Did I get the timeshare details right?

[oldmimbler]

First, hello everyone and thank you for having such a wonderful and informative community. So far my experience with timesharing was limited to attending Wyndham sales presentation couple years ago. I didn't buy anything there -- I don't remember a lot of details, but I went there with an attitude "they must be pushing some really bad deal if they're paying 100 bucks to people like me just to listen to it" . After the presentation I though I'd need to read more about it, and been going through forums for a while, and how have a couple questions.

As far as I understand, there are two totally different types of timeshares:

1. "Deed" system, where you actually own a time period in piece of property. You're guaranteed this period no matter what and it cannot be taken from you (as long as fees are paid). Was just curious what would happen if the property gets destroyed by a natural disaster, and the sales guy didn't have a reasonable response here. But, lacking this, it is yours to stay. There's an option to trade it in and get a week somewhere else, but this doesn't seem valuable to me because then why not just book somewhere else, shall be cheaper if all fees taken into account?

This scenario makes sense to me if one wants to go to a specific place during specific time for the next X years, and is sure about it. I do see the value here, as the alternative is too expensive (basically buy a property there and let it empty/rent it).

2. "Points" system or I forgot how they called it. Here you don't really own anything, you're just granted a right to book something from the list at a discounted rate. You are not guaranteed any availability anywhere, however, and the property may be sold out because someone (paying cash or higher than you in a point hierarchy) has booked it before you were allowed to book.

Now this scenario makes no sense to me, and I don't see value in this system. Is the value based solely on the fact that if you happen to book it, you'd pay less than if you'd tried to book the same property on expedia/hotwire using the rack rate? But then, who pays rack rates unless it's something like Rio Carnival week and I've shown up without a booking? Even the status hierarchy doesn't make much sense, because it creates an incentive for Wyndham to keep adding new, higher statuses - meaning the top "diamond" status you have today may give you everything, but tomorrow they add a "double diamond" pushing you back. Yes, the sales guy said Wyndham would never do this, but this was ridiculous - it's an open business opportunity, so Wyndham would be stupid not to raise money this way, unless I miss something.

Finally, in my case, is the conclusion right that no timeshare market makes sense to me? I travel very often (been to 100+ countries), but I generally grab last minute deals, an accommodation is acceptable to me as long as it has private bathroom and heating/air conditioning, and I can enumerate every single instance I had to pay more than $100/night for a hotel?

 

[Passepartout]

Hi, and Welcome to TUG! I won't get too windy here as what ever specific questions can be answered in the search window. I can't imagine any questions regarding timesharing that aren't well covered.

But a couple of points. Both dedicated weeks and 'points' can be deeded. Also in the mix are 'floating' weeks. Both points and floating weeks were devised b y developers because some time intervals have more value than others. One way to deal with the imbalance is, like you suggest to let them out for bid. Highest bid gets the 'best' week. Another way is to have a level playing field and let the first caller have the 'best' week. That's kind of how it works. Owners get to reserve a week at exactly a certain time from move-in. So as you can imagine, exactly one year from any Friday or Saturday, at midnight, those owners jam the phones or websites to reserve their time. Exchangers (those who own in a different system- and/or use an exchange, like RCI or II) get to pick from move-in dates a couple of months after owners.

There is a good chance that TS makes no sense for you. But if you like 'better' resort type accommodations. Usually condos with full kitchens and often laundry in the unit TS might make sense. But if last minute hotel accommodations for under $100/night fit your needs, keep doing what you are doing.

Again, Welcome.

Jim

 

[oldmimbler]

Another question, based on this thread:

> Keep in mind that Ed started us off with $277K for four weeks in a 2-bedroom at the Grand Luxxe

This makes no sense to me. I mean, in Puerto Vallarta you probably can outright *buy* a 2 bedroom for 277k USD (through a bank trust as foreigners can't buy directly, but still).

 

[DaveNV]

Welcome to Tug. Glad to have you here. You're on the right track with your research, but there are a few things to understand.

