# Do the economics of timeshares pan out?



## Swedegeek (Feb 1, 2010)

I realize I'm probably going to get a lot of strong opinions on this one, but here goes...

I'm wondering whether the economics of timeshares pan out - is it a good economic investment over time?

I'm an economist & an engineer, so I've got no problem figuring out what a Worldmark timeshare would cost me.  I'd probably use it for trips to Hawaii at least every other year, some ski trips, and the occasional long weekend or partial week around the Pacific Northwest.

To give meaning to the cost figure for owning a timeshare, though, you've got to have an estimate of the "non-timeshare" cost of comparable accomodations.  And that's my question.  I don't know what respectable hotels cost in "normal" economic times.  The last 5-10 years have been higher than average, and the last year or so has been lower than average.

In the past I've tended to camp out or stay in more "modest" accomodations, i.e. dive hotels or hostels.  Now I'm getting to the point in life where sleeping on the ground isn't so appealing, and a hot shower once in a while sounds good.  In other words, to my great regret I'm becoming part of the establishment.  

So have TUG folks found that the economics have worked out cheaper than if they'd paid for traditional hotels?  Does anyone have a sense for what comparable accomodations in Hawaii would cost in "normal" times?  If the cost is comparable, the timeshares don't offer much benefit.

Can anyone offer any perspective?

Thanks


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## scrapngen (Feb 1, 2010)

Being a TS newbie myself, I can only tell you why we finally opted for a TS. It is not an investment - it just gives you a certain kind of vacation... more room, kitchen, nice location, etc.

While we, too, like to camp and tend to look for deals as the location is more important to us than the accommodations, it finally got to the point where any traveling outside of summer is tied to the kids' school vacations. The only time they get multiple weeks is the holidays. AND we love going to Hawaii in the winter for more than one week (Used to be we could travel in November, early Dec, or spring and we took the kids out of school for a couple weeks)

We have always managed to get killer deals on lodging using various means such as Craig's list, B & B's, and last minute specials but it takes work to get Christmas accomm. for $100-150 a night. (Yes, we've managed some awesome 2 bedroom condos in our favorite Poipu area for steals) However, it gets old forever hunting and also occasionally having to cobble together multiple locations for our trips. You also don't know what you are going to get - sometimes great, sometimes run down, bugs, etc. 

Having a guaranteed location at the best beach on Kauai, guaranteed time of year when we see traveling there yearly for at least 6-8 years with 5 star accommodations was pretty attractive. However, we didn't look at it as a money investment - rather as a fee to get exactly what we want when we want it, with the possibility of trading to other Marriotts in interesting locations as it should be a power trader. (We'd be the ones trading equal or down - but ok if it means Phuket, or St. John's, Aruba, etc) So for us it was an upgrade to our current travel and a chance to be right on the beach we already spend most of our time at anyway...We'll still do other traveling more along the last-minute-deals line, with location always trumping all else for us. Summer camping, roughing it for fishing or bear watching in AK, staying in a cheap room at a National Park so that I'm in the National Park, etc..

I suspect you are looking at a cheap resale more local to the WA. area so in some ways this doesn't really mirror your plans, but you are asking "Why TS and if it makes sense."  If I wanted to go to multiple locations and was looking at TS as an investment and I'm used to minimalist accommodations then I'm not sure TS is the way to go. Trading is not guaranteed and takes a certain amount of work to get what you want. You cannot compare TS to hotel rooms as they are usually bigger and have some kind of kitchen. 

Ultimately, I think many people buy as they feel they get more space and kitchen, a nicer place, and a guaranteed vacation one (or more) weeks a year. Plus possible trading, but that's not a given, just a nice possible extra (you won't always get what/where you are looking for)

Tuggers have great advice about purchasing your first TS. I'd read everything I could and check out the different forums to determine what would work for you and IF it would work for you.

Good luck!!


