II Trading - Club Sunterra vs Worldmark

[SuzanneSLO Junior Member Find all posts View Profile Close SuzanneSLO]

Spence: Your point is well taken about cheap ways to buy into Club Sun. While you are probably one of the most knowledgeable out there with respect to Club Sun, you do make a good case that anyone willing to learn a little about the system could buy 20,000+ CS points for less than $7000. This would get you II trades at 6500 each for at least 3 2BRs a year. As you stated, your MF for those points would be about $1,423.50.

In contrast, for about $7000, you could only buy 10,000 WM points. This is enough for 1 2br if traded thru II. The MF would be about $524.

Based on this, I would say that CS is the better purchase for trades for those who have a long term interest in owning, since you immediately lose the value of joining CS if you want to resell to a stranger. In contrast, while the value of WM points at resale may be declining some, there is no immediate loss of significant value.

Also, CS is better for those who want more annual trades. Because of the need to buy into CS at a somewhat fixed price, it is more cost effective for larger transactions.

On the other hand, WM seem to have better raw trading power. As noted in another thread, CS may not be able to pull Four Seasons Aviara, but there are a number of reports of WM owners who have traded for that resort.

WM also has more flexibility, in that you can add additional points from time to time thru the rental market. Of course, there is a higher cost associated with this flexibility, with additional weeks probably costing around $700 plus II trade fees.

Personally, I am still sitting on the fence and own neither CS or WM. I am still earning towards WM only becuase I am not sure I can use one more timeshare week each year, much less 3.

Thanks for the insights -- Suzanne

[roadsister Member Find all posts View Profile Close roadsister]

"But CS lets you book partial weeks anytime while WM owners have to wait until 60days prior."

This is now a 90 day window for partial weeks in red season through Worldmark. White and Blue Worldmark seasons you have always been able to book less than a full week.

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

Cheapest Way to 20,000 Club Sun

"Spence: Your point is well taken about cheap ways to buy into Club Sun. While you are probably one of the most knowledgeable out there with respect to Club Sun, you do make a good case that anyone willing to learn a little about the system could buy 20,000+ CS points for less than $7000. This would get you II trades at 6500 each for at least 3 2BRs a year. As you stated, your MF for those points would be about $1,423.50."

Actually, I have learned from the master that it is possible to do better. I suggest the purchase of a Greenspring holiday 4BR (18,000 pts) at a "stress sale" for $3500 and a "conversion plus" purchase with Sunterra of 2000 pts for $3000. 20,000pts for $6500 and annual maint just over $1000.

[Spence Super Moderator Find all posts View Profile Close Spence]

"Spence: Your point is well taken about cheap ways to buy into Club Sun. While you are probably one of the most knowledgeable out there with respect to Club Sun, you do make a good case that anyone willing to learn a little about the system could buy 20,000+ CS points for less than $7000. This would get you II trades at 6500 each for at least 3 2BRs a year. As you stated, your MF for those points would be about $1,423.50."

Actually, I have learned from the master that it is possible to do better. I suggest the purchase of a Greenspring holiday 4BR (18,000 pts) at a "stress sale" for $3500 and a "conversion plus" purchase with Sunterra of 2000 pts for $3000. 20,000pts for $6500 and annual maint just over $1000.

That would be a very good price for Greensprings Holiday 4BR. Must be your karma, I just got one for that price or maybe a little less if I'm lucky. You just need to be patient, can be hard if you're under a 12month conversion window.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

I compared costs between the Sun and WM and found that, on an ongoing basis, Sun was cheaper to trade in II for studios and they were about the same cost for 1 and 2 BRs. This assumed a MF cost at Sun of $0.12 per point (8500 points for about $1000/year in MF for a Hawaii unit) and MF cost at WM of $0.07 (which appears to be about the going rate for rented points, but is actually higher than most pay for owned points).

Of course, this comparison excludes the initial buy-in cost and my impression is that Club Sun is significantly more expensive than WM. But if you already own Club Sun, then I think it may be possible to convert a non-Sun resort to Sun points on a cost efffective basis or if you own an existing Sun resort, you may be able to convert it to Club Sun on a cost effective basis.

Is there a way of "renting" Sun points to use in an II exchange? If not, then WM seems to have much more flexibility because you can do multiple searches without regard to your actual number of owned points by "renting" more points after your trade is confirmed.

-- Suzanne

Suzanne,

$.07/credit is the WRONG number to use for your WorldMark assumption for two reasons. First, the rental rate for credits is $.06 or less, not $.07. Second, when you rent credits, there is no cost of capital since the original owner bears those costs. So, the right number to use is $.04/credit if you are not accounting for cost of capital in your sunterra analysis. If you are including cost of capital, then I would use $.06/credit.

