What are you gaining by owning?

I'm new to time sharing and my wife and I sat through our first presentation about a month ago. I've been looking around this board off and on since then. Ok, If you buy there will always be the annual MF. Are the MFs that much lower than what you can rent a week for to make a purchase worth it? Am I missing something?

The developer made it sound like a no brainier: Buy! He actually called it a 401V(btw, there is no such section in the code) and a way to lock in our future vacation costs.

Any thoughts/insights would be appreciated. Thanks!

Maint. fee + taxes and all depending a special assessment down the road if they don't keep a reserve funded to maintain.

If your not flexable.

I have kids and want a week at the beach. I found owning, resale, and the maintenance fee was less than renting and I like knowing 13 months out which week I have blocked out.

Now, I also like renting and when it fits I pull the trigger.

There are places you can rent for less than maintenance fees but not always.
Rents can change and so can MF's. The main reason I own is so I can get my
ocean front unit reserved up to a year in advance. I can carry my weeks over
at my resort and I can also purchase bonus time if needed.

We want direct ocean front in Hawaii for 2 weeks for the 4th of July every year - guaranteed. By owning we can get that for about $1,000 a week.

We own 7 weeks and actually rent the extra ones for enough to pay all maintenance fees. But I don't recommend that for someone starting out.

BTW - You can ignore most of what the sales person told you. They will say anything to make a sale.

Whether you can rent cheaper or not depends on when and where you want to go. It's often cheaper to own the the prime resorts than to rent them.

For instance: My Maui maintenance fee is about $2,200 a week - and the same unit rents for $3,600.

But if you want to go places during the off-season, and you don't care about getting the best view, and you are flexible, you can often rent for less than maintenance fees. Especially in places like Orlando, Las Vegas, and Branson.

My vacation times

I have the specific fixed ' shoulder season' weeks that I want (in two instances) for my personal vacations at the beach every year, another floating week that will let me visit family across the country for either Thanksgiving or Christmas every year, and a cheap MF week overseas that is actually a currency play that I intend to trade for weeks to give as gifts to/for family members or associates. I might be able to get rentals for close to as low as my MF's are, but I like the security of knowing that my preferred reservation times are effectively guaranteed.

I am thinking about picking up other weeks for other purposes, but haven't done so yet - still learning and planning.

toddvb20 said:

I'm new to time sharing and my wife and I sat through our first presentation about a month ago. I've been looking around this board off and on since then. Ok, If you buy there will always be the annual MF. Are the MFs that much lower than what you can rent a week for to make a purchase worth it? Am I missing something?

The developer made it sound like a no brainier: Buy! He actually called it a 401V(btw, there is no such section in the code) and a way to lock in our future vacation costs.

Any thoughts/insights would be appreciated. Thanks!

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It truly depends on where, when and what room size you need. In the off-season almost all locations can be rented at MF or slightly more, certainly for a 1BDRM.

2BDRMs during prime time at prime locations are much much tougher to rent at a good price so ownership makes more economical sense over the long term.

Answer where, when and what size and that info will help you determine if ownership is a better choice than renting.

You are correct to ask the question, and it depends largely on where you buy and where you want to go. It makes the most sense for an own to use purchase, as exchange fees add another layer of costs.

My summer OBX week gives me a vacation in prime time where I like to go for less than half the cost of renting, or gives me a nice rental income if I want to rent it to someone else. That offers real value.

Exchanging is becoming more of a crap shoot. When RCI started its massive program of renting exchange deposits to the general public, it flooded the market with cheap rentals, so for travel during many times of the year and at many places, it is a cheaper bet to rent. II has now also gotten into that game, although to a much lesser extent. There is still some value out there in exchanges, especially with some of the independent exchange companies, but it takes a lot more knowledge of the system to find it.

My UK summer weeks still offer good value for trading, but not through RCI anymore after they stood supply and demand on its head with their new ''points lite'' system.

For us it's the fact that there is such a difference between "let's take a vacation" and "let's take a vacation, it's already paid for."