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## Passepartout (Feb 1, 2010)

Welcome to TUG! 
I doubt you will find very many here who would go back from TS ownership to sleeping on the ground. That said, as a financial investment, TS is not one. You will find in subsequent replies and through your searches, over and over, that TS vacations just don't compare to hotel vacations. Having a TS is like having a luxury apartment in an exotic location instead of the hotel-like shared lodging. To be able to have a kitchen where you can (minimally) have a cuppa joe before you hit the beach to (maximally) prepare a full Thanksgiving meal for family and friends in a mountain resort. We've done both.

As to cost, just do a search for the size apartment you might be interested in using at a location you'd like to see on a site like www.vrbo.com will give you a sort-of apples-to-apples cost comparison.

I applaud your thought that Worldmark would fit your needs as to living/traveling in the NW.  Of course, buy resale. There's an active forum here in TUG. The marketplace can help you also. 

TS ownership does require a plan-ahead mind set. Last minute getaways are not always available for where you want to go, but with some flexibility, you can see some fun, interesting places.

Best wishes, and again, welcome!

Jim Ricks


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## AwayWeGo (Feb 1, 2010)

*Luxury Timeshare Accommodations At Motel 6 & Super 8 Rates.*




Swedegeek said:


> Can anyone offer any perspective?


Click here for our (mostly) complete timeshare story. 

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


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## Lee B (Feb 1, 2010)

Think about comparing condo rental vs. timeshare ownership, as it will more likely be apples and apples.  Look into vrbo.com for condo rentals.  Most timeshare fans like the luxury of a real apartment vs. a room with two beds and a TV.  I'm one of those, plus I like staying at least a week somewhere so that I can relax instead of trying to cram in every attraction in four days.  We also like the option of fixing our own meals at least part of the time.

An always controversial aspect of TSing is the renting out of deposited weeks by the largest exchange company, RCI.  When a conglomerate bought RCI from its co-founder, they wanted to stop renting surplus deposits to members for cents on the dollar, and tried various outlets for renting them for more.  They still do that.  Look around TUG for some of those outlets.  Those surplus intervals tend not to be in popular months, of course, but you will get a sense of availability and pricing.

Multiple-resort-ownership, as exemplified by WorldMark is a very good option.  Another WA-based club is Vacation Internationale.  Both own in HI.  Use them for diverse locations without having to pay high exchange fees.


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## BocaBum99 (Feb 1, 2010)

Swedegeek said:


> I realize I'm probably going to get a lot of strong opinions on this one, but here goes...
> 
> I'm wondering whether the economics of timeshares pan out - is it a good economic investment over time?
> 
> ...



Yes.  Your economic analysis will prove that when done right, there is no better option available for family vacations.

A WorldMark ownership at $.50/credit for a 6000 credit account is an absolute steal when you rent additional credits to meet your vacation needs.  You can stay in WorldMark resorts for cheap and  you can trade up to your hearts delight.

The dark matter of timeshare is what makes it so attractive.  The dark matter are the loopholes that make timesharing fun.  I'll leave it at that for now.  This will give you 6-12 months to do a treasure hunt.

Yes, there is gold in them thar hills.


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## Elan (Feb 1, 2010)

I would like to add that any economic model needs to include your usage patterns.  In other words, if you're content being in the same unit for a week at a time, then that's a different model than say hopping down the Oregon Coast where one might want to stay a day here and two or three days there.  Also, the model changes dramatically if there are more travelling than would ordinarily fit into a single hotel room.  

  In general, even though I purchased wisely, and have pretty respectable maintenance fees, I would likely not not own any timeshares if I didn't have a family.  It just isn't cost effective and/or is too restrictive for the way I'd prefer to travel as an individual or couple.   There aren't timeshares in all of the places that I'd like to go.  For the occasions where I would prefer to be in a larger unit for an extended period, I'd just rent.  Yes, I'd probably pay more for those vacations, but I'd more than make up for it with savings on my other trips.  

