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Timeshare Vacation Interest Vs. Management Fee Vs. Cost

Yes, this is the timeshare guru here. Making conversation and points today about the management companies in the timeshare and land development industry. The next statements would be based on two things. First, more than thirty years of experience as a high-level executive in the industry. Second, because of what we have found to be the normal situation in the industry across the board.

After implementing the most successful sales and marketing programs in the timeshare industry, we can safely say that today’s timeshare and management companies could be compared to fire and water. The timeshare project is the fire, the management company is the water. It looks good on paper, but what the Home Owners Association or Property Owners Association did not see is that the fire contains flammable liquids that water would not put out. Or, on the other hand, the management company saw an 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, delinquent payments, and delinquent accounts, just to name a few issues of concern. All of these concerns are the deciding factor of the “cost” to maintain the ownership base. Rising maintenance fees, special reviews and the list goes on and on. The real question is, do these resort management companies have a solution for all these problems? Actually the answer is “NO”. Yes, they come to the table and promise this program and that program, but do they work? Coming back to reality, does a bandage on a severe artery permanently stop the bleeding? Through serious and lengthy research, I discovered that most management companies today add to the discomfort of the ownership base as a whole due to their inability to carry out a business-as-usual environment for the project at hand. Yes. Timeshare projects run by homeowners associations or property owner associations that, under corporate management without a trained, successful and knowledgeable sales and marketing staff, really have no chance of survival. This would be equivalent to a patient who has a terminal cancer disability. It’s just a matter of time. Maintenance fees will continue to rise (management companies will get their share regardless), special assessments will continue to rise, there is no end to this dilemma. That special timeshare that each person loved and enjoyed has now become a financial burden.

Cost vs Reality! All homeowners associations and property owners today are being hit by what are called “Deed Back” companies. These predators pray at the resorts that have been buried by the fees that the management companies seem to create. They invite timeshare owners to meetings and make them pay to get out of their timeshare. What is a new writing company? It is a fictitious company legally formed somewhere that is planned in advance to go bankrupt or simply dissolve. What happens to a resort then is a serious drop in cash shortages. The resort accumulates large amounts of unsold excess inventory, it is a snowball effect. But in reality, it doesn’t affect the management companies, they will simply receive less in management fees if they don’t take drastic measures to keep an income flowing. Currently, most management companies have no other solution to the problems than to keep raising rates for existing owners. These situations have a serious financial effect on the resort and all its owners. All of these problems can be avoided.

When hiring a property management company today, serious questions should 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 have no idea what it takes to maintain a sound financial system. Many will “wing it” just to survive. They rely on their “rental” program to make up the difference. Great in a dream, it’s not going to happen in the real world unless we’re giving these rentals away. Ask any management company if they were able to rent all the units in any project in the month of April in Garden City or Park City, Utah. Avoiding the ruin and expense that your Home Owners Association or Property Owners Association will incur by not knowing how to choose or hire the right company could very well be the difference between success and demise. Homeowners pay the price for poor decisions made by the Home Owners Association and Property Owners Association boards. Sales is sales, but sales experienced in the right industry is the right compound for fire containing flammable liquids.

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