense of the Interval Association is fees paid to the Homeowners Association.

The bad debt expense I've posted is just that of the Interval Association.

Now that I think about it, both of our resorts (all 6 weeks we own) are "timeshare" associations within and paying fees to a HOA.

[dougp26364 Senior Member Find all posts View Profile Close dougp26364]

I posted these numbers from one of resorts sometime back.

Allowance for Bad Debt:
(2010) $173,169
(2011) $746,300


This was the largest jump among the resorts we own but, all of them are up there pretty good. The thing is, I worry less about a resort that plans well for bad debt expense and more for a resort that is tries to make it look not as bad as it could be. After all, so long as the HOA is honest, if it's not as bad as what they fear, then there'll be a surplus in the budget for next year.