# Five reasons that TS is a bad investment



## Bill4728 (Sep 7, 2007)

In this article they outline the five reasons that TS is a bad investment

 5-reasons-why-timeshares-are-horrible-investments 


They are: 

1. Time value of money

2. Maintenance fees

3. A depreciating asset 

4. Rental rates are lower than you think

5. Exchanges as the resorts age


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## Jollyhols (Sep 7, 2007)

I have read your attachment and very sadly agree with everything said (at least in my case - I know every owner has different criteria for their vacationing etc etc)


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## shadroch (Sep 7, 2007)

*a better title would be: Buying TS from developers is a horrible investment*

I guess that would be true if you bought from a developer.I bought off of ebay and paid next to nothing.I looked into the cost of renting a two bedroom effeciancy in Mrytle Beack,Ft Lauderdale and Vegas. In all three,it would greatly exceeed my MFs.As far as depreciation goes,my total investment is under $1,000.Let it depreciate.


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## spatenfloot (Sep 7, 2007)

Timeshares purchased from the developer will always be a bad idea unless they change their marketing/selling practices.  It may not be long before the current methods have to be abandoned anyway due to the spread of internet savvy buyers.


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## Bill4728 (Sep 7, 2007)

shadroch said:


> I guess that would be true if you bought from a developer.I bought off of ebay and paid next to nothing.I looked into the cost of renting a two bedroom effeciancy in Mrytle Beack,Ft Lauderdale and Vegas. In all three,it would greatly exceeed my MFs.As far as depreciation goes,my total investment is under $1,000.Let it depreciate.



I agree. The last TS I bought I spent $1500 to buy what the developer want >$15,000. Even if the price continues to go down, how do you go wrong when you saved 90% off of developer prices?


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## scotlass (Sep 7, 2007)

Whoever said it was an investment?  We bought our first timeshare in 1982 from a developer and learned after the fact that the value was half the cost due to the marketing costs added onto the value.  We sold it 10 years later and got our 'value' back, but not what we paid.  We have since purchased 6 more, at prices between $500 and $4500.  I look at it only as an investment in the joy we have in using them which has paid us many times what our initial outlay was.


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## Bill4728 (Sep 7, 2007)

This is the wrap up to the article:



> Timeshares can be a lifestyle expense (notice I didn’t say investment) if they are purchased in the right way and for the right reasons. It may make sense if you and your family know that you love a particular resort and would like to vacation there each year. However, timeshares are not an investment, and timeshare salespeople in most states are prohibited from even using that word.



_It isn't an investment but a lifestyle expense._


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## PigsDad (Sep 7, 2007)

Can't say that I really disagree with the points made in the article as well.  Actually, it was quite refreshing to see an article that specifically suggested to buy resale!

Kurt


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## PigsDad (Sep 7, 2007)

scotlass said:


> Whoever said it was an investment?



Unfortunately, a lot of people still think of timeshares as investments.  As you may recall, there was a hot thread on TUG not that long ago about how buying a property on the Las Vegas strip was such a "good deal", because of the ever-increasing land values, being connected to a casino, etc.  There were claims that made it sound like a good investment.  (However, you can't read those posts anymore, because someone "took his toys and left".)

However, I like Bill's "lifestyle expense" categorization better.

Kurt


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## pedro47 (Sep 7, 2007)

TS for us was a way to force us to take a vacation and to enjoy some roses.

No TS ia not an investment.


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## timeos2 (Sep 7, 2007)

*Buy resale and the picture becomes much better*

If you basically eliminate, or at the least drastically reduce, the upfront portion of the model - in otherwords the developer pricing - and substitute the deeply discounted resale prices the timeshare world is awash in the whole picture changes. 

You still have the ongoing annual fees  - but those can be/should be less than it would cost to rent equivalent accommodations especially in prime times.  The time value of money is virtually zero as you are not paying tens of thousands to so called "prepay" your vacations (which, as we all know now is a fallacy to begin with. The annual fees are the real cost while the big upfront numbers get you virtually nothing but a commitment to those future fees rather than prepaid anything).    

The depreciation - certainly a big number - is already taken when you buy resale. 

Rental rates. Yes they can be very low but usually not for the best times. If you look at when you want/need to travel you may find the annual fees plus a small purchase cost resale put you in a lower cost situation and with the resort you want than renting can. 

And of course exchanging.   If you buy to use  - either a week at a resort you wish to return to year after year in prime time or a mini-system with many resorts you can visit without need the costly membership and fees of a third party exchange company - then what value it has in that world really doesn't impact you or your use. 

Overall I'd say the article has good warnings and the advice to buy resale is the key.  As it is here on TUG and other timeshare sites as well.  The real negative to timesharing is the developer costs, their continuous  attempts to stay on as management at resorts and the never ending games to make you buy more.  The resorts and ownership itself can actually live up to most all of the promises made at the slick presentations if you just do your homework and buy only resale properties.


