Original Message:
resale vs developer purchase...I think we will stick to renting (by Laura C.):
well, yesterday hubby and I had a lengthy discussion about resale vs developer purchase. We talked to a resale broker, talked to Marriott salespeople, looked up info on TUG and various other forums, etc. After much debating, we decided to remain a renter.
Why? Well here is what we learned: At the location we are looking at, which is a Marriott on HHI, the property has a 95% annual occupancy. As a past hotelier, I can tell you that 95% is every hotel owner's dream. But, with it comes lots and lots of wear and tear. How to pay for it? Well, with maintenance fees, of course. Well, here is the rub. The property, while enjoying a 95% annual occupancy, has a 55% annual OWNER occupancy. Which means that 45% of those used units are not being covered by annual maintenance fees. How is Marriott covering those costs? Maintenance fees continue to rise, we all know that, but can they raise them enough to cover their maintenance needs? This concerns me. Not only are 45% of those annually occupied units not being covered by a maintenance fee, but the majority are during off season (peak season has a 95% occupancy, which means off season is actually LOWER than 55% occupancy). One might say that they can cover the maintenance fees by the cost they charge the average individual to occupy the unit, except that they can only charge so much. When you consider the fact you can rent a house on HHI during certain portions of the off season for less than $2000 a month, you can only charge so much for daily use.
I have also been reading and hearing certain things... not sure of the validity of those things, but have read them and heard them enough that I am starting to be concerned about the resale market as well. Marriott salespeople are giving vibes (some salespeople are outright saying as much) that Marriott is starting to make a distinction between internal vs external owners. The argument is that this "gossip" has been out there for years, but from a few of my discussions with various inhouse Marriott people, I get the feeling that the practice of distinguishing between the two may be there already.
For the record, I have no horse in this race. I am no longer in the hotel business, am not a resale broker, or anything of the sort.
Just thought I'd put that out there for those who may be where we are now in their decision process.