Calculating the cost of a TS

[gingram]

After reading through the thread, I started wondering a bit about how the numbers really work out. So I went through and put together a year-by-year spreadsheet. Here's the highlights:
Assumed starting savings of $18,525
additional saving of $2,000 every year (to pay for the vacation rentals)
purchase price of $17, 525
maintenance fees of $1,000 ($200 of which are real estate taxes)
rental price of $2,000 for the same unit
interest rate of 5%
upper tax bracket of 28%
maintenance fees and rental fees grow at the same rate as inflation
all dollars are Year 1 dollars (I didn't want to deal with inflation factors)


...................................T/S Purchase..............Renting

Year 1..Savings................$18,525.00..........$18,525.00
...........Purchase..............(17,525.00)..................0.00
...........MFs......................(1,000.00)...................0.00
...........Rental..........................0.00.............(2,000.00)
...........Subtotal.......................0.00............16,525.00
...........Interest........................0.00................826.25
...........Taxes.........................56.00...............(231.35)
...........Year 1 Totals...............56.00............17,119.90........$17,063.90

Year 2..Savings................$......56.00.........$17,119.90
...........Additional Savings.....2,000.00............2,000.00
...........MFs.......................(1,000.00)................0.00
...........Rental...........................0.00...........(2,000.00)
...........Subtotal..................1,056.00...........17,119.90
...........Interest.......................52.80...............856.00
...........Taxes..........................41.22.............(239.68)
...........Year 2 Totals............1,150.02..........17,736.22........$16,586.20

...

Year 10.Savings................$ 9,993.97.........$22,718.48
...........Additional Savings.....2,000.00............2,000.00
...........MFs.......................(1,000.00)................0.00
...........Rental...........................0.00..........(2,000.00)
...........Subtotal.................10,993.97.........22,718.48
...........Interest......................549.70..........1,135.92
...........Taxes.........................(97.92)...........(318.06)
...........Year 10 Totals.........11,445.76.........23,536.35.........$12,090.59




The difference between the totals is what you'd have to sell the T/S for in order to break even. Did I leave anything major out of the calculations?

If anyone is interested in playing with the numbers, I'm attaching the spreadsheet (it should be easy enough to figure out how to play with the numbers). Hopefully it's ok to attach a spreadsheet. I apologize in advance if I'm breaking any rules, but I didn't see any mention of it one way or the other.

 

[JimIg23]

That went right over my head. Do you still get to go on vacation?

 

[PerryM]

Where are you finding renters for Park Plaza?

Most of my rentals are on eBay, MyResortNetwork next, and then RedWeek.

I will say that this year, for whatever reason, was hard to rent. Last year was super easy. It changes all the time.

 

[tompk]

and if you get an a/c every year that gets you a 2nd vacation week for $299 that you would otherwise also have to rent for an additional $1000 or $2000?

 

[cp73]

Lost or found Opportunity Cost

I strongly advise folks to look at a timeshare AS an investment and expect a lot from it – so much so that they completely pay for themselves, MFs, and ALL the costs of vacationing.

Simply look at the timeshare as an investment and NOT a pre-paid coupon book of reservations. It’s all about attitude.

First, remember I have a timeshare and love it. It took me 10 years of looking at these things to finally pull a resale buy. That was only after I was pretty sure I couldn't lose any money. Keep this in mind when you are doing your "Lost or Found Opportunity Analysis:

1. Your paying for 7 nights of vacation each year, regardless if you want it or not. Yes you can rent it out but most here on this board have probably never done that. In the last 25 years I probably only one or twice taken a vacation 7 nights away from home all in the same week. In fact, some of my timehshare stays I have either trimmed a day off at the beginning or the end of the 7 days. If your working it may not be easy to stay 7 nights away. If so you cost per night goes up...

2. Your timeshare is not liquid. In other words if you decide you dont want to spend that amount of money on vacations every year your probably going to be forced to sell at a less than market value.

3. As far as found opportunity (see previous posts).....the example sited has a lot of ifs attached to it. But it does show that if you do this thing right you can keep your costs down to where is it a cost effective way to vacation.

 

[lgreenspan]

Timeshare cost calculator

Here is a link to a website timeshare cost calculator



http://timesharecostcalculator.com/

 

[JT62]

Here is a link to a website timeshare cost calculator



http://timesharecostcalculator.com/

I tried to use this and it required you to enter your email address to get the calculation.

JT