A Weeks ownership is a deeded timeshare that is generally sold in week-long increments. The timeshare development is divided up on paper by however many units are part of the timeshare. (Some resorts also have privately-owned units that are not in the timeshare.) They take those timeshare units, and divide each unit by 52 weeks, giving the total number of units that can be sold. For example, if there are ten timeshare units, divided by 52 weeks per year per unit, then there are 520 intervals that can be sold. They can never sell more than those 520 intervals, because that's all there is. You buy an interval, which will have a corresponding deed that describes the unit (or unit size, if floating), and the particular week (if it's a fixed week interval) or the floating period (where you can reserve your week's time during any of those weeks, depending on what isn't already reserved by someone else.) The advantage to a deeded ownership, as you've said, is that you are guaranteed your time there, in whatever form that ownership allows. (Fixed vs. floating weeks, fixed vs. floating units, Annual vs. Biennial weeks, are all topics you should research.)

Should you opt not to use your time at the resort during a particular year, you can deposit your time for that year only to an exchange company, (RCI and Interval international are the two biggest, but there are others.) You don't trade in the unit, just that year's usage time. You can then take an exchange to another resort for that one-time use only. Next cycle, you're back to your deeded ownership again. Fees and availability make exchanging its own topic of study. It can be rewarding, but also can be highly challenging to find something that is worth the costs involved.

A deeded Points ownership is created mostly by the above process, with the added step of the underlying week's time being converted to a certain number of points. With this type of ownership you may still be paying maintenance fees to the deeded resort, similar to the maintenance fees paid with a deeded Weeks ownership. Instead of staying for the deeded week, you can "spend" the points in as little as one-day's value at a time, either at that resort, or one of the other resorts in that points system, providing there is availability. Points are fine if you like shorter stays. The advantage is that points tend to last longer than the single year, so you can combined them for a longer stay someplace, if you wish.

Other Points systems are credits-only, without an underlying deed. The owner spends their points in the same fashion as above, and fees are divided up into costs charged by the company that owns the system. For example, I own WorldMark, which is credits only, without a deed, and they have 90-odd resorts I can book time into, as it's available. I can also exchange my credits with an exchange company if I want to stay at a resort outside the WorldMark system. It's a valuable option, depending on how a person wants to travel.

There is a lot of learning involved to find the right points ownership. I think they are not something to be stepped into initially for a novice. Learn about timesharing before buying anything. It is much easier to get into owning a timeshare than it is to get out of one, and you should never buy from the Developer. You can generally find the same exact thing on the resale market for pennies on the dollar.

Hope this helps a bit.

Dave

 

[oldmimbler]

But a couple of points. Both dedicated weeks and 'points' can be deeded. Also in the mix are 'floating' weeks. Both points and floating weeks were devised b y developers because some time intervals have more value than others. One way to deal with the imbalance is, like you suggest to let them out for bid. Highest bid gets the 'best' week. Another way is to have a level playing field and let the first caller have the 'best' week. That's kind of how it works. Owners get to reserve a week at exactly a certain time from move-in. So as you can imagine, exactly one year from any Friday or Saturday, at midnight, those owners jam the phones or websites to reserve their time. Exchangers (those who own in a different system- and/or use an exchange, like RCI or II) get to pick from move-in dates a couple of months after owners.

Thank you for response and for clarification Jim.

I understood how points work. What I don't understand is what is the advantage dealing with those points versus booking directly and pay cash? Is it because they cannot be booked directly for cash? Or because the price is significantly better with points?

 

[oldmimbler]

There is a lot of learning involved to find the right points ownership. I think they are not something to be stepped into initially for a novice. Learn about timesharing before buying anything.

Thank you for your response Dave. It does help. I'm just trying to see whether there is any system in which I can possibly save money at all. When Wyndham sales showed me their calculations, even there it all looked like I'd be spending more money, not less, even based on the maintenance fee alone.