  I would agree that given your location, should you opt to jump in to TS'ing, WM is a good choice, primarily because MF's are reasonable, short stays are possible, and you can exchange within the system without having to deal with the large exchange co's.  Buy a minimal credit account, and rent credits from others when needed.


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## yumdrey (Feb 1, 2010)

For me, timesharing makes more sense than staying at hotels.
I have 3 kids (two teenagers and one younger one), and when we travel, we had to reserve 2 rooms at hotel most of the time because max. occupancy is 4 for a hotel room. Most of the time, we travel during school breaks and getting 2 hotel rooms for a night is more expensive than 2BR timeshare rental.
Also, we can cook food by using kitchen, we can save money for meals too.
My kids love space of timeshare units and mama's cooking.
Of course I had to pay not-so-cheap money to buy my timeshares, but it will make even if I use them for many years to come or when I sell them (even if I cannot get the price I paid for them).
So timesharing makes sense to my family.


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## caribbean (Feb 1, 2010)

For those of us that like to vacation for a week  (or more ) at a time and that either like to go to the same place every year or who can plan 18-24 months in advance in order to be able to make good timeshare trades, it can be very economical. We own 7 weeks of timeshare and average about $80-85 per night to stay in 1BR or 2BR condos, including my RCI membership and lots of trade fees. I have turned into a real hotel snob, refusing to stay in a regular room anymore. If we have to stay at a hotel, it minimally has to be one of those extended stay suites with the kitchenette. No better way to cut costs while on vacation than to make a few meals in the room. We have about $9000 "invested" in ownership of our 7 weeks. No it is not a financial investment unless you look at it as an investment in good vacation rates.


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## Timeshare Von (Feb 2, 2010)

The "investment" only pans out, in my opinion, if you do not have the sunk cost of purchasing at full price from the developer.

At a rough average of $100/night for typically 1 or 2 BR condos, and the ability to cook in as much as I would at home (if I so choose to), it is easy to justify the cost of timeshare ownership.

Von

p.s.  We are a mid-aged couple (around 50) with no kids . . . who have enjoyed the ability to take family and friends along too.  That would not have been affordable (for us or them) if we were using hotels and/or rental condos.


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## Conan (Feb 2, 2010)

Take a look at the math in an earlier discussion:

http://tugbbs.com/forums/showpost.php?p=773768&postcount=2

http://tugbbs.com/forums/showpost.php?p=773778&postcount=3

http://tugbbs.com/forums/showpost.php?p=773847&postcount=13


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## chriskre (Feb 2, 2010)

I've done the math and for me including the 7 TS's that I own and all the last calls and 7500 points deals that I get and including all my Membership fees for RCI and II, it comes to about $300 a week for mostly 1 and 2 bedroom stays. 

I do go to the beach about 5 weeks in the summer between what I own and the opportunities that pop up so I say, like was stated earlier, I get to stay in nice digs for Motel 6 prices.  
That works out to about $50 a night.
Can't beat that with a stick.   

Just buy resale.  Then you are way ahead of the game.  

All but one of my purchases was a direct developer purchase.  The rest are all resales from ebay or the resale brokers.  I even bought 2 from another owner.  I don't think you'll regret your puchase when you see what you get in return for your "investment".  

Honestly I look at it as an investment in myself.  I'm single and it gives me a chance to be generous with my family and friends by treating them to vacations with "ME".  I'm the good guy and it gives me bonding time with them.  Of course I don't let them in on how inexpensive my generosity is.  
That's for us TUGgers to know and hopefully for them not to find out.


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## Stricky (Feb 2, 2010)

A quick and dirty way to look at it is to take the annual maintance fees and divide it by 7. This will give you your daily rate. Could you stay at the resort either by renting from the resort or an owner and get the same size accomodations cheaper? If the answer is yes renting might be a better option. If not, then you have to look at the purchase price and add that into the equation to see where your breakeven point is.

