# USA Today article mentions TUG



## libraria99 (Jan 18, 2010)

http://www.usatoday.com/travel/news...es+(Money+-+Top+Stories)&utm_content=My+Yahoo


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## TUGBrian (Jan 18, 2010)

libraria99 said:


> http://www.usatoday.com/travel/news...es+(Money+-+Top+Stories)&utm_content=My+Yahoo



nice article, a bit annoyed he didnt include a link to TUG as he mentioned he would...after all many if not all of the "interviewees" in his article, are tuggers.


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## vacationhopeful (Jan 18, 2010)

And the Maintenance Fees are "all mine", too.


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## pgnewarkboy (Jan 18, 2010)

*No surprises*

I am glad they mentioned TUG and thank the OP for pointing the article out.  But as far as the content of the article it is just the same old, same old, blah, blah.

Why would the timeshare market be any different from the rest of the economy?  People bought timeshares who couldn't afford them in a bad economy.  The economy went bad.  So the point of the article is what?  I bought what I could afford in good or bad times.  I enjoy my timeshares immensely and over 12 years of timesharing have had great vacations at great prices.

Timeshare scams?  Wow.   Whoda Thunk That?  Thankfully there were no scams in the residential real estate market.


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## Egret1986 (Jan 18, 2010)

*Take the time to read the comments*

Some very interesting stuff.  It's mostly folks bashing those who have bought timeshares or those that currently own timeshares.

I have owned happily since 1984.  But by the time I got through reading all of the comments, I was wondering "am I really happy?"

There was one poster who said he was a former timeshare marketing executive.  He made the comment that he believed most states had a 30 day recision period.  I'm not aware of any states that have a 30 day recision period or that ever have.

There was another poster that paid a postcard company to take the timeshare off his hands and was quite happy with that and suggested it to others.  

The folks quoted in the article seemed to be the typical uninformed timeshare buyers (that's how I originally got into timesharing, but thankfully learned to use mine to our advantage from the get-go), either buying from the developer or resale and not putting much thought or effort into it once they paid their money.  Paying all that money and yearly maintenance, and then not using it or attempting to rent it.

It is a shame that a link was not provided for TUG or at least more elaboration about TUG.  If I wasn't familiar with TUG or been directed to the article and that TUG was menitoned, I might have missed it.


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## cgeidl (Jan 18, 2010)

*Glad for TUG*

Didn't see the article but would like to. Can you see it without subscribing?. I bought all my TS from anad by seller and HOA luckily except the first one which was Mexican for ten years only for $1000.In our case we have paid $8000 for total purchase and exchanged about 200 weeks so far. We only have one week we own and the rest are from an HOA which gives us the right to use, The previous owners can pay all past maintenance fees and get their unit back.Very doubtful but we are aging and can give back our TS with no problem as they are worth little or negative today.


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## Egret1986 (Jan 18, 2010)

*Yes, just click on the link in the first post*



cgeidl said:


> Didn't see the article but would like to. Can you see it without subscribing?. I bought all my TS from anad by seller and HOA luckily except the first one which was Mexican for ten years only for $1000.In our case we have paid $8000 for total purchase and exchanged about 200 weeks so far. We only have one week we own and the rest are from an HOA which gives us the right to use, The previous owners can pay all past maintenance fees and get their unit back.Very doubtful but we are aging and can give back our TS with no problem as they are worth little or negative today.



I don't subscribe and I was able to view it.


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## DeniseM (Jan 18, 2010)

Just click on the link in the post and a new window should open up.


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## brigechols (Jan 18, 2010)

Very good article. I read quite a few of the comments. Loved the poster looking for someone willing to *sell *a Hyatt Key West timeshare for *$1* :hysterical:


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## vacationhopeful (Jan 18, 2010)

Having been interview by this author, one of his stated goals was "how has the economy changed your vacationing?". He seemed surprised that I liked my timeshares and had not changed my plans due to the economy.

I also asked him if he had ever been on a TS vacation?  *No*.  Now, considering he is not an owner and never been a guest at a timeshare, I think he has a good understanding for a newbee - IMO.  As he must have talked to a lot of unhappy owners as listed in the article, he did describe their experiences pretty well.  Overpaid on purchases, trying to get rid of the timeshares, ongoing MF expenses, frustrations in exchanging and those costs, locked into school schedules.

As some of the experts in using our timeshares, TUGGERS have learned how to make the most out of their ownerships. This is one of the benefits of reading and posting to this forum. The learning curve is longer than most people will expend to do so (longer than an infomerical). No one interview stated that they did any research before spending big $$$; several implied it was an impulse purchase while on vacation.

Yes, it would have been nice it he painted the vacation picture that we mostly enjoy on our timeshare vacations. Maybe he will do a followup article while he takes a TS vacation or visits several of us during our stays at our favorite resorts. But I do think he educated a lot of USAToday readers as the pictures in the newspaper were great hooks to get readers' interest.  Wish the TUG website was listed, but that might be against the newspaper's policy.


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## mwwich (Jan 18, 2010)

The article was interesting to read, and for sure there are people who wished they never bought a TS and probably shouldn't have.  However, it would have been nice if the author would have brought more balance to the article.  On our most recent TS vacation (November at Marriott Ocean Pointe); we met several couples around the pool and had discussions about the soon-to-open Oceana Palms...and found everyone very happy with their Ocean Pointe purchase.  Most had bought quite a few years ago and come back year after year.  I suspect all these folks bought retail as well, and were still happy with their purchase.

We recently spent two nights in Chicago over the holidays, sharing a 2 bedroom hotel (with Hilton points) with our college age daughters...first time in this room arrangement in years....and never again (I shouldn't say never, probably will again but only out of absolute necessity).....one does get accustomed to a two bedroom TS and the space/comfort it provides...a wife and 2 daughters in one hotel room with one bathroom required us all to be very patient!


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## SDKath (Jan 18, 2010)

I think the two very important things the article pointed out that is a huge and unexpected problem with TS owning is

1)  II and exchanging being unreliable, expensive and nowadays almost useless.
2) MFs rising 20%+ (at Starwood at least) every year.  Plus those special assessments that come out of the blue at the worst time.

Even the most educated and well intentioned owners can't possibly see this coming.  Yes, the TSs are expensive and yes people who can't afford it shouldn't buy it, etc.  But the II and MFs issues are not at all obvious unless you talk to a LOT of owners or read TUG religiously.  Even then, look at how Starwood completely took away our II exchange benefits practically overnight!  Sad.

Katherine


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## TUGBrian (Jan 18, 2010)

Many of you take for granted that you are in the very very small minority of Timeshare owners (or potential owners) who already know whats in the article to be true.

The VAST majority of timeshare owners or new purchasers, will find that article suprising and informative.


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## Troopers (Jan 18, 2010)

IMHO, the article was more about the current economy than the timeshare industry.

People can't pay their TS mortgage now...no surprise!
People can't pay their MF...no surprise!
New sales have decreased...no surprise!
Resale market is flooded...no surprise!

Similar article could have have written about many things.

At least, the article provided useful info about resale scams.


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## rickandcindy23 (Jan 18, 2010)

Reading the readers' comments is a hilarious way to spend a few minutes.  There is what I believe is a salesperson from Orange Lake, who specifically says he isn't a salesman, touting the Orange Lake points system.  

The abusive comments are really unnecessary, too.  You cannot even say anything nice about timeshare (I didn't try) because the nasty people just want to call you a moron or a sucker.


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## Steve (Jan 18, 2010)

*Really Good Article*

Thanks for sharing this with us, Brian...and for your contribution to the article itself.  I think it is a really good article.  It is well balanced and presents an accurate view of the timeshare industry today.  I think the general public will find it both informative and helpful.

Steve


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## JMAESD84 (Jan 18, 2010)

"ARDA's Nusbaum says industry woes can be traced largely to developers no longer being able to package mortgage debt as asset-backed securities sold to Wall Street."

Claiming developers having to hold onto the loans they originate (at very high interest rates no less) as the prime source of industry woes is not the root cause of the industries problems.

While I'm sure it is inconvenient for developers to be unable to dump this paper on Wall Street, which ties up more developer capital, the core problem is and still remains not delivering on the vacation value proposition that they claim to sell.


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## carl2591 (Jan 18, 2010)

> ""<<USA TODAY>>Wyndham Worldwide, the largest time-share operator in the USA, saw sales fall 51% in the first nine months of 2009 to $756 million. It has closed some sales offices and cut 4,000 jobs since late 2008.""



