Timeshares Vacation Interest Vs Management Fee’s Vs Cost

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Yes, this is the timeshare guru here. Making conversation and points today on management companies in the timeshare and land development industry. The upcoming statements would be based on two things. First, thirty plus years of experience as a senior level executive in the industry. Second, by what we have found as the normal situation in the industry across the board.

After implementing the most successful marketing and sales programs in the timeshare industry, we can say that timeshare’s and management companies today could be compared to fire and water. The timeshare project being the fire, the management company being the water. Looks good on paper, but what the Home Owners Association or Property Owners Association did not see is the fire contain flammable liquids that water would not put out. Or the other hand the management company seen the opportunity for what most would say is “easy money”.

Why is it easy money? Home Owners Associations and Property Owners Associations are burdened with unsold inventory, defaults, and delinquent accounts just to name a few issues of concern. All these concerns are the deciding factor of the “cost” to maintain the ownership base. Rising maintenance fee’s, special assessments, and the list goes on and on. The real question is, do these resort management companies have a solution to all these issues? In reality the answer is “NO”. Yes, they come to the table and promise this program and that program, but do they work? Back to reality, does a bandage on a severed artery permanently stop the bleeding? Through serious and prolonged research I have found that most management companies today add to the discomfort of the ownership base as a whole due to their in abilities to conduct a business as usual environment for the project itself. Timeshare projects run by a Home Owners Associations or Property Owners Association that under management companies without a successful and knowledgeable trained sales and marketing staff really don’t have a chance for survival. This would is equivalent to a patient that has a disability of terminal cancer. It’s just a matter of time. Maintenance fee’s will continue to rise, (management companies will get their cut regardless) special assessments will continue to climb, there is no end to this dilemma. That very special timeshare that each person loved and enjoyed, now has become a financial burden.

Cost vs Reality! Every Home Owners Association and Property Owners association today is being hammered by what is called “Deed Back” companies. These predators pray on resorts that have been buried by fee’s, that management companies seem to create. They invite timeshare owners to meetings and make them pay to get out of their timeshare. What is a deed back company? It is a fictitious company formed somewhere legally that is pre- planned to go bankrupt or just be dissolved. What happens to a resort then is a serious downfall in cash shortages. The resort accumulates large amounts of excess unsold inventory, it’s a snow ball effect. But in reality, it doesn’t affect the management companies, they will just receive less in management fees if they don’t take drastic measure to maintain an influx of revenue. Currently the majority of management companies have no solutions to the problems other than to continue to raise fee’s to the existing owners. These situations have a serious financial effect on the resort and all of its owners. All these issues can be avoided.

When hiring a property management company today, serious questions must be asked. To maintain a strong and healthy resort environment, all property management companies “MUST” have an experienced sales and marketing staff on-board in today’s interval ownership environment. Most property management companies do not have a clue to what it takes to maintain a solid resort financial system. Many will “wing it” just to survive. They rely on their “rental” program to make up the difference. Great in a dream, not going to happen in the real world unless we are giving these rentals away. Ask any management company if they were able to rental all the units at any project in the month of April in Garden City or Park City, Utah. Avoiding the downfall and expense your Home Owners Association or Property Owners Association will create by not knowing how to choose or hire the right firm could very well be the difference between success and demise. The owners pay the price for bad decisions made by Home Owners Association and Property Owners Association boards. Sales is sales, but experienced sales in the right industry is the proper compound for the fire containing flammable liquids.

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