Mine worked out to be about 10 years to break even and then I am pocketing money after that. All that assumes that the unit will have no resale value when I sell it (which is unlikely).


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## chriskre (Feb 2, 2010)

I'm not so familiar with Hawaii as I live in Florida but for example if you were able to go on short notice to Hawaii in say March 6th or March 13th you'd find 2 options for 9000 point 1 bedrooms in Princeville, HI.  I'm not sure how nice they are but even in Hawaii there are sometimes last minute inventory that makes owning a timeshare anywhere that you had access to RCI worth the expense in my opinion.  Not just for the week I was purchasing but for the opportunities it opens up to me for short notice travelling at really cheap prices.  I know it probably works best for retirees but I'm far from retired and I still use the heck out of those deals along with the last calls.  II has getaways too but I find that I like the RCI offerings usually better although I have gotten weeks at the Keys for $127 thru II.  

Look into it before making your final decision.  There is a reason why TUG is so popular.  We are all learning to maximize our vacation time.  Hang around here and you'll be addicted too.


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## Patri (Feb 2, 2010)

Most people use the maintenance fees, exchange company membership and trade fees to come out with a value for the vacation. Compare that to a hotel stay, and factor in the t/s amenities, like doing your own cooking, space, activities at the resort. From that standpoint alone a t/s is usually worth it.
But anyone who paid full price from a developer should take that cost into consideration as well. Then it may never be worth it. It's money down the drain, that could have been used for family necessities or suites at a hotel, or just put toward renting at a resort. If you buy resale, and most are darn cheap these days, the bargain will never end.


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## arc918 (Feb 2, 2010)

I have rented a number of timeshares from other owners, but I can't make sense out of being tied to the M&Fs for ETERNITY (based on the way I travel and the timing for which I plan my trips).  

My $.02, YMMV


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## mwwich (Feb 2, 2010)

This question is so personal to each individual/family.  With kids in school, we did 4-5 vacations renting time-shares at what seemed like to us a high cost for peak season ($2K+/week...this was 2002 through 2007 or so), and spending much time trying to find the best deal we could, figuring out where to go, etc.  We finally decided we wanted to have more control over the situation and bought a TS.  So the cost seems reasonable to us, and we value our family vacations enough that they are a priority over other things we could spend our disposable income on (we go 2X every year and will go more as get older and have even more free time).  I wished we would have bought resale, but that's water under the bridge at this point.  I suspect we'll start all over in 5-8 years when we have grandchildren and want to take them to all the same places we took our kids, which means peak season travel, etc.


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## 1950bing (Feb 3, 2010)

TSs are a very poor investment as far as return on your money. It is an investment in time with family anf friends.
I figured I took a huge loss based on what I paid, what I paid to keep it vs. what I got out of it when I dumped it. Based on what I got out of it, priceless.


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## arc918 (Feb 3, 2010)

From a pure economic standpoint there is a reason people are selling them for $1 on ebay (or TUG).  If the inherent value was there for everyone, the price would be much higher.


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## jacknsara (Feb 3, 2010)

Swedegeek said:


> ...  I'd probably use it for trips to Hawaii at least every other year... In other words, to my great regret I'm becoming part of the establishment.  ...


Aloha,
There is a reasonable chance that we would be interested in a Worldmark resale as we enter retirement because of its strength in drive-to locations from Seattle metro. Point being I am not prejudiced against Worldmark.  
Worldmark does have Hawaiian properties and they are most likely adequate for your near term expectations, but I do not consider their Hawaiian portfolio to be their main strength.  
If you are serious about staying in Hawaii every other year, I suggest you take the time to learn more about the options there before buying Worldmark with Hawaii as your 50% objective.
It might be right.  I'm just suggesting that you do your due diligence.
Jack


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## Swedegeek (Feb 4, 2010)

Thanks to all for the perspective - its very much appreciated.