I love this line in the story.. "sales fell to $756 MILLION".. tell you there are still a lot of people? out there still FALLing for the wyndham lie.

also mentioned  Marriott sells fell to $445 MILLLION during the same period..

guess a lot of people have not, or ,found to late this great site TUG.. 

too bad they did not put a link to the tug website. 

oh well, the WELL of used timeshare will stay full for a while..


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## pgnewarkboy (Jan 19, 2010)

Does the article help or hurt the consumer?  If I read this article as a newbie I would NEVER buy any timeshare.  That would be the wrong approach.  The correct approach is to research, understand the pitfalls and benefits, understand my families eonomic situation and vacation habits,preferences and goals and then make an informed purchase or not.  Anybody buying a timeshare should understand the first and primary economic rule of timeshare buying -  IT IS NOT AN INVESTMENT.  You are buying vacations.  When you look at it from that perspective you can begin to make an educated decision.

Will the timeshare industry rebound?  I think so. It is a great and profitable business model.

This was a typical scare tactic article that creates alot of heat without much light.  It is typical of the entire "journalism" business (IMO it is no longer a profession).


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## daisy23 (Jan 19, 2010)

It's interesting that one poster had the thought "am I happy?  (with timeshares)"  after reading the article.  I had that thought too.   It seems that bad news, dishing and criticizing, sells newspapers - nothing new there.   

It really is two issues - are timeshares fun, worth, etc.?  And many of us can answer yes, with great experiences and stories to talk about.

We love the timesharing life, the space in the units, the kitchens, the ability to exchange, etc.   And owning them did make us go on vacations, when we were working, that we otherwise wouldn't have done.

The other issue:  did I make the best deal, get the best price, etc.?   That is harder to respond to for me, if,  like us, one came to TUG long after buying our timeshares from developers.   It is what is it is, and those choices are done with.  We definitely do enjoy the crossover with the points and nights of the hotel/timeshare programs - that works for us.

I'd look at resale now, if I was starting out, for some units - but we have enough.

Interestingly, few of our family or friends are interested in TS even after we tell them about the benefits.  I think  you have to experience them once or twice to really understand TS, so we do try to have them visit us, or bring them along, on some trips.   Spreading the word!


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## SDKath (Jan 19, 2010)

pgnewarkboy said:


> Does the article help or hurt the consumer?  If I read this article as a newbie I would NEVER buy any timeshare.  That would be the wrong approach.  The correct approach is to research, understand the pitfalls and benefits, understand my families eonomic situation and vacation habits,preferences and goals and then make an informed purchase or not.  Anybody buying a timeshare should understand the first and primary economic rule of timeshare buying -  IT IS NOT AN INVESTMENT.  You are buying vacations.  When you look at it from that perspective you can begin to make an educated decision.
> 
> Will the timeshare industry rebound?  I think so. It is a great and profitable business model.
> 
> This was a typical scare tactic article that creates alot of heat without much light.  It is typical of the entire "journalism" business (IMO it is no longer a profession).



Totally disagree.  I think it was an informative article that addressed a lot of issues that non-owners know nothing about.  So what that the end was not a happy story?  That's reality!  Most of us right now are having serious second thoughts about our ownerships anyway and if we could sell for more than a few dollars, we probably would.  Katherine


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## pgnewarkboy (Jan 19, 2010)

*No second thoughts here*



SDKath said:


> Totally disagree.  I think it was an informative article that addressed a lot of issues that non-owners know nothing about.  So what that the end was not a happy story?  That's reality!  Most of us right now are having serious second thoughts about our ownerships anyway and if we could sell for more than a few dollars, we probably would.  Katherine



I have no second thoughts at all.  I am still extremely happy.  I haven't done a survey so couldn't say what most tuggers think.  I can say that most of the people who post are actively using their timeshares.


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## NWL (Jan 19, 2010)

Well I certainly did not look too good in the article!  I’d like to add a few points to our story that didn’t make it in.  First, we are happy with our timeshare, and we never considered “walking away” from our obligation.  We bought what we wanted, when we wanted, with the intention of using it every year.  We were not hoodwinked in to buying by some sleezy sales person.  Our only regret is not being able to predict the future.  Had we known DH was going to be laid off, we would have delayed our purchase.  DH and I had been looking for a place to be 4 week “snow birds” in the winter.  After looking into many options and areas, we decided the timeshare was the best way for us to go, and that the new 2 bedroom deluxe lock-off units were what works best for us. At the time, there were no resales for these types of units.  The thought of staying 2 weeks out of 4 in a studio did not work for us. We had cash for the purchase, but we were using our HELOC until the securities matured.  By that time, the writing was on the wall for DH.  We made the decision to hoard cash and use some of the cash to start our new business and keep paying on the HELOC.  It is our only debt.  House is paid for, cars are paid for, new business is paid for, and we have no credit card debt.  I did look into selling, but since that was not going to work, we decided to make the best of an inconvenient situation.  Thanks to the great folks here at TUG, I learned how to rent my lock-offs to help pay MFs, reserve the best weeks, and generally learn how to use our timeshare in a way we had not originally intended.

We will be arriving at our timeshare this coming Sunday for 2 weeks of warmth (we hope!) and sunshine.  Our new business is doing very well, and we hope to pay off the HELOC balance within a year.  Thank you fellow TUG members for letting me tell the rest of our story!

Cheers!


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## TUGBrian (Jan 19, 2010)

While not TOTALLY suprised by some of the comments, I am suprised at all the high horses that appear to be ridden by the vast majority of the people posting comments in the first place...wow!


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## pgnewarkboy (Jan 19, 2010)

TUGBrian said:


> While not TOTALLY suprised by some of the comments, I am suprised at all the high horses that appear to be ridden by the vast majority of the people posting comments in the first place...wow!




I sold my horse to buy a timeshare.  I now own a rubber ducky.


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## DeniseM (Jan 19, 2010)

I think you can be happy with your own timeshare vacations, *and at the same time*, be unhappy with escalating maintenance fees, escalating taxes, plunging resale values, timeshare scammers, TS management, exchange companies, and the fact that you bought from the developer before you knew any better.  

It's not a black and white issue - you don't have to love it all or hate it all.


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## PerryM (Jan 20, 2010)

*Make it stop....*

With Fannie Mae and Freddie Mac reporting billions and billions of dollars of NEW losses I see no support for real estate in 2010 - that goes for timeshares too.  The insanity that caused real estate to ignore free markets is still at work.

The $1 timeshares on eBay or Craig's List are still way over priced.  Wait for ads to appear, at least on Craig's List, where the owner of the timeshare will pay you money to buy their unit.

Think I'm kidding?

My advice, to anyone who might care, is to not buy timeshares, either from the developer or resale in 2010.

Maybe 2011 will be better - doubt it, but still am hoping.

So, has the timeshare bubble burst?  Not even close folks....


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## pgnewarkboy (Jan 20, 2010)

PerryM said:


> With Fannie Mae and Freddie Mac reporting billions and billions of dollars of NEW losses I see no support for real estate in 2010 - that goes for timeshares too.  The insanity that caused real estate to ignore free markets is still at work.
> 
> The $1 timeshares on eBay or Craig's List are still way over priced.  Wait for ads to appear, at least on Craig's List, where the owner of the timeshare will pay you money to buy their unit.
> 
> ...



I think someone stuck with a timeshare and trying to dump it for financial reasons will not have the money to pay someone to take it.  On the other hand this could be a great time to buy a timeshare on resale if it is a location you desire, a facility you desire, and you can afford to pay the mf.


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## PerryM (Jan 20, 2010)

*Look out below....*



pgnewarkboy said:


> I think someone stuck with a timeshare and trying to dump it for financial reasons will not have the money to pay someone to take it.  On the other hand this could be a great time to buy a timeshare on resale if it is a location you desire, a facility you desire, and you can afford to pay the mf.



Why on earth buy a timeshare when renting them for peanuts is so much less risk?

Most timeshare owners lack the tools, experience, and expertise to really make timeshare ownership superior to renting them.

This will only get worse as folks panic and dump their timeshares for $1 and realize that even at that price the smart buyers want this years MFs paid for by owner, a locked in reservation ready to go, and closing costs completely paid fro by the owner.