The other thing is that we can take twice as many trips for the same cost if we use our timeshares or trade vs. renting or cruises.

I decide to buy resale fixed week units instead of a Snowbird Florida condo. Why?
Cheaper up front costs.
Closer to the beach.
No maintenance and if something is broke, there is not hassle.
Everyone is on vacation to have a fun WEEK.
Friendly people verses "my kid/grandkid/relatives only calls for money".
Activities - yes, some are stupid; but you meet others.
No cleaning; clean sheets and towels weekly.

I basicly travel between 3 resorts. All have heated pools and hot tubs. One resort is located where no car is needed; other 2 resorts a car is still not necessary. Yes, I so change units many weeks.

But all weeks are rentable above MFs. And while a full condo has a lower per week costs, I only pay for the desirable TS weeks verses 52 weeks a year. And as I have done this now for several years, I do run into prior year owners and guests regularly. And many of the resort staff also know me.

And just moments ago, I got invited to a singles' Thanksgiving dinner at a girlfriend's apartment in Boca.

And for the coming week, I will be in an Oceanfront unit on the 18th floor in Ft Lauderdale. Killer view.

Now all I got to do is to convince my heating contractor that the boiler has to be installed and working before Sat morning when my flight leaves.

The MF are cheaper for us then renting a hotel. I am new to timesharing and so far it has been wonderful. Each year there is a set vacation time to go and relax. You are wise to ask lots of questions and read the posts before jumping in.

toddvb20 said:

I'm new to time sharing and my wife and I sat through our first presentation about a month ago. I've been looking around this board off and on since then. Ok, If you buy there will always be the annual MF. Are the MFs that much lower than what you can rent a week for to make a purchase worth it? Am I missing something?

The developer made it sound like a no brainier: Buy! He actually called it a 401V(btw, there is no such section in the code) and a way to lock in our future vacation costs.

Any thoughts/insights would be appreciated. Thanks!

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Understand that like most things in life no one answer to your questions will apply in each and every situation - there are a few limited and specific exceptions to the general rules. But in most cases - and this applies in spades to new comers to the timeshare world - nothing is as straightforward and simple as the retail timeshare sellers want you to think.
Reserving or trading for a timeshare unit is NOT like making a hotel reservation. It requires careful planning and timing to obtain exact dates, units and resorts. The sellers invariably downplay or fail to mention the annual fees, which you appear to aware of, while acting like your hefty upfront cost has somehow paid for a lifetime of luxury stays. In fact that purchase cost has bought you nothing except the right to pay annual fees and any special assessments for the right to use set week or a quantity of points - and you'll likely never see 10 cents of that money back. It is lost, paid only to the developer not the resort Association - paying it for any resort is money lost. Your goal should always be to minimize that amount, usually through a resale / free sale, as paying more gets you nothing.
So why buy vs rent? In the past few years it has become all too clear that purchasing a timeshare, even resale, may not make sense. There are simply too many out there for sale and/or rent. Supply of both sales and rentals far exceed any demand. It has become so bad that with an extremely limited handful of exceptions - a few holidays, a couple weeks of seaside summer - you can practically pick your resort/time/view by renting far easier than an owner can or through trade. Plus the cost of renting is much less than owning outright and way below the cost of annual fees and the excessive costs of an exchange company plus fees.
The only reason to buy today is because you want to use the resort or points system and you don't care if that costs a few extra dollars. It is a mistake to think you'll rent your ownership for a profit or trade to better (or even equal) to wha you own cheaper than renting - again it takes years of trial and error (and in most cases purchases from a decade or more ago) to learn how to make a few dollars or even breakeven on timeshare ownership. The pro's here have in some cases managed to make a few bucks but even those are few and far between. Recognizing the rare, exact time/resort that can reliably rent for a profit and finding renters is much harder than you can imagine. It is NOT a viable plan that a quick purchase of resort X or Y for little or nothing (or a mistaken purchase at tens of thousands of retail dollars regardless of brand name or location) will make a novice an easy profit. In fact it will practically guarantee a terrible experience and yet another timeshare in the endless list of deeply discounted/free offers that we are buried in.
That doesn't even consider things like who controls the Association (NEVER buy a developer controlled resort/system), how reserves can impact the process, cheap rentals from "exchange" groups that undercut the annual fees and ruin any rental value for owners, and much more. And of course we have the overwhelming crush of resale offers in a non-existent marketplace that has depressed any resale value at virtually every resort to a giveaway at best - a cost to dispose of at worst.
Timesharing is great way to enjoy a large, usually upscale vacation experience in a resort setting. But it has to be done at resale if you buy to get a true value out or just rent. There are no signs that this situation will change anytime in the near future as despite a depressed economy and the flood of cheap/free existing timeshares developers continue to sell - at tens of thousands of dollars - basically worthless "new" ownerships that are nothing but a millstone the minute the rescind period ends. They continue to add to the large disillusioned group looking to free themselves from often growing annual fees and lost purchase costs. The new buyers are lured in with promises that are misrepresentations at best and outright lies in many cases - all subject to the official paperwork that manages to disavow anything except what appears in the massive verbiage few read before it is far to late to get out.
Why buy? Because like any real estate you might consider you want to use it all the time you can, you can afford it and you feel the annual costs make it a value to YOUR USE. And you can buy it inexpensively or take it for free. Except for that situation my strongest advice is NEVER buy a timeshare unless you know all the pitfalls but still feel you can beat the overwhelming negative odds of ownership satisfaction.