In response to Conan's post referring to the three previous threads: one of them gave a rather elaborate financial analysis, then ended  "Hmm...  it is easy to justify something if you want it, isn't it?"  That seems to be the point - buy a TS if you want it & what comes with it - a place to come back to, the exchange opportunities, time with friends, etc.  The finances are close enough to even to make it a personal choice - do what you want.  And there are lots of opportunities to game the system depending on your individual circumstances - find those & you can score.


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## falmouth3 (Feb 4, 2010)

I am staying 7 days in Manhattan (1 1/2 blocks from Central Park).  For this, I paid $777 in maintenance fees for my home resort and $129 in exchange fees.  I am in a "studio" which is basically a hotel room.  However, I checked online to see how much it would cost me, per night for this place.  Expedia stated $265 a night (plus taxes).  The only places I had to pay something in addition to my maint. plus exchange fee was in Scotland (a small charge for electricity) and in Maui.  I think this is a great deal!!

Additionally, I have 2 bonus weeks booked this year that costing me $499 each for a full week.

Sue


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## theduffster (Feb 5, 2010)

Here's how my first one worked out for me:  

Purchase price of $1.  It gets me a floating red week, even years only.  Maintenance fees are $350/year, only on the even years.  That breaks down to $50/night.  My timeshare rents the same size unit I bought, for $100/night.  

For the second one, we paid $1.  Maintenance fees are $665/year.  This one is more of an emotional purchase, we just love the area so much.  I could probably rent for about the same price for a week, but this way, I'm guaranteed a place there every year.  Plus, it will end in 2025, and by then, I will most likely be ready to end our relationship anyhow.


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## elaine (Feb 5, 2010)

*I use 10 year amortz.*

I do a simpy calculation of 1/10 of my purchase price, plus maintenance fees and say that is my annual cost.  So, if I bought a TS for $5K, have $700 miant fees, my annual cost is $1200----if I can rent comparable lodging for under $1200, then it 's not worth it for me to buy.  I am assuming I am getting zero back at resale--pretty conservative, but with top TS going for cents on the dollar now, i am glad I calculaetd that way 5 years ago.


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## alexadeparis (Feb 7, 2010)

*Results in My Case*

Let me preface this by saying that I found TUG right after I made my first timeshare purchase, which at least was resale. I have owned a total of 7 units (I sold 2 dogs that I purchased before I knew what I was doing, that's a whole other story) and I currently own 5. 


All I can tell you is the costs in my Particular case - lifted directly from my spreadsheet: 

The total Purchase costs for all 7 (including losses for selling those two mentioned above) were $3,432. 

For the 7 and 1/2 weeks I have already vacationed or booked, the total maintenance fees, Exchange company yearly fees, and per Exchange fees have been a total of $5,953.

This is a total cost of $9,385 for 52 nights or 7.5 weeks. The cost per day is $180.48 and the cost per week is $1251.33. 

Of the 7 1/2 weeks I have stayed or booked, I have stayed in 1 studio, 2 one bedrooms, and one 3 bedroom. The other 4 were two bedrooms. All were in Red Time, and were at Gold Crown (RCI) or Premier Resorts (II),  despite the fact that I own some white weeks and some unrated resorts.


Keep in mind that I just bought these timeshares in 2009 and this reflects only 2009 and 2010 use. I expect the average cost to go down over time, since I only purchased these at the end of 2008 and the longer I use them the lower the per use costs will be.

Alternatively, if I use Elaine's reasoning of cost-averaging the cost of the time share over a ten year period, then the cost becomes: $127.69 per night and $885.33 per week.

I have gone or booked the following places: Las Vegas (3 rooms for a family vacation), Wisconsin Dells, Cabo San Lucas, Puerto Vallarta, Orlando, Playa Del Carmen. 

I would say that you would be hard pressed to find a mid-to-higher end hotel room for rent at those prices per night in the hotel industry at those locations, (let alone a 2 bedroom suite), so in my case, it has made economic sense according to my calculations. Anyone that would like to see my spreadsheet, PM me.


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