Timeshares, all of them, are vastly overpriced right now - developer and resale.  Rent in 2010 and then look at buying in Oct of 2010 for 2011 ownership; maybe.  I still think we have not even gotten close to bottoming out of the real estate market.  This is such a fluid market, right now, that ownership is not worth the risk.

But take my advice for what you just paid for it...


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## SDKath (Jan 20, 2010)

PerryM said:


> Why on earth buy a timeshare when renting them for peanuts is so much less risk?
> 
> Most timeshare owners lack the tools, experience, and expertise to really make timeshare ownership superior to renting them.
> 
> ...



Buy low, sell high.  That's been our motto and it's worked well.  This is a great time to buy!   

K


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## ondeadlin (Jan 20, 2010)

SDKath said:


> Buy low, sell high.  That's been our motto and it's worked well.  This is a great time to buy!
> 
> K



That's an approach that probably worked for you in the past.

There is, however, the chance that the model has significantly shifted. There is strong evidence that this has taken place. There is no guarantee that conditions will ever shift back to the conditions you used to operate on.

You could very well find yourself in a situation with near-worthless (or worthless) timeshares and annually escalating fees.

Anyone who buys now is taking a very significant risk IMO, regardless of what they pay. Your $1 bargain could double in fees and end up costing you $1,000 extra a year _*forever*_.


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## DeniseM (Jan 20, 2010)

> The $1 timeshares on eBay or Craig's List are still way over priced. Wait for ads to appear, at least on Craig's List, where the owner of the timeshare will pay you money to buy their unit.



Catch up, Perry!     There are already Ads on TUG in which the owner is offering to pay someone to take their week!


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## ace2000 (Jan 20, 2010)

PerryM said:


> The $1 timeshares on eBay or Craig's List are still way over priced. Wait for ads to appear, at least on Craig's List, where the owner of the timeshare will pay you money to buy their unit.


 
Yep, time to wake up... reality has already arrived.  

Not exactly an earth-shattering prediction here... unfortunately for us all.


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## PerryM (Jan 20, 2010)

*Oink...oink...yummmm*



DeniseM said:


> Catch up, Perry!     There are already Ads on TUG in which the owner is offering to pay someone to take their week!



Haven't kept up with timeshares in 2009.  If folks are already paying for selling their unit then this should be a clear warning that timeshares should be avoided at all costs.

MF's will simply be ignored, by owners in financial trouble, to the point other owners will refuse to pay and the timeshare enters bankruptcy - I have no idea what will happen to such a timeshare.

Buying now, at negative prices, should be a clear warning that this is a bad decision - go rent the timeshare instead and don't get greedy with deals that you know are too good to be true.

Bulls win, bears win, but pigs get eaten alive...


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## pgnewarkboy (Jan 21, 2010)

PerryM said:


> Bulls win, bears win, but pigs get eaten alive...



The above may have some truth to it but so does "cool heads will prevail".  Warren Buffet ain't too stupid and he has been on a buying spree when others panicked.  I think he's made a few bucks by being cool and analytical and "buying low".

I am still way ahead on the MF versus vacation expense cost/benefit analysis.  I am sure that so are many others.  In life there are hills, and valleys, and ups and downs and cycles and - etc. etc.


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## PerryM (Jan 21, 2010)

*Buy High and Sell Low - or is it the other way around?*



pgnewarkboy said:


> The above may have some truth to it but so does "cool heads will prevail".  Warren Buffet ain't too stupid and he has been on a buying spree when others panicked.  I think he's made a few bucks by being cool and analytical and "buying low".
> 
> I am still way ahead on the MF versus vacation expense cost/benefit analysis.  I am sure that so are many others.  In life there are hills, and valleys, and ups and downs and cycles and - etc. etc.



There is a HUGE difference between the stock market and the real estate market.


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## pgnewarkboy (Jan 21, 2010)

PerryM said:


> There is a HUGE difference between the stock market and the real estate market.



On a practical note I would say that there is no such thing as a "free market" that is defined as a market that works in strict accord with the laws of supply and demand with no government intervention of any kind.  That is an ivory tower theory that does not exist in the real world.  In the real world the government is involved in all markets at all times to one degree or another.  Even during the days of the "robber barrons" in the U.S.A the government did the bidding of the big industrialists so they could have their "free market".  One good example would be the transcontinental railroad which was built with the help of the United States Army and the people who paid the taxes for the army and the soldiers who lost their lives fighting native americans to "clear the land" for the "free market capitalists" of the day to build the railroad.   Today in a more mundane and less brutal way the government and the taxpayers build highways and airports so that trucks, and planes can move the goods of the "free marketeers".  The government and the taxpayers provide the schools and university's so there will be an educated and useful labor force for the "free marketeers".  The government and the taxpayers provide police and fire protection so the "free marketeers" can build stores and warehouses.  The government and the taxpayers enter into international treaties so that the "free marketeers" can sell their goods and services all over the world with an expectation of regularity in international business transactions.   And the government and the taxpayers pass laws and regulations so that businesses can't just steal and defraud each other with impunity.  Yes, of course the government does foul things up sometimes but so do the "free marketeers".


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## Steve (Jan 21, 2010)

As the frequent posters in this thread are well aware, the TUG Lounge is NOT the place for discussing controversial political issues.

Let's get back on topic.  

Steve
TUG Moderator


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## Larry6417 (Jan 22, 2010)

I thought the article was well done. Average buyers are much better off not buying if they're not prepared to do a lot of research.

One point, not mentioned in the article, struck me. The TS industry relies heavily on money from the uninformed. Without money from fleeced retail buyers, many sterling properties would not have been developed. Resale buyers are the winners; they take advantage of the TS built with capital from the initial buyers. Savvy TS users profit from the ignorance of many (the majority of?) TS users. 

The *TRUE* TS business model: Buy a property. Hype the property to uninformed buyers with gaudy trinkets and overblown promises. Sell the TS at inflated prices. Develop the property with money fleeced from initial buyers. Disavow responsibility for the property after selling all the TS or continue to extract excessive MF from owners. 

The TS spokesman's statement that the TS industry's main problem was lack of available credit derives directly from the above business model. Few buyers can pay $20,000 - $40,000 (or more) as a lump sum. Therefore, the true TS business model relies on the fleeced/uninformed having access to easy credit.

I think this credit crunch will have long-lasting effects. Potential buyers aren't eager to buy new TS; even if they are willing, credit is much harder to get. This means that very few new TS will be built. I can't decide whether the credit crunch will be good or bad for TS users. Companies that develop TS will be hurt. Companies that develop and manage TS may look to the management side to make up for losses from the development side; that would be very bad. However, if people abandon or stay away from TS in droves, that may force companies to examine why that's happening. That *might* be good.


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## pgnewarkboy (Jan 22, 2010)

Larry6417 said:


> The *TRUE* TS business model: Buy a property. Hype the property to uninformed buyers with gaudy trinkets and overblown promises. Sell the TS at inflated prices. Develop the property with money fleeced from initial buyers. Disavow responsibility for the property after selling all the TS or continue to extract excessive MF from owners.
> 
> 
> I think this credit crunch will have long-lasting effects. Potential buyers aren't eager to buy new TS; even if they are willing, credit is much harder to get. This means that very few new TS will be built. I can't decide whether the credit crunch will be good or bad for TS users. Companies that develop TS will be hurt. Companies that develop and manage TS may look to the management side to make up for losses from the development side; that would be very bad. However, if people abandon or stay away from TS in droves, that may force companies to examine why that's happening. That *might* be good.



Your assessment of the TS business model is, I think, a bit exaggerated.  Yes, some companies model may have been very close to what you describe but certainly not all and probably not most.  The credit crunch hurts every business in this country - not just timeshares.  People are still buying timeshares even though the numbers have dropped.  How long this will last is anybody's guess but the credit crunch is likely to  eventually end. Life is uncertain.  Not every company or person is a crook and nobody can see the future.  Your basic assumption is that the TS industry at its core is corrupt.  I strongly disagree.  The TS model will undoubtedly be reviewed, revamped, and perhaps at some point discarded. That happens in every business.  Most notable examples would be TV, Newspapers, Radio, record publishing and book publishing today.  It doesn't mean that these industries were or are corrupt.


