One of our most frequently asked questions from customers concerns what determines the resale value of their timeshare. As you may already know, resale market values for timeshare properties are much lower than the price paid to the developer by the original purchaser. Often, the value can be 40 to 80% less, and not infrequently, some properties have no resale value at all.
This article unravels the significant reasons and drivers for the resale value of properties on the secondary market. These reasons are rooted in the specific details of the ownership as well as in current market trends.
The Main Factors That Determine Resale Value
Below is a list of the main factors that determine the resale value of timeshare properties, grouped into three different categories as follows:
Specific privileges for the resale property that allow additional options besides home resort usage, such as internal and external exchanges or day use.
Market trends determined by various factors, such as the existence and active exercise of the right of first refusal or local events that may impact desirability.
Next, we will detail how each factor positively or negatively affects the market value of timeshare resale properties.
The specific details of your ownership that contribute to your ownerships resale value include:
Brand
Each timeshare developer offers various timeshare ownerships. The brand of your timeshare’s developer can play a large role in the size of the market for your timeshare.
Certain brands carry a higher value on the resale market due to their excellent reputation for quality customer service, and a good record of keeping stable budgets and maintenance of the properties. Such properties tend to be stable in value, with owners satisfied with their ownership over time.
Location
If your timeshare is a fixed, or floating week, that is deeded to a specific resort, the location and amenities of your resort are an important factor in determining desirability and, therefore, resale values.
For example, properties with ski-in / ski-out locations will be highly desirable for winter weeks. For beach properties, properties on the beach or within walking distance of the beach will be highly desirable. Conversely, properties in locations that offer a large amount of inventory, such as Orlando or Las Vegas, would carry lower resale value due to the large number of competing properties that provide accommodations in those areas.
Season
If you own a floating week, or select points-based ownerships, that is deeded to a particular range of weeks out of the calendar year, the season it is deeded to can dramatically impact the value of your ownership.
It is not uncommon for a timeshare property to be worth tens of thousands of dollars in high season, while at the same resort, the least desirable season will have no resale value. This extreme variation in value is driven by the time of the year the property can be used. For example, a peak ski week in a ski-in/ski-out location can be valued at $30,000 or more during winter, whereas the same resort and unit size will have no resale value in the spring / fall seasons.
Unit Size
The number of bedrooms and bedding configuration of your deeded unit size not only determines the maximum number of people that can occupy the room, but is also a factor in your timeshare’s value.
Unit sizes can vary from studios to generally up to four bedrooms, and larger units are generally more desirable, as a rule of thumb.
Often, larger units, such as two, three, and four bedrooms, can be locked off and booked for multiple stays, allowing owners to take additional vacations, and enhancing the value of the ownership. Owners may also rent or deposit to exchange part of their larger villa while using the remaining side.
View
Some resorts offer specific view types, such as Ocean Front or Ocean View, which are assigned to the unit, and can be highly desirable on the resale market. Particularly in beach locations like Hawaii, a premium is given to Ocean Front units, followed by Ocean View units.
The view can also be critical in ski locations with highly desirable mountain views. Views such as garden, city, island, and courtyard view will be less desirable and reduce a property’s potential timeshare resale value.
Usage Rights
Your usage rights will determine how often you can use your timeshare, or how often you are awarded with new points. Biennial usages rights mean the ownership can be used every other year, usually on an even or odd year schedule.
Annual use timeshares will have more value than triennial, odd, or even years use timeshares. Often, owners prefer to buy an annual usage timeshare, which allows them to only pay one transfer fee during the resale process, reducing the total and closing costs. If they purchased an odd and uneven year, the closing and transfer fees may be higher; therefore, annual ownership may be preferred.
The next available use for the buyer is a of critical value as well. A property with a desirable high season prebooked week for the buyer will carry much higher resale value. For example, if you are selling a floating season winter ski week, it is ideal to book a prime ski week in advance for the buyer’s first year of use.
Maintenance Fees
Any timeshare buyer on the resale market will be comparing the annual maintenance fees to the vacation time they receive. Ownerships that offer low maintenance fees, without sacrificing vacation time or resort amenities, can be very desirable to buyers.