 

[DaveNV]

What I don't understand is what is the advantage dealing with those points versus booking directly and pay cash? Is it because they cannot be booked directly for cash? Or because the price is significantly better with points?

Timeshares are not generally available to book for cash (with exceptions) as you might rent a hotel room. They are generally only reserved by Owners.

Thank you for your response Dave. It does help. I'm just trying to see whether there is any system in which I can possibly save money at all. When Wyndham sales showed me their calculations, even there it all looked like I'd be spending more money, not less, even based on the maintenance fee alone.

As to prices charged, between a Weeks ownership or a Points ownership, the fees you'd end up paying as an owner are about the same. If you bought a Weeks ownership for a two-bedroom unit at a resort that had an annual maintenance fee of $1500, for example, you might spend the same amount for a Points ownership with underlying deed that gave you enough to reserve the same two-bedroom unit. If it was a credits (points)-only ownership, the annual fees for an account with enough points to book a two-bedroom unit within that system might also come to around $1500. All of this is speculation, of course.

Generally the only way to save money is at the buy-in. If you buy on the resale market, you can save a lot (in some cases, thousands of dollars) by buying resale. But once you're an Owner, your ongoing costs of ownership are the same, no matter how you bought in. That $1500 example above would be paid exactly the same by someone who paid $30000 with a Developer, or someone who got the same ownership on eBay for $1.00. The ongoing costs of ownership are the same.

You'd asked about what happens if the resort is damaged. Generally the HOA managing the resort has insurance policies and reserve funds set aside from the maintenance fees paid by owners to cover the deductibles and such for repairs and upgrades to the resort. If you are a deeded owner at the resort, you could be liable for a share of extra expenses, based on what you own. In the case of my 520 intervals example above, you'd owe 1/520th share of the costs of the repairs not covered by those insurance policies and such. Those costs are charged to the owners as Special Assessments. A points-only ownership might not ever see such a thing, since the ownership does not have an underlying deed tying that owner to a specific resort. But costs are borne by everyone equally in those cases. Special Assessments are rare, but they do happen.

Dave

 

[travelhacker]

Thank you for your response Dave. It does help. I'm just trying to see whether there is any system in which I can possibly save money at all. When Wyndham sales showed me their calculations, even there it all looked like I'd be spending more money, not less, even based on the maintenance fee alone.

A lot depends on your travel style.

We have 3 kids. Since most higher end hotels cap occupancy at 4, I'm either looking at 2 rooms, an AirBNB / VRBO, or a timeshare. Timeshares when you buy resale and focus on ownership options that make sense for your situation can provide a lot of value.

For example, We'll be going to Florida for 4-5 weeks this summer. We will average around $100 per night after all expenses (maintenance fees, applicable resort fees, exchange fees, etc). The rack rate on where we are staying averages more than $600 per night (not including tax / resort fees).

Last year we went to Hawaii for 4 weeks, and averaged around $170 per night. One of the places we stayed for two weeks would have cost us about $1000 per night. The other would have been around $450 per night if we had booked directly.

It's enabled us to travel in ways that we would have never considered.

 

[DaveNV]

If you know the area you're interested in visiting, you may be able to rent a timeshare from an Owner (not from the resort) more easily and with fewer hassles than trying to rent available units from the resort itself. One advantage to this type of renting is you have no long-term commitment, and those Special Assessments would never be an issue for you. You rent the time, have your vacation, then walk away. Nothing could be more simple.

Compared to hotel travel, where virtually every room is a studio space with the bed right in the room with you, a timeshare will usually be larger, might have a bedroom or two separate from the living area, may have a kitchen and/or laundry, and might generally be a better vacation experience.

Dave

 

[easyrider]

First, hello everyone and thank you for having such a wonderful and informative community. So far my experience with timesharing was limited to attending Wyndham sales presentation couple years ago. I didn't buy anything there -- I don't remember a lot of details, but I went there with an attitude "they must be pushing some really bad deal if they're paying 100 bucks to people like me just to listen to it" . After the presentation I though I'd need to read more about it, and been going through forums for a while, and how have a couple questions.