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## PerryM (Jan 22, 2010)

*For how many years have I been saying this?*

*"The ONLY reason the timeshare industry exists is because ignorant consumers make foolish decisions"*.  I said that on this website 5 - 10 years ago (can't remember just when)

Those of you searching eBay and Craig's list for "bargains" you have decided you know that the US is at the bottom of a cycle and will cycle higher in the future.

I'm glad that you have such analytical skills and wish you all the best.

Me, price tells me everything I need to know about supply and demand in a free market.  That's the kicker here, free markets.  Me, I will not be touching a timeshare in 2010 and I have my own good reasons for not doing so.

Last year I warned folks on TUG not to buy timeshares but timeshare salesreps keep shouting "Fantastic Bargains; once in a lifetime" - well you can buy those same timeshares for less today.

But it's your money and this is just free advice - I did my part; did you do yours?  If you buy now you are proclaiming you know that the timeshare market is poised for a rebound and this is an opportune time to buy.

We haven't begun to see a bottom yet folks - rent and don't buy.

P.S.
If I had to guess - when 10% of all timeshare resorts enter bankruptcy, due to owners not paying dues and then remaining owners refusing to pay higher dues, that would be a great indication of a market bottoming out.  Just a guess right now; but I like the feel of it as one of my timeshare rules.

A barometer of this activity will be articles not about great timeshare bargains but the alarming rate of timeshare resorts closing their doors and entering bankruptcy - when those articles appear, by the Drive-By Press, bottom fishing might commence - if you have a strong stomach.

A good friend of mine went through something like this after a hurricane flattened their timeshare resort and the BOD suddenly were told that their hurricane insurance had problems - my friend held on for 4 years, dutifully paying his MFs all the while.  He has a strong moral compass and would never dream of just not paying those MFs which became almost double to rebuild the resort and sue the insurance company involved with this.

Eventually they won and rebuilt their resort - but he paid over $5k of MFs which he never recouped after he sold his unit, which was a brand new resort, for a huge loss.

Just remember that *you, an owner, have an unlimited exposure to creditors and the government* reaching into your pocket to collect money from that resort - I don't believe any form of insurance covers this contingency.  (Could be wrong on this)

So think twice about "Timeshare bargains" shouted by salesreps either here on TUG, or elsewhere.  You are a partial owner of that real estate and share in any debts it incurs.

A RTU, like Disney, is a different matter all together....


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## timeos2 (Jan 22, 2010)

*Hopefully the model is dead as it has not been good for buyers*



Larry6417 said:


> The *TRUE* TS business model: Buy a property. Hype the property to uninformed buyers with gaudy trinkets and overblown promises. Sell the TS at inflated prices. Develop the property with money fleeced from initial buyers. Disavow responsibility for the property after selling all the TS or continue to extract excessive MF from owners.
> 
> I think this credit crunch will have long-lasting effects. Potential buyers aren't eager to buy new TS; even if they are willing, credit is much harder to get. This means that very few new TS will be built. I can't decide whether the credit crunch will be good or bad for TS users. Companies that develop TS will be hurt. Companies that develop and manage TS may look to the management side to make up for losses from the development side; that would be very bad. However, if people abandon or stay away from TS in droves, that may force companies to examine why that's happening. That *might* be good.



The availability of credit for true real estate has been seriously curtailed. The trumped up "value" of developer priced timeshare purchases has been exposed, hopefully irrevocably, as non-existent. The actual value is less than 10% of developer prices even in the best developments. 

To make matters worse you have to consider the on going costs in addition to the initial purchase. That's where the real money is committed and even the so called names fail to deliver true value in many cases when that element is added in. While a Marriott, Starwood or a Disney may hold 10% of the retail price for resale - maybe - they also have the highest on going fees in the industry with virtually no buyer input/control over what those fees are due to absolute and ongoing developer control of the Associations. A good resale price means nothing when the annual fee you are committing to exceeds the rental / use value.  And in far too many cases that is exactly what is occurring.  

The best model, if there is one, may be the independent resort built out, under owner control and with a strong history of stable fees.  Hopefully it will be well maintained, have a strong owner base with solid financial results that offers good value to those owners in the use and or rental of the property. If so that meets the underlying assumption that you have bought into a promise of vacations for a reasonable cost at a resort you enjoy. If you get that delivered there isn't much more you can expect. 

The monster systems with high overhead, no owner control, freedom to set fees to guarantee corporate profits are killing ownership value. Tied in with the old "own to trade" idea with even more costs and uncertainty and many of the overpriced ownerships offer negative value, as we see in all those $1 to own and even $100 to take my time offers.  And that now includes what used to be the "name" brands less subject to drastic devaluation. They have maintained some resale value but often killed off use value with excessive annual fees that still continue to rise dramatically. 

To be honest I think its best that any expansion of timeshare properties has effectively been killed off by the economic collapse. There is an extremely limited market for timeshare ownerships, it is saturated, and no one has actually addressed the issues of non-prime times that are very tough to make a value proposition to any buyer. It is best that things cool off, resorts have a chance to get fees into line with reality, systems will have a shakeout as those who don't offer value will be squeezed by defaults and, unfortunately, some resorts/system will most likely cease to exist if they fail to adjust to the current market realities. As I've said before if there were never to be another timeshare unit created it isn't a problem. There is enough inventory to last forever and it is up to the owners/Associations to make it all work. They don't need more unwanted and overpriced time dumped into a system that already has 30-60% low value time to attempt to handle. 

The only surprising thing is that there are still developer priced sales occurring. It can only be to the incredibly uninformed now. The other worry is that the push will now become the "sizzle" rather than the steak. All the efforts at sales are tending toward consolidation of existing use rights into clubs or trusts or whatever - more cost to owners that get them nothing but a new way to assign use of what they already own and pay for. We see it here all the time that after a slick presentation buyers pay $3000- $10,000 or more to gain VIP, some type of points or Golden access to systems that, once they are in, don't offer anything they didn't get before but for more upfront as well as ongoing fees charged. It is frightening that the sales folks can make it all sound good and once again separate owners from their money even after they have been seriously burned in the past. They don't lack hubris or creativity for opening owners wallets, but offer painfully little for the outlay.  Most retail sales today seem to be closer to the totally discredited vacation club model rather than a real vacation resort ownership. That is not good IMO.  Buyer beware is certainly the word.


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## pgnewarkboy (Jan 22, 2010)

I bought my timeshares assuming zero resale value.  I understood I was buying vacations and not a real estate investment.  It seemed obvious.  What is not obvious to me is why people are surprised and feeling "ripped off" about timeshares.  Every minute of every day is at risk for every person who lives now or whoever lived.  There are no guarantees of any kind.

 If you are a timeshare owner, did you have great vacations?  If you did you got what you paid for.

  Do you have ongoing maintenance fees?  Whoda Thunk That!  Do maintenance fees go up?  Do rents go up for residential property?  Does the heat and utility bills for homeowners continue to go up? Do your insurance costs go up?  Can you control these costs or are the prices being set without any control by your whatsoever.                                        

Many people talk about personal responsibility for what they do.  It seems to me that very often they really mean they want OTHERS to take responsibility so they can play the victims.


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## PerryM (Jan 22, 2010)

*Take 2 aspirins and wait 2 years....*



pgnewarkboy said:


> *I bought my timeshares assuming zero resale value*.  I understood I was buying vacations and not a real estate investment.  It seemed obvious.  What is not obvious to me is why people are surprised and feeling "ripped off" about timeshares.  Every minute of every day is at risk for every person who lives now or whoever lived.  There are no guarantees of any kind.
> 
> If you are a timeshare owner, did you have great vacations?  If you did you got what you paid for.
> 
> ...



*Assuming a total loss of timeshare purchase price is setting your hopes way too high!*

Therein lies the problem with timeshares now - there is the real possibility of some resorts declaring bankruptcy with owners trying to walk away from MFs and needed repairs and replacements postponed since the owners don't have the cash to pay for it.

Those who made this assumption and selling their timeshare for $1 are sadly realizing that they lost MORE than the purchase price of the timeshare.  Throw in years of MFs and renting something from VRBO looks pretty good and safe.

The safer course of action is to NOT buy a timeshare, under ANY circumstances, until the insanity in the real estate market subsides.  I haven't a clue when that will happen.

As an investor I look at what's going on now, backup a while, and assume the trend will continue the same length of time into the future.  That's how I make projections - I've never seen something better.  I can't, therefore, forecast when the tops or bottoms of a market take place.  Some of you may have this ability to make these calls - I don't.