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

You guys are counting to the last cent to exchange into Marriott's.

I am happy trading numerous times into Marriott's, Sheraton and Royals, using my Sunterra corporate account, taking advantage of the 50% discount within the 59 days window, but I never count to the last cent.

[SuzanneSLO Junior Member Find all posts View Profile Close SuzanneSLO]

Suzanne,

$.07/credit is the WRONG number to use for your WorldMark assumption for two reasons. First, the rental rate for credits is $.06 or less, not $.07. Second, when you rent credits, there is no cost of capital since the original owner bears those costs. So, the right number to use is $.04/credit if you are not accounting for cost of capital in your sunterra analysis. If you are including cost of capital, then I would use $.06/credit.

I enjoy your posts and bow to your superior knowledge, but I am trying to understand your logic. I was pulling capital out of the equation becuase I am assuming you have say, $7000, that you intend to spend on either WM or CS. Admittedly the CS membership will depreciate as to the CS buy-in cost immediately, but this may not matter if you intend a long term hold.

If I buy 10,000 WM credits, I thought the current MF are $525. How could the WM credits under that contract be valued at less than $0.0525?

With regard to cost to rental credits, it appears to me that most brokers are selling in the $0.07 range. That, of course, means that private owners are selling for less, but if you have a trade thru II confirmed and no WM credits to deposit, you may have to buy thru a broker in order to get the credits you need today. So, this valuation is somewhat of a worst case scenario.

In any event, even if CS saves you a couple of hundred dollars per week traded, for many the reduced trading power of CS and less flexibility in number of trades per year may mean that WM is more of a "tiger" trader.

-- Suzanne

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

...may mean that WM is more of a "tiger" trader.

-- Suzanne

Suzanne, have you been hanging out with uncle Perry?

Hey are you from SLO town?

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

I enjoy your posts and bow to your superior knowledge, but I am trying to understand your logic. I was pulling capital out of the equation becuase I am assuming you have say, $7000, that you intend to spend on either WM or CS. Admittedly the CS membership will depreciate as to the CS buy-in cost immediately, but this may not matter if you intend a long term hold.

If I buy 10,000 WM credits, I thought the current MF are $525. How could the WM credits under that contract be valued at less than $0.0525?

With regard to cost to rental credits, it appears to me that most brokers are selling in the $0.07 range. That, of course, means that private owners are selling for less, but if you have a trade thru II confirmed and no WM credits to deposit, you may have to buy thru a broker in order to get the credits you need today. So, this valuation is somewhat of a worst case scenario.

In any event, even if CS saves you a couple of hundred dollars per week traded, for many the reduced trading power of CS and less flexibility in number of trades per year may mean that WM is more of a "tiger" trader.

-- Suzanne

Suzanne,

Here are a couple of points of clarification. Sorry for the confusion.

In order to perform an apples-to-apple comparison of WorldMark to Sunterra, you need to use the same methodology for both systems. My comments were intended to help you keep it consistent. And, I did make one erroneous assumption. I have not yet done this analysis, so what you are doing here will help me understand the relative cost to use Sunterra vs. WorldMark as well.

So, if you want to use an adjusted figure for Total equivalent cost, you either need to turn everything into an effective rental rate. Or, you need to use a Cost of Capital figure. If a Sunterra is lower than capital costs, then in the cost of capital model, the effective cost will be somewhat lower and vice-versa.

First, using the cost of capital method, I would add up all of the real costs that occur on an annual basis including maintenance fees, annual dues, housekeeping fees, etc and divide it by the number of points you get in either system. Then, I would take a cost of captial figure of between 6-8% and multiple it to the cost basis of your timeshare and add that to the total cost per point. For instance, if you had to purchase $10,000 worth of points including closing costs, then I would add $800 to the annual costs which is 8% cost of capital. When you do this, you will see that renting credits is far more cost effective.

Second, you should NEVER have to pay more than $.06/credit for WorldMark rental credits. They are readily available. If you are paying $.07, you are paying at least $.01/credit more than you should.

The cost I use for WorldMarks is $.04/credit. That is a bad assumption for an average user since I own a lot of credits. $.0525 is a better number to use since that is what it costs if you own 10000 credits.

I hope this clarifies it.

[SuzanneSLO Junior Member Find all posts View Profile Close SuzanneSLO]

I hope this clarifies it.

Thanks, that help a lot.

To Winger, yes, we are from SLOTown and yes, I find Perry's posts very interesting.

-- Suzanne