Although economics play a part in it, my primary reason to own is to lock in a location and a view (in some cases) with certainty. This is one reason I stick to Fixed Weeks.

George

bogey21 said:

Although economics play a part in it, my primary reason to own is to lock in a location and a view (in some cases) with certainty. This is one reason I stick to Fixed Weeks.

George

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And Time to restate the obvious

Luxury Vacation Condos At Motel 6 & Super 8 Rates.

Owning a timeshare can be advantageous if (a) the use fees ("maintenance fees") are reasonable & (b) if the acquisition cost is low.

Owning not only locks in the privilege of timeshare vacationing, it also binds the owner to the obligation of paying those use fees year after year, forevermore amen, so long as the owner remains the owner. Vacationing at your deeded timeshare is optional. Paying the obligatory use fees is mandatory. So it goes.

In recent years most of our timeshare vacations have been at other people's timeshare units via RCI Last Call & Instant Exchange. Even with exchange fees figured in, those cost us way less than the use fees at our own deeded timeshares. However, in order to snag Last Call & Instant Exchange reservations, we have to be RCI members. And in order to be RCI members, we have to own a timeshare. So by owning our own timeshare(s), we gain access to RCI's Last Call & Instant Exchange reservations to stay at other people's timeshares.

Is this a great country or what ?

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

bogey21 said:

Although economics play a part in it, my primary reason to own is to lock in a location and a view (in some cases) with certainty. This is one reason I stick to Fixed Weeks.

George

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A fixed week ownership can be great at a seasonal resort. It too can be a detriment in an area (Orlando is a great example but there are others) where the ability to pick the exact week of use you desire may vary year to year. In those cases a float ownership may be preferable but again it is are/resort specific not a general rule. You need to know what will better fit your potential use patterns rather than assume that a fixed or float week is "always" the better choice.

My preference would be to call my pilot to ready the jet and on a moments notice fly to one of my several vacations homes where the staff will have the the place ready for my arrival

Unfortunately my budget dosent allow for such a jetsetters lifestyle.

But with timeshares I can come close. I rent what I dont use, to cover the cost of my vacations, and since I cant rent what I dont own, I own

If I had it to do over I would probably have a RCI membership and use "last call" for under $300 a week vacations. Cheaper than renting and no longterm commitment. Im not sure that you even need to own a timeshare to be a member of RCI

We rented twice at the Point at Poipu and ending up buying there because we liked it so much and rentals were getting hard to find (in 2004). The rental on places with high demand could be much more than the maintenance fees.

timeos2 said:

The only reason to buy today is because you want to use the resort or points system and you don't care if that costs a few extra dollars.