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## CMF (Sep 7, 2007)

*Semantics*

I do see TS as an investment - I save a ton of money on vacations and I can vacation more often. Spending money to save money is an investment.

And, I do not want to haggle with owners who rent or go through the process of verifying ownership.  I'll rent on occasion, but I would not want to rely on rentals for family vacations.  Finally, there is no pride of ownership in renting.

Charles


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## Bill4728 (Sep 7, 2007)

timeos2 said:


> If you basically eliminate, or at the least drastically reduce, the upfront portion of the model - in otherwords the developer pricing - and substitute the deeply discounted resale prices the timeshare world is awash in the whole picture changes.
> 
> You still have the ongoing annual fees  - but those can be/should be less than it would cost to rent equivalent accommodations especially in prime times.  The time value of money is virtually zero as you are not paying tens of thousands to so called "prepay" your vacations (which, as we all know now is a fallacy to begin with. The annual fees are the real cost while the big upfront numbers get you virtually nothing but a commitment to those future fees rather than prepaid anything).
> 
> ...



Very well said!!

I really liked the part about developers staying on to manage the resorts and continuing to want you to buy more.


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## AwayWeGo (Sep 7, 2007)

*1. You Have the Money. -- 2. We Want The Money. --  3. You Give The Money To Us.*




Bill4728 said:


> I really liked the part about developers staying on to manage the resorts and continuing to want you to buy more.


It's that kind of developer aggressiveness that makes me snap up the timeshare tour freebies & "owner update" freebies with a totally clear conscience. 

Sheesh. 

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


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## PerryM (Sep 7, 2007)

*Another Drive-By Media hit piece...*

What is it with the Drive By Media, the dinosaur media, that they refuse to just give us the facts and let us make the decision ourselves.

This is a hit piece designed to frighten folks – ok, so it did.  Now what?

At least this author is a timeshare owner, but one that hates timeshares and shows his disdain by smearing ALL timeshares no matter how you bought them or how you use them.

Of course the author left out 50% of the argument – the enjoyment that we get using them.  This did not fit the desired result of depicting 100% of timeshares are worthless as an investment.

Well I can use the same arguments to prove that ALL cars are just as bad:

1)	Time value of money.    You could have put the money in the bank and taken a bus each day

2)	Maintenance fees.  An oil change costs $100 for a BMW since it uses synthetic oil.  Those tires wear down and brake pads do to.  Each year the MFs go up

3)	Depreciating asset - That $50,000 BMW loses 35% of its value immediately and in 3 years has lost 50%

4)	I can rent a Kia for $15 a day I think and it gets me from point A to B just fine

5)	Exchanges – I can easily go down to the local bar and yell “Who wants to trade their car for my BMW for a week” and get a lot of takers


As you see this is a no brainer – cars are lousy investments and taxies and public transportation is a much better solution.


Of course what’s missing from all this and the article is *affluence – we want to drive expensive cars and stay at expensive resorts and money does play a role here but it’s the lifestyle the author completely ignored.*

Next time give me 5 Pros to go with the 5 Cons and let me make up my own mind – that’s what the internet is all about.

But what about those 5 Marriotts that I bought, from Marriott, used 4 years either as vacations or rental income, and then sold for a profit?  Does this change the picture?  No, the author never considered this - lack of experience.

And the time value of money – I love folks who seem to delight bringing that topic up when timeshares are discussed yet they never use that same reasoning with buying TVs, lawnmowers, cars, boats, RVs, second homes, basically anything of luxury.  It’s somehow magical to bring that topic up with timeshares, like a pile of money in a bank can generate fantastic vacations and never be used for the college educations for the kids or the hair transplants or the face lifts.

The simple fact is that we timeshare owners leverage our money - the author never brought up that topic.  I pay about $635 to stay at Marriott's that rent for $2,500 and you can throw in the time value of money on the WorldMark credits I rent for $500 from other owners to make the II exchange.

Again our author seems to lack the experience to report facts and simply is fear-mongering, a telltale sign of the old Drive-By Media mentality.


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## Parkplace (Sep 8, 2007)

Alan is right!  Bring on the No Guilt Freebees!!

Our one and only timeshare was purchased through the developer and we sure have felt 'taken' now that we know about Ebay and resale.

But you know, we've had some great vacations because of the mandatory maintenance fees.  So what would life have been like had we not been taken in??  A lot more boring for sure!


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## Steamboat Bill (Sep 8, 2007)

PerryM said:


> Well I can use the same arguments to prove that ALL cars are just as bad:
> 
> And the time value of money – I love folks who seem to delight bringing that topic up when timeshares are discussed yet they never use that same reasoning with buying TVs, lawnmowers, cars, boats, RVs, second homes, basically anything of luxury.  It’s somehow magical to bring that topic up with timeshares, like a pile of money in a bank can generate fantastic vacations and never be used for the college educations for the kids or the hair transplants or the face lifts.