As far as I understand, there are two totally different types of timeshares:

1. "Deed" system, where you actually own a time period in piece of property. You're guaranteed this period no matter what and it cannot be taken from you (as long as fees are paid). Was just curious what would happen if the property gets destroyed by a natural disaster, and the sales guy didn't have a reasonable response here. But, lacking this, it is yours to stay. There's an option to trade it in and get a week somewhere else, but this doesn't seem valuable to me because then why not just book somewhere else, shall be cheaper if all fees taken into account?

This scenario makes sense to me if one wants to go to a specific place during specific time for the next X years, and is sure about it. I do see the value here, as the alternative is too expensive (basically buy a property there and let it empty/rent it).

2. "Points" system or I forgot how they called it. Here you don't really own anything, you're just granted a right to book something from the list at a discounted rate. You are not guaranteed any availability anywhere, however, and the property may be sold out because someone (paying cash or higher than you in a point hierarchy) has booked it before you were allowed to book.

Now this scenario makes no sense to me, and I don't see value in this system. Is the value based solely on the fact that if you happen to book it, you'd pay less than if you'd tried to book the same property on expedia/hotwire using the rack rate? But then, who pays rack rates unless it's something like Rio Carnival week and I've shown up without a booking? Even the status hierarchy doesn't make much sense, because it creates an incentive for Wyndham to keep adding new, higher statuses - meaning the top "diamond" status you have today may give you everything, but tomorrow they add a "double diamond" pushing you back. Yes, the sales guy said Wyndham would never do this, but this was ridiculous - it's an open business opportunity, so Wyndham would be stupid not to raise money this way, unless I miss something.

Finally, in my case, is the conclusion right that no timeshare market makes sense to me? I travel very often (been to 100+ countries), but I generally grab last minute deals, an accommodation is acceptable to me as long as it has private bathroom and heating/air conditioning, and I can enumerate every single instance I had to pay more than $100/night for a hotel?

Too me, one of the most important things to consider when buying a time share is the exit of ownership. Many time shares are difficult to be rid of. I like "right to use" club type memberships and memberships that are not hard to sell. These types of memberships allow use of many properties without having to exchange and do exchange well for the most part.

In the scenario of special assessments , especially for property damage which most of is covered by insurance, club memberships spread the cost to all members by increasing the yearly maintenance fee.

Bill

 

[oldmimbler]

Thank you everyone. So the numbers look similar to what I've seen on presentation, and the conclusion is that if/once I decide to try higher end accommodations, I should look at timeshare.

Right now I don't think I've ever paid 1500/week to stay anywhere in the world, but them I'm a kind of person who is satisfied with Motel6 and I generally stay away from resort type of accommodation as they tend to be away from the city.

Can you rent a timeshare (for points or from owner) for 1-2 days instead of one week? I've never stayed for one week in a single place when traveling except than on business.

 

[DaveNV]

Thank you everyone. So the numbers look similar to what I've seen on presentation, and the conclusion is that if/once I decide to try higher end accommodations, I should look at timeshare.

Right now I don't think I've ever paid 1500/week to stay anywhere in the world, but them I'm a kind of person who is satisfied with Motel6 and I generally stay away from resort type of accommodation as they tend to be away from the city.

Can you rent a timeshare (for points or from owner) for 1-2 days instead of one week? I've never stayed for one week in a single place when traveling except than on business.

If you do it right, a timeshare can give you resort-type accommodations at Motel6 prices. (Have you priced out Motel6 lately?) Keep in mind, my $1500 price model was for a week in a two-bedroom unit at a mid- to upper-end resort. At Motel6, you're sleeping in the living room, and if there are two beds, the other people are right next to you. With a timeshare, there are separate bedrooms - like in an apartment or condo. It's a very different way of vacationing. I can promise you, once you've spent time in a decent timeshare, there is no going back to hotel rooms.