Using my method of projecting the future has nothing but pain ahead of us.

I hope timeshares survive this turmoil - they are only 40+ years old and really no better than the crazy instruments the real estate market cooked up to deal with the credit debacle they were forced to deal with.  I don't see our government rushing in to save timeshare owners...

So my recommendation to folks now is to NEVER buy a timeshare - EVER.  At some point it might be safe to enter the market again but new things might be superior to timeshare ownership.

*This is still all about just vacations; I'm not sure owing anything but whole-ownership real estate makes any sense anymore.*  Maybe it never did?  Renting might cost more but it shifts risk of ownership to the owner.


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## Larry6417 (Jan 22, 2010)

pgnewarkboy said:


> Your assessment of the TS business model is, I think, a bit exaggerated.  Yes, some companies model may have been very close to what you describe but certainly not all and probably not most. Not every company or person is a crook and nobody can see the future.  Your basic assumption is that the TS industry at its core is corrupt.  I strongly disagree.



At no time have I stated that the majority of the TS industry is corrupt or crooked. What I have stated is that the majority of TS take advantage of the ignorance of potential buyers. The business model of the TS industry is cynical but not necessarily "crooked." 

You state that the majority of TS do not follow my business model. I disagree. Let's name the resorts that work hard to keep MF low. I can name only 2 - Rayburn Country Club and Dikhololo. RCC (I own there) has kept MF the same for 2 years while upgrading its status to silver crown. There may be others, but I can't name them. Even RCC initially sold its units at inflated prices - $20,000 for some units (I bought mine resale for a few hundred dollars). *EVERY* initial TS sale I've seen or heard of was overpriced. Therefore, all the resort companies that sell TS the first time are taking advantage of buyers. Who does this? How about Disney, Westgate, Marriott, Hilton, Wyndham, Starwood, and Hyatt. I wager those companies, by sales volume, are the majority of the industry.


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## Larry6417 (Jan 22, 2010)

pgnewarkboy said:


> Do you have ongoing maintenance fees?  Whoda Thunk That!  Do maintenance fees go up?  Do rents go up for residential property?  Does the heat and utility bills for homeowners continue to go up? Do your insurance costs go up?  Can you control these costs or are the prices being set without any control by your whatsoever.



MF increase at a rate much higher than inflation. The overall average rate of increase is ~ 10% while other TS such as Starwood are closer to 20%. Let's look at the Manhattan Club. In 1998 a 1BR cost a MF of ~ $500 - a true bargain for a week in Manhattan. A mere 12 years later a 1BR costs a MF of close to $2,000. I was there recently and the salesperson I spoke to, "Judith," assured me that the MF have risen only 12% since the developer left. Baloney! The truly sad situation is where unscrupulous management companies take advantage of apathetic TS owners (the majority) to overcharge unit owners.


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## PerryM (Jan 22, 2010)

Larry6417 said:


> At no time have I stated that the majority of the TS industry is corrupt or crooked. What I have stated is that the majority of TS take advantage of the ignorance of potential buyers. The business model of the TS industry is cynical but not necessarily "crooked."
> 
> You state that the majority of TS do not follow my business model. I disagree. Let's name the resorts that work hard to keep MF low. I can name only 2 - Rayburn Country Club and Dikhololo. RCC (I own there) has kept MF the same for 2 years while upgrading its status to silver crown. There may be others, but I can't name them. Even RCC initially sold its units at inflated prices - $20,000 for some units (I bought mine resale for a few hundred dollars). *EVERY* initial TS sale I've seen or heard of was overpriced. Therefore, all the resort companies that sell TS the first time are taking advantage of buyers. Who does this? How about Disney, Westgate, Marriott, Hilton, Wyndham, Starwood, and Hyatt. I wager those companies, by sales volume, are the majority of the industry.



I disagree with that statement and go even further:

*"Every timeshare sold was sold at exactly the correct price".*

No one put a gun to Ma and Pa's head to buy that timeshare.  Ma and Pa had no idea what they were doing and might even have been lied to but they are adults and made a decision that they considered fair.  By definition their sale was "fair".

All free markets cycle up and down - the key word is "free".

In addition to the normal boom and bust cycle we now have something much more sinister added to the caldron - I can't talk about it here but that "extra" ingredient will cost all of us dearly.

As much as we would like to blame the timeshare industry, the salesreps that work there, and conspiracy theories, the developers are selling a legal product, protected by state laws, and the owners signed up for all of this.

Certainly don't sell your timeshares in 2010 - use them to your advantage.  More than likely we will return to the old ways in a few years and 5 years from now those lovable timeshare salesreps will be spinning stories in our heads again and folks will gladly buy new timeshares.

I'd like to see something better than timeshares replace equity ownership and shared usage - don't know what that would be but something will come along and that's what timeshare ownership should fear.


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## Larry6417 (Jan 22, 2010)

PerryM said:


> I disagree with that statement and go even further:
> 
> *"Every timeshare sold was sold at exactly the correct price".*
> 
> ...



Perry, do you think before you write? Let's review your argument: every TS was sold at the correct price.

First, my statement was a subjective observation. Every initial TS sale I've seen was overpriced. How can you possibly disagree with what I've seen? To do so, you would have to know what I mean by "overpriced." If you can buy a TS for $100 then, by my definition, anything more than $100 for that TS is overpriced. That some people want to spend $20,000 for a $100 TS is irrelevant. $20,000 for a $100 TS is "overpriced."

Second, You contradict yourself in different posts. When you responded to pgnwarkboy, you stated that an assumed resale value of zero was too optomistic, that TS, in fact, have a negative value i.e. sellers should pay buyers to take TS. You state that he overpaid for his TS if he paid any amount for it. You can't have it both ways. If the TS, as you state, had a negative value then he overpaid. However, applyng your logic in responding to my post, the price he paid must be "correct" because he was an informed buyer acting in a free market.

Third, reductio ad absurdum (look it up). Applying your arguments means that no buyer was ever swindled by a used car seller. After all, it's a free market. No one ever overpaid for a home during the real estate boom. Again, it was a free market. Also, every hammer that the Pentagon bought for $100 was the "correct" price.

Fourth, "No one put a gun to ma and pa's heads to force them to buy." What does that argument have to do with the price of tea in China? You can bamboozle people to spend more than they should. That in no way means that they spent the "correct price." 

Perry, your arguents are inconsistent and illogical.


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## PerryM (Jan 22, 2010)

*The fog of war...*



Larry6417 said:


> Perry, do you think before you write? Let's review your argument: every TS was sold at the correct price.
> 
> First, my statement was a subjective observation. Every initial TS sale I've seen was overpriced. How can you possibly disagree with what I've seen? To do so, you would have to know what I mean by "overpriced." If you can buy a TS for $100 then, by my definition, anything more than $100 for that TS is overpriced. That some people want to spend $20,000 for a $100 TS is irrelevant. $20,000 for a $100 TS is "overpriced."
> 
> ...



Let me try to recap my attitude towards timeshares:

*Don't Buy One!  Not from the developer or resale and not in 2010.*

Beyond that I view the posts here from different perspectives.

Whatever the selling price of a timeshare, whether from the developer or resale, it becomes a fair selling price if just one person buys it.  By definition that buyer felt it was a good deal.

Are timeshares overpriced?  NO!  Folks buy them all the time.  Now if you find a timeshare that the developer can't sell then they simply lower the price until folks start buying.

I have yet to see a definition of what a timeshare's correct selling price is.  Is it 1/52 the price of a similar whole-ownership condo?  Is that a fair price?  I don't know.

Once a condo is sliced and diced and sold to 50 - 52 owners just what is that condo worth?  My contention is that it is worthless - it has no value as a whole unit since it no longer exists as a whole unit.

The correct answer to the question "What is a timeshare unit worth" is simply what a person/developer can convince another person to buy.  This is no different than anything else for sale.

I'm sure Marriott, Westgate, Disney, Wyndham, WorldMark, etc sold timeshares today.  They ALL were sold at the correct price and it was NOT overpriced; by definition.

But this has nothing to do with should a person buy a timeshare - my opinion is no, the folks who bought today believe they got a good deal and bought anyway.

Hope this makes my position a little clearer.


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## Steve (Jan 22, 2010)

PerryM said:


> So my recommendation to folks now is to NEVER buy a timeshare - EVER.



Perry,

If I had your dismal track record with timeshares (not to mention fractionals, condo hotels, and cruise clubs), then I'd probably feel the same way you do. 