Ahhhh....it is nice to read posts when Perry is on a roll.....I 100% agree with him.

BTW - Perry...what type of car do you drive?


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## PerryM (Sep 8, 2007)

Steamboat Bill said:


> Ahhhh....it is nice to read posts when Perry is on a roll.....I 100% agree with him.
> 
> BTW - Perry...what type of car do you drive?



I drive a 1995 Camry wagon with 130,000 miles and my son drives a 2003 BMW M3 with 43,000 miles - go figure.  My wife drives a 2003 4Runner and we have a 2000 Sienna as an extra car.


Each of the 4 cars serves a special function and results in a robust portfolio of cars that meet our needs.


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## BocaBum99 (Sep 8, 2007)

*ANYTHING can be a good investment if you buy right and know what you are doing*

Timeshares are the best investments ever created when you know what you are doing.  I've bought over 90 timeshares just this year EXCLUSIVELY for investment purposes.

Why?

1. On a given day, someone is buying a product for $20,000 that you can buy for $2,000.  That represents a HUGE margin opportunity.  To make significant money, you only need to buy for $2000 and sell for $4000.

2. When you purchase timeshares for rental purposes, it turns positive cash flow instantly.  Can't do that with residential real estate.  Not that tough to make 25-50% return on invested capital.

3. No property management hassles.  Someone else does all the hard work for you.  

4. You can buy them easily for under $1000.

5. You can purchase them on a credit card.  You can buy and sell them in the time they give you for the 0% APR credit card.  You can use other people's money to finance your business.

6. There is very little competition because almost nobody knows enough about timesharing to properly capitalize on it.  And, sites like TUG promote the absolutely WRONG conventional wisdom that timeshares are not GREAT investments.  

7. If you don't want to do any work rental or selling, you can travel inexpensively by trading up via weeks exchange companies.  My average cost for a 2 bedroom unit for a week including all capital costs is about $350-400.  That includes staying in Hyatts, Marriott's, Disney's, Hiltons, Four Seasons, Westins.  It would cost me easily 5-10 times more to stay in those units that it costs me.  That is a huge return without even having to sell anything.

So, please STOP saying that Timeshares are not great investments.  They are about the single best investment EVER created for savvy families.   It would be better to say that Timeshares are great investments, but I just haven't figured out how to capitalize on it yet.  That would be more factual.

Timesharing is one step above sliced bread and one step below the microwave on the all time list of greatest human inventions.

I am composing this message from a Grand Villa at Old Key West.  Disney rents this unit for over $1100 per night in the slowest off season month.  The general public can have it for about $8500 for this week after taxes.  You can rent it from a Disney owner for about $3500 given how many points it requires.  My cost was $710.  

Here are pictures of the unit:






More pictures on this link


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## PerryM (Sep 8, 2007)

*Imagine that - a smart timeshare owner and not a dumb one..*



BocaBum99 said:


> Timeshares are the best investments ever created when you know what you are doing.  I've bought over 90 timeshares just this year EXCLUSIVELY for investment purposes.
> 
> Why?
> 
> ...



Fantastic example of SMART timeshare usage.

The author reeks of inexperience and was told to do a hit piece on the timeshare market - why?  Well that's all the Drive-By Media can do anymore - they specialize in fear.  If you want the truth you must use the New Media - the Internet.

Let's face it, the author (reporter?) is just ignorant on this topic and can't get into specifics but blubbers about emotions.  Ever notice how dumb the reporters are - they report dumb examples, and find dumb folks to interview - their whole world revolves on how to do things wrong.

Have a great time BB - fantastic leveraging of your money.


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## shadroch (Sep 8, 2007)

Strangely enough,last week I heard Mark Levine making fun of someone for owning a timeshare. I guess thats an example of the so-called  new media knowing so much ,eh?


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## timeos2 (Sep 8, 2007)

BocaBum99 said:


> Timeshares are the best investments ever created when you know what you are doing.  I've bought over 90 timeshares just this year EXCLUSIVELY for investment purposes.
> 
> Why?
> 
> ...



Ah, Boca, you reminded me why we LOVED DVC in it's heyday.  That unit (or one similar) and the free passes at that time was what helped sell us on the idea of DVC. Only later did we discover that the "average" DVC unit not only wasn't as luxurious and large as these beauties but actually tend to be smaller than most timeshares of any given size.  Still those 3/4 BR/BA units are really something.


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## PerryM (Sep 8, 2007)

*SOP*



shadroch said:


> Strangely enough,last week I heard Mark Levine making fun of someone for owning a timeshare. I guess thats an example of the so-called  new media knowing so much ,eh?