When maintenance fees are affordable and constitute a good value compared to the value of the reservation on the rental market for that specific area and season, the resale value will be higher.
Even when transferred on the resale market, specific timeshare properties will feature essential privileges that make them desirable. Let’s review a few of the popular privileges that buyers look for when shopping on the resale market.
Internal Exchanges
For example, within the Vistana Signature Network, properties considered mandatory will allow owners, upon resale transfer, to perform internal exchanges using the StarOptions point system for other properties in the Vistana Signature Network (VSN). This is desirable because it will provide owners additional flexibility to book reservations at other resorts in their network, without having to own at that particular resort.
External Exchanges
Other properties may be desirable due to their affiliation with external exchange companies such as Interval International or Resorts Condominium International (RCI). Both exchange companies allow owners to trade with thousands of additional properties, greatly increasing the number of resorts and locations they can access.
Resorts with a low maintenance fee per RCI point often carry higher resale value. For example, the Grandview Resort in Las Vegas has an excellent point allocation for high-season weeks that belong to RCI, whereas weeks at the same resort that do not belong to RCI will have much lower resale values.
Hotel Affiliations
Some timeshare brands allow owners to convert their timeshare usage into stays at hotels. With Hilton Grand Vacations, owners can convert their ClubPoints into Hilton Honors points, which can be used at a vast network of Hilton hotels across the globe.
Resort Day Use
Day use is another important example of a privilege that can enhance the resale value of a property. Owners who live within driving proximity of the property may be interested in using the facility outside of their home resort’s allocated time, by visiting for the day and enjoying all the amenities.
Multiple market trends, some temporary or cyclical, will affect the value of a resale property. Let’s explore some of the market forces that can play a factor in resale values.
Right of First Refusal
A timeshare developer’s right of first refusal is one of the most important factors when looking at market trends. For properties that are subject to right of first refusal, once a seller has signed a purchase agreement contract, part of the transfer process is to send the agreement to the developer for review and approval.
The developer then has the right to exercise their right of first refusal, and thus buy the timeshare back from the owner. The developer can also choose to waive their right of first refusal, and allow the transfer to complete to the buyer on the resale market.
When the developer is actively buying many properties, prices can increase due to lower supply. In addition, if the developer exercises and buys back all properties below a certain price point, it can effectively set a minimum price for the resale market, which can cause the value of that property to increase.
Therefore, a buyer will need to raise their offer to a price point where the developer is no longer exercising their right of first refusal. It is not uncommon for developers who have the right of first refusal to exercise actively during specific periods when they need inventory and not exercise during other times. This can create volatility in market pricing.
Seasonality of the Resale Market
As with many industries, there is a cyclical pattern to the number of buyers and sellers on the resale market. One example would be that many developers send their maintenance fee bills near the end of the calendar year. This causes many timeshare owners to list their ownership for sale in hopes of selling it before their next maintenance fee is due. This large influx of sellers can create greater competition, and higher supply, on the resale market.
Local Events
Other market trends can be local and driven by specific events. Timeshares located in areas where natural disasters or calamities are more likely to happen, such as heavy flooding, hurricanes, winds, and fires, may be more prone to damage and special assessments that are costly to the owner. It is typical for rental and resale values to decline when such local calamities occur. Such events can lead to special assessments for repairs or make the area less desirable for travel.
Free Market Analysis, No Obligation to Sell
For all these reasons, it is essential to consider carefully the factors that affect the timeshare property value at a given time when choosing a listing price. Our licensed brokers have extensive experience and can help by offering you a free timeshare value assessment that considers all these aspects. Our assessment is based on carefully considering all the factors stated above and comparing asking and selling property prices.
Why Choose Premier Timeshare Resale?
Premier Timeshare Resale has over 20 years of marketing and sales experience! Our Licensed Real Estate Brokers are here to help you sell and we will ensure that the listing price of your ownership is the best the resale market has to offer.
Premier Timeshare Resale has a broad base of buyers and expertise with many vacation property brands, such as Marriott, Vistana, Westin, Hyatt, Hilton, Breckenridge Grand Vacations, Disney and many others.