You spent years touting one venture after another that ended up being *terrible* investments.  So now you have decided to warn all of us.  It's rather ironic.  

However, just as your lofty promotions of Trendwest Fractionals at South Lake Tahoe, WorldMark credits, Westgate at Planet Hollywood in Vegas, condo hotels in Daytona Beach, etc. were way off base in the affirmative...now your dire predictions as to the total destruction of the timeshare industry are also off base in the negative.  

In my opinion, your track record gives you *zero credibility*.

Steve


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## PerryM (Jan 22, 2010)

Steve said:


> Perry,
> 
> If I had your dismal track record with timeshares (not to mention fractionals, condo hotels, and cruise clubs), then I'd probably feel the same way you do.
> 
> ...



We use all the above all the time - so are they a bad purchase?

I don't know about you guys but we buy our timeshares to use them, either ourselves or to rent them out.

I don't think they have cost us a penny of cash outlay in the past 5 years - I make money renting them out or get more value using them than renting them from Redweek.

Until I sell them the transaction is open - that might be 10 - 20 or more years.

I dare say that everyone who has bought a timeshare in the past is a loser by your definition.

I did buy and sell 5 Marriotts and made a net profit from them - they are completed transactions.  You conveniently left those out if you've been following me.

So, are we all losers at this point?  You might think so, I don't.

P.S.
All I'm saying is that buying timeshares today is a very very risky "investment" - simply rent in the mean time and in 2011 things could get better.

But there are plenty of folks out there who will advise you to do the opposite - buy a timeshare now.  You will have to decide which voice is correct at this instant.

I use dynamic judgments - today is a bad day to buy a timeshare, tomorrow might be a great day - years from now going back to this post and referencing it as a reason to not buy is meaningless - things change all the time.  As an investor my opinions are based upon forecasts I make.


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## DeniseM (Jan 22, 2010)

Perry - was you Maui condo completed?  Have you stayed there yet?  How do you like it?

And if your PH rental ends up on the Last Minute Rental Board - I get first dibs!


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## PerryM (Jan 22, 2010)

DeniseM said:


> Perry - was you Maui condo completed?  Have you stayed there yet?  How do you like it?
> 
> And if your PH rental ends up on the Last Minute Rental Board - I get first dibs!



I wish I could tell you about all our experiences with timeshares, fractionals, condo hotels, whole-ownership but I've found that its something I don't share anymore with folks.  Whatever I say becomes frozen in the past and bringing it up to date just takes too much of my time; and I don't make any money from it.

Maybe someday I'll publish an eBook on our adventures; I publish many eBooks now but don't really see a market for timeshares.

Sorry but that's my answer.

I'm here to advise folks that bottom fishing for timeshares at this time is something I'd not do even with a 10' pole.

I did the same 1 year ago and got just as hostile a reception - oh well, I did my part.  The same exact arguments were used back then as today - I was right then and now but I know it upsets some folks.


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## DeniseM (Jan 22, 2010)

I'm not trying to criticize you Perry - we own right next door at the Westin and I was just interested in the property.  I actually exchanged PM's with you about it when you bought there. No worries.  

BTW - Our timeshares don't cost a cent either (ongoing) and I have at least one major bottom feeder and probably another 3 with no real resale value.  Actually, I probably only have one with any resale value!


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## Cathyb (Jan 22, 2010)

testing for work


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## PerryM (Jan 22, 2010)

DeniseM said:


> I'm not trying to criticize you Perry - we own right next door at the Westin and I was just interested in the property.  I actually exchanged PM's with you about it when you bought there. No worries.
> 
> BTW - Our timeshares don't cost a cent either (ongoing) and I have at least one major bottom feeder and probably another 3 with no resale value.



In private I'll discuss our real estate investments but not in public.

I'm sure many TUG folks make timeshare ownership free each year.  I get tempted to buy another timeshare all the time - I don't since I believe there will be ample time to buy them for a much cheaper price and with less risk after the real estate market bottoms out.


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## gmarine (Jan 22, 2010)

You know its ok to be wrong, Perry.  Its great that you use your timeshares but in the past you have touted them and other things as investments. Then when they dont work out as an investment you have deleted previous posts and/or changed your opinion on them as if you were right all along. I think that may be why you encounter some of the criticism that you do.

Everyone makes mistakes. Whether you can admit to making mistakes is more important than actually making them.


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## PerryM (Jan 22, 2010)

gmarine said:


> You know its ok to be wrong, Perry.  Its great that you use your timeshares but in the past you have touted them and other things as investments. Then when they dont work out as an investment you have deleted previous posts and/or changed your opinion on them as if you were right all along. I think that may be why you encounter some of the criticism that you do.
> 
> Everyone makes mistakes. Whether you can admit to making mistakes is more important than actually making them.



I'm glad so many of you are perfect human beings - I'm happy for you.

I've given my opinion on this topic and it hasn't changed in 1 year.  If you guys want to debate the wisdom of buying a timeshare now I'm happy to participate in that - if you can't debate the topic then I understand all the diversions thrown up.

I was right 1 year ago and am right now and will be right 1 year from now; buying a timeshare in this climate is very very risky.

That's my opinion - if you have strong arguments and persuade me to change my mind that's the very definition of a chat-room.


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## pgnewarkboy (Jan 23, 2010)

PerryM said:


> *Assuming a total loss of timeshare purchase price is setting your hopes way too high![/B.*


*

I disagree with you close to 100% on this whole topic but I like your style of "in your face" argument without being nasty on a personal level. I say I bought with zero expectations and you reply by saying my expectations were still too high.  That's a hoot!   You don't see enough of it these days.*


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## Larry6417 (Jan 23, 2010)

PerryM said:


> Timeshares, all of them, are vastly overpriced right now - developer and resale.



According to Perry: All TS are *overpriced*.


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## Larry6417 (Jan 23, 2010)

PerryM said:


> *"Every timeshare sold was sold at exactly the correct price".*



According to Perry: No TS is overpriced.


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## Larry6417 (Jan 23, 2010)

PerryM said:


> I don't think they have cost us a penny of cash outlay in the past 5 years - I make money renting them out or get more value using them than renting them from Redweek.



According to Perry: MFs are *less* than rents received.


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## Larry6417 (Jan 23, 2010)

PerryM said:


> Why on earth buy a timeshare when renting them for peanuts is so much less risk?



According to Perry: MFs are *greater* than rents received.


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## Larry6417 (Jan 23, 2010)

PerryM said:


> The insanity that caused real estate to ignore free markets is still at work.



According to Perry: Freely-negotiated prices are *insane*.


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## Larry6417 (Jan 23, 2010)

PerryM said:


> Whatever the selling price of a timeshare, whether from the developer or resale, it becomes a fair selling price if just one person buys it.  By definition that buyer felt it was a good deal.
> 
> The correct answer to the question "What is a timeshare unit worth" is simply what a person/developer can convince another person to buy.  This is no different than anything else for sale.



According to Perry: All freely-negotiated prices are, by definition, *sane*.


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## Larry6417 (Jan 23, 2010)

PerryM said:


> I've given my opinion on this topic and it hasn't changed in 1 year.



Perry, your opinion hasn't been the same for one thread, never mind one year.

Make up your mind! I'm getting whiplash watching you reverse yourself.


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## timeos2 (Jan 23, 2010)

*Trying to change the past or meaning of words didn't even work for a President or two*



PerryM said:


> I was right 1 year ago and am right now and will be right 1 year from now; buying a timeshare in this climate is very very risky.
> 
> That's my opinion - if you have strong arguments and persuade me to change my mind that's the very definition of a chat-room.



Saying this just once as I don't want to have Perry scared off (I enjoy his postings) this statement is more than a bit of revisionist history. While not exactly a year ago, more like 15 to 18 months now, the (now deleted) thrust of his posts of that era were the great value of timeshare "investment" - specifically the "worlds best timeshare" at the PH Tower.  Unfortunately we cannot go back and read that as it was all excised (by the original poster).  So to say "I was right" a year ago isn't an accurate representation of the facts. 