Mark's just a lawyer and that's how lawyers talk all the time.   He wasn't trying to pretend he was a timeshare expert alerting folks to something that has never occurred to another living human being.


Our reporter/writer wanted to laud his credentials as a timeshare financial expert and just fell flat on his nose - we could easily supply a hundred examples of how to do this right.

It's easy to spot the Drive-By Media mentality - humans are bad and government is good.  I'm sure part II will show how big brother needs to protect us from evil corporations.  SOP.


P.S.
It's also easy to find the New Media - chat rooms like this where all sides of something are debated and the "reporters" are cross examined by us common folk instead of hiding behind a rigid media that dares not allow another point of view.

The Drive-By's are always wrong too.  Name a topic and they are on the wrong side of the truth - I don't know if they teach the J-School kids this but wrong they are.


P.P.S.
Was just at the ATT store and played with an iPhone - brought up this very thread and linked to the article.  I noticed that I could not add anything or question the writer on that site - I could easily do so here - this is the New Media; we do what the Drive-By's used to do - reveal the truth.

I can't wait for the next "reporter" to sign up with TUG and as post #1 he/she wants timeshare owners to spill their guts - we are an easy source for them.  I want to debate this guy.


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## shadroch (Sep 8, 2007)

Why bother debating a laura engels clone when he ca do engage the real thing.


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## AwayWeGo (Sep 8, 2007)

*Journalism, Shmournalism.*




PerryM said:


> The Drive-By's are always wrong too.  Name a topic and they are on the wrong side of the truth - I don't know if they teach the J-School kids this but wrong they are.


My late father (1916-2002) was a newspaperman, a good 1 who rose to the top of his profession.  He had disdain for "journalism" & "journalism schools."  In the old days before somebody thought up "journalism," he said, newspapermen just wanted to get all the facts right, spell all the names correctly, & write sentences with subjects & verbs that are in grammatic agreement. He said Watergate changed all that.  Ever since Watergate, he said, newspaper people no longer aspire to see their by-lines in their hometown papers.  "Now they all want to come to Washington DC & be Woodward & Lothrop." 

"Woodward & Lothrop" was Dad's little joke.  The famous Washington Post "Watergate" reporters were Woodward & Bernstein.  Back in those days, Woodward & Lothrop was an upsacle department store in Washington DC. 

Dad's point -- & I think he was on to something -- is that when people say they want to become journalists so they can "make a difference," what that means is that they have an agenda they intend to advance, rather than just getting all the facts right, spelling all the names correctly, & writing sentences with subjects & verbs that are in grammatic agreement, as in the old days. 

Nothing stays the same.  Often when things change, something is lost while something is gained.  So it goes. 

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


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## shadroch (Sep 8, 2007)

The Drive-By's are always wrong too.  Name a topic and they are on the wrong side of the truth - I don't know if they teach the J-School kids this but wrong they are.

 Thats quite possibly be the funniest thing I've read here.
The New Media-making the world safe for Musical Comedy.


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## PerryM (Sep 8, 2007)

shadroch said:


> The Drive-By's are always wrong too.  Name a topic and they are on the wrong side of the truth - I don't know if they teach the J-School kids this but wrong they are.
> 
> *Thats quite possibly be the funniest thing I've read here.*
> The New Media-making the world safe for Musical Comedy.



Thank's I'm well known for my deadpan humor.


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## Larry (Sep 9, 2007)

*ANYTHING can be a good investment if you buy right and know what you are doing*



BocaBum99 said:


> Timeshares are the best investments ever created when you know what you are doing.  I've bought over 90 timeshares just this year EXCLUSIVELY for investment purposes.
> 
> Why?
> 
> ...



I couldn't agree with you more Boca Bum and some day when I grow up I want to be just like you doing 90 plus timeshare sales a year. I have stated several times that my timeshares have been some of the best investments I have ever made. Although I don't have the time to do all of the buying and selling that you have done, I do have a similar business model. For about twenty timehares that I have flipped over the past five years I have shown a profit similar to your examples. In addition I currently own seven weeks and rent out our 3 Aruba weeks which pay for all seven weeks of maintenance and then some. That leaves us with four weeks of fantastic vacations every year for free. We also try and combine most of our vacations with ff flyer miles and have been pretty successful doing that as well. 

We only stay at resorts that would cost us at least $250 per night plus tax so I don't know how the writer thinks you can rent the same weeks for just over the maintenance fees unless you are looking for off season weeks. Yes once I learned how to make the system work for me, timesharing has been a great investment both monetary as well as a complete change in lifestyle. 

People at work can't figure out how I can afford going away 3-4 times a year and always staying at outstanding resorts and locations. 

WE LOVE TIMESHARING and everything about it even the hunt (and challenge) for the next great vacation through RCI and II


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