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I think another reason maybe to buy resale today is with an eye to the future. Resales have not always been better than free. If one thought the economy might recover in the near future, resale prices could rally. You might get a free timeshare today and sell it for a few thousand in five or ten years. It's a gamble. What do you think the odds are?

We don't use timeshare for all of our vacation travel, because we enjoy visiting larger European cities where there aren't good options. For those trips, we usually rent a small apartment via a service in that city or other online option.

Timeshare works perfectly for us for the week we spend in the Caribbean for spring break. We own in a resort chain where we can swap our week internally to get what we want, and can lock it in 6 months out - important because of needing to book airfare far in advance. We know we want to go back to the same island, and like the resort and its services a lot. Although we had to pay a recent special assessment, the resort is now in great shape - and we got 2 free weeks of time that were a value to us.

We might be able to rent something cheaper on the island through other sources, but probably not much cheaper, and we'd have the time investment of trying to locate what we need when we need it. For the location and amenities, we think our fees are reasonable.

We generally avoid using RCI because the week we own is in a low season in a location with many timeshares, so our trading value isn't great.

bogey21 said:

Although economics play a part in it, my primary reason to own is to lock in a location and a view (in some cases) with certainty. This is one reason I stick to Fixed Weeks.

George

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George mentions one more, view, how important it may be to your family, that I would add to my where, when and what room size profile questions.

Answer those four questions and most experience tuggers can tell you if owning vs renting makes sense.

Cheryl20772 said:

... You might get a free timeshare today and sell it for a few thousand in five or ten years. It's a gamble. What do you think the odds are?

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Very poor.

Are you and your extended family doing as well or better over the last 10-15 years? Net wealth, employment opportunities, cost of living, retirement savings, health insurance costs, housing, utilities?

Cheryl20772 said:

I think another reason maybe to buy resale today is with an eye to the future. Resales have not always been better than free. If one thought the economy might recover in the near future, resale prices could rally. You might get a free timeshare today and sell it for a few thousand in five or ten years. It's a gamble. What do you think the odds are?

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Odds are completely against this. The trend for resale prices is steadily downward while the carrying costs are high and going up which easily consume even an optimistic $5000 profit. Not a realistic plan of action.

Thanks for all of the responses. Good stuff here and a lot to think about. Due to my job our travel time is from Sept. through mid November. Most of the time it would be just the two of us for one week in hopefully in Hawaii. I'm guessing a one bedroom would suit our needs just fine. Although some years we would probably travel with another couple.

Some fine folks at the Starwood section of this board suggested buying a good AZ 2 BR lockout trader with low MFs and then trade into Hawaii via II. That brings up another question. If we would own a 2 bedroom lockout but trade into a one bedroom for one week does that mean we have a one bedroom at our home resort(or one that we would trade into) for another week? Basically does a two bedroom allow us the possibility of having two weeks(if we only use one bedroom at a time)? Also what would happen to that "extra" week if we would only do a one bedroom, one week stay?

Thanks!

toddvb20 said:

If we would own a 2 bedroom lockout but trade into a one bedroom for one week does that mean we have a one bedroom at our home resort(or one that we would trade into) for another week? Basically does a two bedroom allow us the possibility of having two weeks(if we only use one bedroom at a time)? Also what would happen to that "extra" week if we would only do a one bedroom, one week stay?

Thanks!

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It all sepends on how you make your deposit:

1)If you own a two BR lockout and deposit both sides of your lockout with II as a 2BR and trade for a 1BR you do not get another week.

2)If you split the 2BR and only deposit side A which is a 1BR into II and keep the other side you can trade for a 1BR and go to your home resort and stay in side B.

3)If you split the two sides and deposit each 1BR A and B as separate deposits you can get two II trades.

If you own at a resort were the 2BR is essentially a 1BR and a studio when you split them you do not have two 1BR's to trade with. I believe most starwood 2BR have and A and B side with a large 1BR and a smaller 1BR so that gives you two 1BR's for trading purposes.