However in general the posts make for good reading and certainly stir things up. Given that, if you don't take them as gospel, or even 50% correct most of the time, they are great launching pads for discussion.  Not at all recommended as guidelines for your choices picking timeshares or any other serious financial choice, except possibly as red flags for things to avoid given the track record.  As I've said before I seriously doubt Perry actually believes or does much of what he posts, but I could be wrong.   We do agree NOW that in general purchasing timeshares for any reason other than using it is a foolish move.  And even for use the buyer needs to be extremely careful and fully recognize the commitment being made to current and future costs. We completely agree (at least as of the most recent posts) that any retail purchase makes zero sense for a multitude of reasons.


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## JMAESD84 (Jan 23, 2010)

PerryM said:


> I'm glad so many of you are perfect human beings - I'm happy for you.
> 
> I've given my opinion on this topic and it hasn't changed in 1 year.  If you guys want to debate the wisdom of buying a timeshare now I'm happy to participate in that - if you can't debate the topic then I understand all the diversions thrown up.
> 
> ...



I'm not a perfect human and I agree that the timeshare climate is very very risky.  If you are thinking of a purchase (even one where you are paid to take ownership) and it is something that you will not be able to use (eg. you have 4 weeks of vacation time from your work and this is your say 12th timeshare), then you subject yourself to the risk that it will not rent at a high enough price to cover any and all cost you've commited too in becoming the owner.

Further, using yourself or not you risk that if you had to liquidate that you would do so at a loss relative to your acquistion costs or subject yourself to other damages such as damage to your credit rating.

That said, Perry you have not purchased in the past year, are not advising purchasing now or for the next year.  You rationalize that your advise was correct a year ago because with the benefit of hindsight you see that the average price has dropped significantly and on average timeshares have less liquidity and lower rental value now than one year ago.  You rationalize that todays advise is correct because you forecast more of the same.  Your assertions seem logical to me.

For those that choose to take on such risks at this time, against your advise, they are simply at the beginning and "the transaction is open" as you say until "they sell".  It is logical to me to view a purchase done at today's best price to be superior to a purchase completed longer ago "and still open" such as the inventory that you still own.   With hindsight it would be logical to view your decision to buy what you did when you did, as incorrect and any advise given at that time to purchase equally flawed.


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## PerryM (Jan 23, 2010)

*The quick brown fox...*

Ok, I'll use smaller words....

Just because I have a stock portfolio that has a net asset value less than purchased price does not mean that I'm a loser.  I can have dividend income and hope to get capital gains by holding it for a longer time period.  Only when the stock is sold can you finalize the actual transaction; the key words are "completed transaction."

Same with the timeshares we own - sure the liquidation value is less than the purchase price as a whole but I generate cash rentals or use the unit and keep track of the savings of the prevailing rental price minus the MFs paid.  If I stay at a place over New Years week where the MF is $700 and the rental price I know I could get is $2,000 then I keep track of the $1,300 that I did not have to pay - its the exact opposite of "lost opportunity cost", I call it "Found opportunity savings".

Net net, our portfolio of timeshares generates a positive cash flow AND we get to stay at some for far less than renting from another source.

In my book that's a winner - some here think that's a loser - we all have our own definitions.  I'm not dumping our units on eBay for $1 but putting, or keeping, cash in my pocket from our timeshare portfolio.

I know how to do these things, and have tried to show others how to do the exact same thing.  Sadly there is no money in it for me right now and I focus on profitable endeavors.  

However, political forces (which I can't discuss here) have me extremely negative on buying any new timeshare - that's what I'm trying to say.

I notice that no one has jumped in and shown me wrong on this topic and must conclude that in the year I've been shouting "Don't buy a timeshare" I've been correct and will be correct in 2010 too.  I guess you guys can play word games but that doesn't address what the OP's article reference addresses.

Hope that makes my position clear, I'm not sure I can use even smaller words on this topic...


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## PerryM (Jan 23, 2010)

*What's that sound?*



JMAESD84 said:


> I'm not a perfect human and I agree that the timeshare climate is very very risky.  If you are thinking of a purchase (even one where you are paid to take ownership) and it is something that you will not be able to use (eg. you have 4 weeks of vacation time from your work and this is your say 12th timeshare), then you subject yourself to the risk that it will not rent at a high enough price to cover any and all cost you've commited too in becoming the owner.
> 
> Further, using yourself or not you risk that if you had to liquidate that you would do so at a loss relative to your acquistion costs or subject yourself to other damages such as damage to your credit rating.
> 
> ...



Good grief, those that dislike my opinions use the same exact logic - they see falling resale prices and declare my purchases a loser.

Guys, you can't have it both ways.

I contend that using my skills at timeshare ownership have enriched my family's life and put cash in our pockets - the very definition of why folks come to chat rooms to learn.

I have no intention of flipping timeshares, like many here have recommended, I buy a timeshare to use it, either ourselves or as rental income - I'm very good at doing this.

But I've stepped on many toes in the process and expect to hear yeps..  Folks be very careful of folks who recommend flipping timeshares or buying them now - especially if they make a livelihood selling the very timeshares they are shouting about.

Don't buy a timeshare in 2010 - either from the developer or resale; unless you have a strong stomach and know what the heck you are doing.

P.S.

Price, of a product or service, tells you a lot.  With eBay timeshares going for $1 this is NOT a seller's market and you should not sell if you can hang on.  But price tells us that's exactly what is going on - folks are dumping timeshares like crazy and there are folks buying them who believe they made a wise decision.  Until the transaction completes that verdict is in the air.

The MAJOR new ingredient to this mixture is risk of bankruptcy by the resorts.  We have not had to contend with this before but now becomes a risk factor that is basically unlimited.  As more and more owners "walk away" from their MFs the resort must add that lost revenue to the bill of those that pay.  This can go on only so long before bankruptcy is forced on the resort.

Then the words "Become an owner in this resort" will ring in your ears and drain your bank account.  This is why I don't recommend anyone buy a timeshare under any circumstances in 2010 - this risk factor is new and is frightening.


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## gmarine (Jan 23, 2010)

Hey, no worries about ever being wrong. You can always go back and edit or delete your posts. Then you can go ahead and be right like you always pretend you are. 
I just hope newcomers to TUG see through it all. Those of us who have been here a while remember all the failed "investments" you touted in which you went back and deleted your previous posts. Hence your lack of credibility.


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## PerryM (Jan 23, 2010)

gmarine said:


> Hey, no worries about ever being wrong. You can always go back and edit or delete your posts. Then you can go ahead and be right like you always pretend you are.
> I just hope newcomers to TUG see through it all. Those of us who have been here a while remember all the failed "investments" you touted in which you went back and deleted your previous posts. Hence your lack of credibility.



I must admit I made a huge mistake on TUG - the absolute hatred of Westgate - to the point of what I did to you guys 2.5 years ago still has you crying.

I promise that the legal maneuver I used on you Westgate haters will not be repeated by me; it can't since TUG rules were changed over what I did to you guys.  In fact I just published my review of Planet Hollywood Towers and kept the actual review from reaching those who despise Westgate here.

See; I do admit my mistakes and try to correct them.

This thread has become all about me, once again, and that's not what the OP wanted or me for that matter.  However, whenever I join a thread the viewership goes ballistic and the old adage about any publicity is good publicity rings true.  I know because my website is extremely busy with TUG viewers - I keep track of who visits my website and where they came from.

Thanks again...


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## AwayWeGo (Jan 23, 2010)

*Within Reasonable Limits.*




gmarine said:


> You can always go back and edit or delete your posts.


Not always, not any more. 

Some time back, the TUG-BBS Grand Pro rejiggered the settings so that the opportunity to edit or delete entries goes away after 24 or 48 hours or some such. 

That was after somebody went back & 86d all prior entries, long after the fact, in a long-running TUG-BBS discussion to which lots of others had also contributed. 

Now we have only a day or so to eat our words before having to live with them on TUG-BBS -- a change for the better, I'd say. 

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


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## timeos2 (Jan 23, 2010)

PerryM said:


> Same with the timeshares we own - sure the liquidation value is less than the purchase price as a whole but I generate cash rentals or use the unit and keep track of the savings of the prevailing rental price minus the MFs paid.  If I stay at a place over New Years week where the MF is $700 and the rental price I know I could get is $2,000 then I keep track of the $1,300 that I did not have to pay - its the exact opposite of "lost opportunity cost", I call it "Found opportunity savings".



Wow. Using this method I can see that there would never be a negative value to a timeshare purchase. Although I used my week, at a cost of say $800 annual fee, I avoided renting a similar prime week at the resort which someone advertised at say $1800 - no idea if they can actually get that or not (most likely not), therefore I "made" $1000!  I hope it gets reported as income!  