Yes, you can rent for a day or two, if that is what you need. Points-based accounts let you book as many nights as you have points for, if that's what you want. I think regular owners who rent out their time would prefer to rent you the full week, but a lot of "megarenters" (owners who own huge accounts and make a business of renting out units) will rent for a day or two at a time. But the price to do it that way tends to be higher, on average, because things get cheaper the longer you stay someplace. (It's about housekeeping fees, which add to the daily rate paid to stay someplace.)

If you're of a mind that Motel 6 is what you want, then timesharing may not be for you. It's intended for those who want more luxurious accommodations and space. It certainly does make for a more relaxing vacation. My suggestion would be to rent a timeshare in a town you want to visit, take that vacation, and assess how it makes you feel. Then turn around and rent a Motel6 in the same area, and see what that feels like. Then compare the prices you paid for each one. The answers may surprise you.

Dave

 

[Passepartout]

Can you rent a timeshare (for points or from owner) for 1-2 days instead of one week? I've never stayed for one week in a single place when traveling except than on business.

You can. But just the points variety. And then, there's usually a premium charged for an additional cleaning. Timeshares are based on each occupant staying for a week, so shorter stays equals having housekeeping do more cleaning for the next guest.

One TS perk that might interest you is the RCI 'Last Calls' which are deeply discounted cash rentals that come up at 45 days before move-in for in the range of $300 cash, no points and no ownership required (just an RCI membership). These are unbooked 'leftovers' usually in overbuilt places (Orlando, Williamsburg, Las Vegas, Branson, etc) often in 2nd tier resorts or places that want to give bodies to the salesweasels to try to make owners. They can be ski resorts in 'mud' season, beach resorts in Winter, or units with parking lot or dumpster views. DO) NOT expect Disney in Summer or other holiday weeks. Not gonna happen, but from your description of your travel preferences, you might find value there.

Of course the catch is that you have to own a TS to join RCI. Nothing keeps you from selling it and keeping the membership as long as you pay the roughly $120/yr membership fee.

Jim

 

[tschwa2]

Timeshares work best for
1. people who like to travel to places with an abundance of timeshares, like Orlando, Branson, Williamsburg, Vegas, Massanutten and a few others or off season in locations with a lot more timeshares than demand during those off season periods
2. people who can plan early -typically 8 months, 10 months or 12+ months depending on the system
3. people who are super flexible with their travel and not the type of flexibility that is normal in the normal travel world.
Someone in April saying I can go anywhere within a 5 hr drive to a beach in a x size unit in mid June through early August and it doesn't have to be ocean front it can be within a block or two (easy walking distance) is not planning early or being flexible.

Timeshares don't typically work for people wanting multiple short stays over weekends (some systems are better than other for these but even those often require higher status (more retail purchases) in order to avoid extra fees associated with multiple short stays. Friday and Saturdays are often nearly twice as expensive as mid week nights in most timeshare systems.

You can certainly get lucky renting from someone that has what you want and is looking to move that inventory at or below their costs, especially if they happen to have expiring points. On the other hand there are some locations that were sold in weeks only and although an owner may be able to split the week, there could be additional housekeeping fees involved or the owner simply may rather rent it out as a full week only.

 

[easyrider]

With my points memberships I can reserve any amount of days I want depending on availability and membership. Each have system has their own reservation guidelines. We use the nightly reservation for traveling to a destination by car by using bonus time in a couple of resort systems. With VI there is the ability to reserve a single night at 1 year out using points and paying a $20 booking fee. This works well for holidays where we only want to do a couple of nights. Both Worldmark and VI are a great value using bonus time for single nights.

I like memberships in multi-resort systems that I have the ability to drive to. This makes it easier to grab bonus time or take friends and family for quick inexpensive trips. Our Mexico memberships allows us to split weeks at five of their opulent beach locations.

