Buying RCI Points Guide, including how to choose your timeshare wisely
The RCI Points Guide for users and prospective buyers
RCI Points, what’s it all about? RCI Points is best described as a currency for timeshare.
Simplicity. Rather than have all the variants of seasons, week numbers, unit sizes, resort facilities, grades and location, all coupled to how far in advance you decide to put your timeshare up for exchange with RCI, you just have a value in points, called RCI Points. These points have an annual management fee to keep the timeshare you own in good condition and there is a small cost to RCI to make a reservation, this varies to the duration, whether days or weeks, the price varies accordingly. More on management fees later in this article.
So the concept is you buy your vacation (the timeshare) and the cost thereafter for your vacations is the management fee cost every year and your RCI membership and reservations fee.
The name of the game being to increase the quality of you vacation accommodations whilst making the cost of the vacation cheaper than renting. A word of caution, it’s easy to get that bit wrong, by simply buying the wrong timeshare with a ridiculously high management fee, for the time of year of the week owned, but we will cover how to avoid that later in this article.
So how do you get this value of points? The most popular and cost effective way to own RCI Points is to own a week or weeks of timeshare at a resort and convert “cede” them to RCI Points. That basically means you give the right to use that timeshare week to RCI every year for as long as you want to remain in RCI Points. They can then offer your week to other owners and the same applies to you, in that you can book and go to anywhere within RCI that is available to book.
The specific timeshare you own, determines how many points it is worth. For instance an out of season studio in a standard resort can be worth just 9,000 points, whereas a 3 bedroom week in say Disney or Hilton in peak season can be 120,000 points. So the more it is worth as a timeshare in popularity and demand, the more points you get for it and these are issued every year into your account.
You get this value in points every year to spend on vacations as you want, up to the limit you own. So sticking with the example above you might have a studio week worth 9000 points and a 3 bedroom week worth 120,000 points, together your points ownership would be 129000 points. They aren’t separated in any way, they are one points holding. You could book 12 weeks at 10,000 point a vacation, or two weeks in a Gold Crown 2 bed at 60,000 points a week, any imaginable combination up to the total of your ownership total, in this example 129,000 points.
So lets recap. You buy a week or weeks of timeshare with their own values and cede them into RCI Points and the total is what you own in RCI Points. Of course YOU still own the properties, but they are RCI Points in your membership so long as you wish to remain in RCI Points (you can withdraw and stay with fixed weeks as a timeshare).
RCI Points Running Costs – Your Annual Management Fee
So far so good, but what about those running costs and how do you know how to choose a good timeshare to buy that works well in RCI Points as opposed to a nightmare? Well that’s easier than you think, but takes a little explaining. First you have to understand the management fee and the different valuations given to weeks by RCI, dependent on their “Resorts Of Proven Demand” Index
Firstly all timeshares have what is called a management fee, which is billed every year for each week owned. This is a charge for the running cost of the resort, shared amongst all the owners and covers staff costs, upkeep, taxes, tourism licenses renovation and refurbishment and of course the maintenance of the specific apartment that you own as well as all other costs a resort incurs. This ensure that what you own remains in tip top condition, so that anyone that uses it feels that it is as good as new.
The thing with management fees is that they are shared collectively with all owners at a resort, right across the year. Resorts charge a fee for each type or class of unit, so a studio one fee, a one bedroom another fee, a two bed another and similarly a unit with more bathrooms may have another higher fee and so on. So a two bedroom apartment suite may be CAD$700 a week and here is the bit you need to be clever on.
Whatever the cost of the management fee, it is level for all owners throughout the year. An owner with a low out of season week worth 15,000 points would have a management fee of CAD$700, but then again so would the owner of the peak week in that same apartment in summer with points value of 65,000. So a clever buyer goes for the peak weeks with the highest values as they in effect have the lowest running costs – that is the ratio of points to management fee cost. An even cleverer buyer will get top weeks in a resort that has low maintenance costs, and therefore a lower management fee every year.
Here is how to Buy RCI Points the right way
An example currently would be to choose a timeshare resale at a resort in the sun year round (no heating costs and no harsh weather costings) where the resort doesn’t have fancy and very expensive facilities (golf course, beach front for sand wear on the property etc) and that means you aren’t paying for a host of facilities you are never going to use yourself.
Get a collection of peak weeks together with a low management fee and you can have an RCI Points ownership with a half or even a third of the management costs of owning elsewhere and the Points are exactly the same, you just pay less to look after them. This means every vacation you book forever becomes a third of the cost to you, as that of other owners. Now that is buying RCI Points the right way!
To illustrate this see the difference between the right way and the wrong way:-
3 weeks in the 2 bedroom apartment with a value of 15,000 points and CAD$700 management fees each and your annual value and cost would be 45,000 points and a management fee of CAD$2100 – Painful and the wrong way to own!
1 week in the same 2 bedroom apartment with a value of 65,000 points and CAD$700 management fees and your annual value and cost would be 65,000 points and a management fee of CAD$700 – Excellent, that’s the right way to buy!
You can take that perfection to a whole new level if you are even more astute. There are a few good companies out there, but most aren’t so clever on the best weeks for YOU as opposed to what they want to sell, they obviously have to do something with those out of season weeks. But one that fulfills our criteria above is Eminent RCI Points Canada and you can see their RCI Points Prices and the ratio of management fees to points. They also have links to charts of values from RCI and more. Better because the Canadian or US Dollar is strong against the Euro or GBP, the rate of exchange works amazingly in your favor making the management fee very low indeed, with management fees of CAD$700 for 115,500 points, which means your vacations will be cheap indeed!
Sticking with the management fees. If you buy a resort with all the tricks and more at a top location you might have management fees up there in the CAD$1000 for a week worth only 70,000 points. That’s fine if you want to use it every year and will get the benefit, but not such a clever idea if you never intend to go there or just go there once. If you want to use a top resort you should be buying and owning timeshare to use onsite and stick with weeks as opposed to points.
Vacation Cost comparison. Good vs Bad RCI Points Ownership Purchase
So assume two owners at the same resort (from a points purchase point of view) make the same vacation choice to a 1 bedroom gold crown worth 45000 points. The owner with 45000 points and a management fee of CAD$2100 and the other owner with 65,000 points with a management fee of CAD$700. Firstly you can see who is paying the least for that vacation, but wait a minute, the clever owner in the peak week still has 20,000 points left over for another vacation! In reality his management fee cost for this vacation pro rata to his points used is only CAD$484. So one owner is booking EXACTLY the same vacation as the other but the cost to one is CAD$2100 and the cost to the other CAD$484, that is a stunning CAD$1616 difference.
If you think that sounds a big difference, try expanding that over the next 10 years of vacations, CAD$16,160 and that’s just because one owner was better at buying than the other. I hope you take my advice in my Buying RCI Points Guide and follow my guidelines and wish you happy vacations!
Future topics in this series include Buying RCI Points Guide, RCI Points Timeshare, Timeshare Points, RCI Timeshare Weeks Exchange, RCI Gold Crown, Interval International Exchange, Interval International Deposit First and Marriott Timeshare
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