See what I mean about thinking that Perry really cannot believe most of what he posts. Or he is really good at fooling himself. Does anyone feel this method of return makes sense?   It is reminiscent of the "savings" on a shopping trip from buying discounted items that exceed the quantity you can use before it spoils. Very much a false "savings".


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## AwayWeGo (Jan 23, 2010)

*I. R. S.*




PerryM said:


> If I stay at a place over New Years week where the MF is $700 and the rental price I know I could get is $2,000 then I keep track of the $1,300 that I did not have to pay - its the exact opposite of "lost opportunity cost", I call it "Found opportunity savings".
> 
> Net net, our portfolio of timeshares generates a positive cash flow AND we get to stay at some for far less than renting from another source.


What does the Tax Man think about that ?

Or is it just _Our Little Secret_ ? 

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


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## JMAESD84 (Jan 23, 2010)

PerryM said:


> Good grief, those that dislike my opinions use the same exact logic - they see falling resale prices and declare my purchases a loser.
> 
> Guys, you can't have it both ways.
> 
> ...



I certainly don't want to make this thread all about Perry.  Your advise to avoid purchasing timeshares now due to the risks involved my prove correct.

However, your agrument that now is not a superior time to purchase compared to when you made your decision to purchase is non-sense.  

If I where to purchase now the exact timeshare you purchased and my costs today are significantly less than yours (even factoring in any VALUE) obtained in the years you owned, purchasing now is better than then.

You - Then $15000 acquisition, two years use producing $2600 VALUE, net net $12400.
Me - Now $5000 acquisition. net net $5000.

We now both own the same risk and we both could lose everything invested.  Yet your loss is $7400 greater.  True that both could prove to be bad decisions, yet in the above example someone purchasing today puts less capital at risk and if there ever is a reward they will realize a greater reward.


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## PerryM (Jan 23, 2010)

*Let me know...*

@AwayWeGo - don't put your ethics on my shoulders...

@timeous2 - I know I hurt you the most - I am profoundly sorry (really)...

Well if there is no more debate left on this topic I'm off to another website - PM if you want to debate anything but me on this topic.  I really don't want to hijack the OP's thread.

Until then, my Google Analytics account thanks everyone here and so do I.  (If you don't know what that means that's ok, it won't hurt you)


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## JMAESD84 (Jan 23, 2010)

Now nothing about Perry.

There has always been risk and reward in owning timeshares, that will never change.  There has never been a set price that timeshares transact at.  Multiple weeks of the same type at the same resort could transact over a short period at a wide range of prices ($-300, $1, $500, $5000 or $12,000).  Anyone involved in these transactions could be in the either the buyer or seller roles.

There are people who make money transacting timeshares and those that lose money transacting timeshares.  I own many timeshares (many more than I could possibly use in a year) and to date have only liquidated one (at a not so insignificant profit).  

I have acquired a timeshare in the past year.  I am acquiring another timeshare right now.  I would not rule out future acquisitions.  I am actively persuing the liquidatiion of some of the timeshares that I hold and will liquidate them as the correct opportunity to do so occurs.

I believe that I am acting in a sane and informed manner given the present risks.


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## AwayWeGo (Jan 23, 2010)

*Fret Not.*




PerryM said:


> I really don't want to hijack the OP's thread.


Shux, hijacking discussion topics is 1 of the many endearing salient features of TUG-BBS. 

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


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## Clemson Fan (Jan 24, 2010)

pgnewarkboy said:


> I like your style of "in your face" argument without being nasty on a personal level.



I agree.  I'm a Perry fan.  I don't really care whether he's right or wrong most of the time, but I like his "style".  It would be a shame if he got shoved out of TUG.


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## pedro47 (Jan 24, 2010)

What a very nice article about this web site in the newspaper and a very enjoyable reading thread.

Knowledge is power and freedom of speech is worth a million dollars.

I know I am off the subject again.


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## Ken555 (Jan 24, 2010)

PerryM said:


> The MAJOR new ingredient to this mixture is risk of bankruptcy by the resorts.  We have not had to contend with this before but now becomes a risk factor that is basically unlimited.  As more and more owners "walk away" from their MFs the resort must add that lost revenue to the bill of those that pay.  This can go on only so long before bankruptcy is forced on the resort.



This is a salient point worthy of consideration.


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## JMAESD84 (Jan 24, 2010)

Ken555 said:


> This is a salient point worthy of consideration.



The issue of spiraling defaults, due to "walk away" owners non longer willing or able to pay ever rising maintenance fees, potentially leading to the bankrupcy of the resort has been discussed in other threads on TUG. 

The possibility has been raised that a planned reorganization under bankruptcy law may in fact be the mechanism to effect the changes necessary in the governing documents of the resort that would allow it to emerge as a viable entity.  The types of changes that could not be made otherwise.  

Another possible resolution would be the liquidation of the resort via bankruptcy.

Since either would seem a likely remedy where it is most needed in correcting the true cost of timeshare ownership (ongoing fee obligation), I do not view this in a negative light.  It may just be what the doctor ordered for some resorts.


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## Larry6417 (Jan 24, 2010)

JMAESD84 said:


> The issue of spiraling defaults, due to "walk away" owners non longer willing or able to pay ever rising maintenance fees, potentially leading to the bankrupcy of the resort has been discussed in other threads on TUG.
> 
> The possibility has been raised that a planned reorganization under bankruptcy law may in fact be the mechanism to effect the changes necessary in the governing documents of the resort that would allow it to emerge as a viable entity.  The types of changes that could not be made otherwise.
> 
> ...



I agree. Bankruptcy, for some resorts, may be the best option. But what happens before the bankruptcy concerns me. TS will respond to the decreasing owner base by squeezing remaining owners even more. And those owners who faithfully pay their MFs may find themselves, after the TS's bankruptcy, with worthless deeds. Caveat emptor doesn't describe the enormity of owners stuck in lousy resorts.


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## MOXJO7282 (Jan 24, 2010)

timeos2 said:


> Wow. Using this method I can see that there would never be a negative value to a timeshare purchase. Although I used my week, at a cost of say $800 annual fee, I avoided renting a similar prime week at the resort which someone advertised at say $1800 - no idea if they can actually get that or not (most likely not), therefore I "made" $1000!  I hope it gets reported as income!
> 
> See what I mean about thinking that Perry really cannot believe most of what he posts. Or he is really good at fooling himself. Does anyone feel this method of return makes sense?   It is reminiscent of the "savings" on a shopping trip from buying discounted items that exceed the quantity you can use before it spoils. Very much a false "savings".



I do think Perry has a point here. I keep an ROI (return on investment) document that records all costs and values associated with my TSs, and I do see it the same way honestly. So when I fly my family 1st class to Maui from the points I received from my Marriott purchases, I enter a value that represents what I would have spent to do that otherwise. I am very conservative however, because want my figures to be accurate. For the 1st class to Maui I use $8500, because the cheapest I've ever see for 1st class to Maui during prime season.

For rentals I use the estimated prevailing redweek rentals which I know because when I'm not using them, I'm renting them, and have done so successfully for 8 years, so I know the market real well. 

As for buying a TS now, I really can't speak outside of Marriott, but I can tell you from what I know about certain MARRIOTT TSs. That is , if I had more capital, I'd be snatching up every well-priced resale at Newport Coast plat, Aruba Surf plat, Mrytle Beach Plat+, Grand Ocean plat or gold.   

I say this because I know these markets very well, and even in this downturn, these things rent without fail.

I had one of my best years renting my units, and I discovered something very interesting. Because of the downturn market I didn't rent my units as soon as usual at the 7 months mark. Instead I rented them closer to 90 days from check in.  Usually my rental ads are off the listings well before the 90 day mark so I had no idea the volume of last minute travelers to these popular destinations.

I discovered that if I had more weeks I would have definately rented more. After I rented my Aruba Surf Feb week to gauge traffiic I left the ad up. I counted at least 5 other committed renters for that week. 

Same with my Maui units. We're going in 2 weeks, but not using my own weeks. I had sme job concerns to I found two renters for my weeks, and made hotel reservations in case we could go. As it turns out I found my exact week in a dstress rental and really made out.

Same with my Mrytle Beach July 4th week. If I had 10 of those weeks, I'd rent everyone of them for at least 3x MF.


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