Bill

 

[oldmimbler]

One TS perk that might interest you is the RCI 'Last Calls' which are deeply discounted cash rentals that come up at 45 days before move-in for in the range of $300 cash, no points and no ownership required (just an RCI membership). These are unbooked 'leftovers' usually in overbuilt places (Orlando, Williamsburg, Las Vegas, Branson, etc) often in 2nd tier resorts or places that want to give bodies to the salesweasels to try to make owners.

That may be interesting, thank you. Is there a way to see what they have, where, and at which prices before joining RCI just to see if it's worth it? The $120 fee alone is equal to 2-4 night stay in places I'm staying.

 

[oldmimbler]

I like memberships in multi-resort systems that I have the ability to drive to. This makes it easier to grab bonus time or take friends and family for quick inexpensive trips. Our Mexico memberships allows us to split weeks at five of their opulent beach locations.

How big is their network in Mexico, do they have anything outside Baja Sur/Puerto Vallarta/Mazatlan/Quintana Roo? I spoke to a timeshare girl in Cancun airport, but all the locations the showed me were on a beach. I do travel to Mexico several times a year, but I never go to beach, not my cup of tea.

 

[oldmimbler]

Timeshares work best for

The goal was to understand what "work best" means as the restrictions are quite significant.

 

[oldmimbler]

If you do it right, a timeshare can give you resort-type accommodations at Motel6 prices. (Have you priced out Motel6 lately?)

Yep, it goes up. Paid $89 for a room next to San Diego downtown during the last Christmas week.

If you're of a mind that Motel 6 is what you want, then timesharing may not be for you. It's intended for those who want more luxurious accommodations and space. It certainly does make for a more relaxing vacation. My suggestion would be to rent a timeshare in a town you want to visit, take that vacation, and assess how it makes you feel. Then turn around and rent a Motel6 in the same area, and see what that feels like. Then compare the prices you paid for each one. The answers may surprise you.

Might do it. Another issue is that resorts are generally built away from the cities while I generally prefer to be close to downtown/public transport (not in US of course except LV/SF and some East Coast, but I don't really vacation domestically).

 

[DaveNV]

Another issue is that resorts are generally built away from the cities while I generally prefer to be close to downtown/public transport (not in US of course except LV/SF and some East Coast, but I don't really vacation domestically).

While there are some timeshares in inner city locations, most, as you say, are on the outskirts of towns, where space is available and amenities can be constructed. The timeshare business model is "more vacation bang for the buck." If you "don't really vacation domestically," and you are content with a Motel 6 type-room in a downtown urban area, then you may have answered your own questions.

I'd say timeshare ownership is not for you. Save your money and enjoy your travels.

Dave

 

[Passepartout]

That may be interesting, thank you. Is there a way to see what they have, where, and at which prices before joining RCI just to see if it's worth it? The $120 fee alone is equal to 2-4 night stay in places I'm staying.

No, you can't see Last Calls without RCI membership. The inventory changes so fast as move-in is within 45 days. I might also add that while the $300ish rate is for 7 nights, and you can use any portion of those 7 nights for a shorter stay, it doesn't work well for long weekends because move-in is usually on Fri/Sat.

From your comments/questions, I will go out on a limb here and say that TS is probably not for you. Keep doing what works for you as far as travel.

 

[easyrider]

How big is their network in Mexico, do they have anything outside Baja Sur/Puerto Vallarta/Mazatlan/Quintana Roo? I spoke to a timeshare girl in Cancun airport, but all the locations the showed me were on a beach. I do travel to Mexico several times a year, but I never go to beach, not my cup of tea.

Cabo, Puerto Vallarta, Cancun and Nuevo Vallarta with UVC which is a Mexican company with opulent resorts. Zijantenjeo, Rosarito, San Jose del Cabo and Isla Mujeres with Worldmark are mid level resorts. Mazatlan and Puerto Vallarta with VI are mid-level resorts. All of these are on or very near the beach.

Bill

 

[oldmimbler]

Thank you everyone for your comments and feedback, which is greatly appreciated!