Financing a timeshare.

[jimf41]

I’ve been a TUG member for a little over a year now and I’ve learned a lot of information on the in’s and out’s of timesharing. One topic that repeatedly pops up is the subject of financing. It seems to me that there is a train of thought here , on the Marriott forum at least, that seems to say that financing a timeshare is a bad deal and should be avoided at all costs.

I don’t know where this idea came from but to me it’s ridiculous. There are two issues here, he decision to buy and the choice of payment.

DECISION TO BUY
This is an individual choice based on your vacation preferences and the type of vacations and amenities you like. I have friends that would not enjoy timesharing at all. They prefer small off the beaten path locations not associated with a cookie cutter resort chain. MVCI locations just wouldn’t fill their needs and wouldn’t make sense. Other friends have enjoyed it so much that they purchased after visiting our timeshare. Both like to vacation but differ only on the type of experience.

HOW TO PAY
I suppose there are some of you out there that have $50,000 to $ 100,00 lying around that you can tap to make a $30,000 plus purchase cash. I just bought a $38,000 TS and I financed it. I also have sufficient funds in accessible investments to cover that purchase. So why did I finance? Well first of all my investments are making about 9% right now and I can borrow the money for 6.125%. If I take the advice to pay cash I lose about 3% on my money. Not to mention all the points I got putting that purchase on my CC and earning 5 points per $1. With a little careful timing I got the use of $38,000 free for about two months. I think the $120,000 price tag on that Marco Island penthouse on New Year’s week is the most insane idea Marriott has ever tried to sell. But if I went off the deep end and decided I just had to have it you better believe I would be financing it.

My son on the other hand is just starting out. New house, new bride, both have decent jobs with a good future and two small children. He’s been to our TS’s with us and now he’s getting the idea to buy one of his own. Now he financed his house, two cars and he and his bride are paying off their financed educations. In a few years he’ll be able to seriously consider a TS purchase. Why would he not finance? He certainly won’t have the cash lying around. He financed his cars and TS’s are more expensive than cars when you decide to go Marriott. He could wait and save the money for the purchase but that would require several years of savings with no vacations. Every other major purchase he made he financed, as do most folks I know. Why would he treat a TS purchase any differently? In ten years the cars he financed will be worthless. A 2bdr PLAT OF at MPB cost about $14,000 ten years ago. Today it's worth over $25,000 and thats resale. I don't think the folks who bought with financing in 1998 would agree that financing was a bad idea. I sure wish I was one of them.

The argument put forth by many stresses the huge loss you will take when you go to resell. I don’t find that this holds any water at all except for those who are purchasing a TS for financial investment with the intent to make a profit. To the three of you in the entire TS community who purchased for this reason I would advise you to sell now. Your first loss is generally your best loss. Would anyone advise their children not to finance a house because they might get divorced and have to sell at a loss?

I’m not going to open Pandora’s box by discussing ROFR, resale vrs developer, Marriott vrs non Marriott, MRP’ as a purchase incentive as these issue’s each have their own proponents. The point is that once you make the independent decision to buy a TS, the decision to finance it or not should be the same as any other major purchase. Shop around, get the best rate for the lowest cost and enjoy your purchase.

 

[pwrshift]

I'm in the camp that you shouldn't finance a depreciating asset, or a vacation. In most cases, buying a timeshare direct is gonna cost you 40% the moment you walk out the door. But you have to do what works for you.

I'm more interested in how you averaged 9% growth in your stocks this year.

Brian

 

[sdtugger]

Rent

$38,000 even at 6.125% interest is $2,327,50 per year in interest alone. Add to that $1200 per year in annual maintenance fees and you are paying $3,527.50 per year out of pocket costs for that timeshare. Show me a timeshare purchased retail for $38,000 that rents for more than $3,527.50 per week. You could probably rent and pocket a significant difference in price AND you'd avoid being tied down to the same resort and being subject to the annual increases in maintenance fees. You get all of the vacation with less cost and no strings attached.

You are also very lucky to finance at 6.125%. I'm assuming that is a home equity loan. Many will not be able to get that rate and will pay more like 13.49% for the privilege of financing their purchase from Marriott. These poor saps get to spend $5,126.20 in interest alone for their week. Add the maintenance fees and they are paying $6326.20 for one week! Yikes. Would you really advise your son to finance in those circumstances. He could rent 2.5 weeks or more for the same dollars and avoid being tied to the week.

I'll leave to others the wisdom of using the equity in your home to finance a purchase like a timeshare. But, that may be largely a hypothetical question in today's real estate market. I'll also leave alone the topic of 9% investments versus financing a timeshare other than to say you are doing very well if you are making 9% since November 2007.

 

[MOXJO7282]

Why not play the 0% credit card game? That's how I got into the TS business when back in 2002. When rates are low those offers were prevalent. Even if its for just 12 months, you can save several hundred dollars or more over the course of time. And if you know what you are doing, you can keep that going indefinitely. I've been doing it to some degree for 6 years. I've saved literally $1000s of dollars doing this.

Regards.
Joe

 

[AwayWeGo]

E-Z Payment Plans -- My Kind & The Credit Card Company's Kind.

financing a timeshare is a bad deal and should be avoided at all costs.

If I can't buy a timeshare unless I arrange E-Z payments with the bank or the credit union or a loan company, then I can't afford a timeshare. Period.

Ditto all other consumer purchases.

To buy a principal residence (home, townhouse, condo), OK -- I'll take out a mortgage.

For anything else, I make a bunch of monthly payments into a bank or credit union savings account & after a while when the balance I've saved up is enough to buy the timeshare or car or TV set or what have you, then I'll use the savings balance for that. That's my kind of E-Z payment plan.

The disadvantage of doing it that way is being unable to satisfy my craving for instant gratification. You know, enjoy now & pay later because I want what I want when I want it. Now -- not later.

The advantage of doing it that way is that the interest payments involved are money coming in & being added to my account instead of money going out that I have to pay to the credit card company or the bank or the auto finance agency or the timeshare company. That is, I get more stuff for less money.

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

 

[jimf41]

Brian
RIM is in your neck of the woods. It's pretty low right now at about $115 a share. But my USAA account has returned actually much better than 9% since I started. It's down right now but this is the BUY LOW time in the BUY LOW/ SELL HIGH equation.

sdtugger
Again USAA is charging 6.125 right now on an equity loan but I expect that to drop a little more. Wachovia will offer you about 5.5% on a refinance right now and they are great to deal with. I bought the MFC Pres week for 37,500. Redweek has two listed for rent in 2009 at $3500 and $5000 respectively. I probably will never rent any of my units so I don't really have any idea of the actual renting price.

Joe,
You live right around the corner from me. I'm in Stony Brook. Thanks for the tip. I was going to use my equity to pay for it but I've received at least 5 offers for balance transfers from 0 to 3%. I'll look into those starting tomorrow.

AwayWeGo
OK nothing wrong with saving and then buying. But that isn't the question. There is nothing special about a timeshare that makes it a bad deal to finance. It's just another big ticket item. Lots of big ticket items depreciate in value. Depreciation is not a reason to eliminate a TS purchase from financing. And if you do it right the government is your partner for about 1/3 of that interest.

 

[Steamboat Bill]

I’ve been a TUG member for a little over a year now and I’ve learned a lot of information on the in’s and out’s of timesharing. One topic that repeatedly pops up is the subject of financing. It seems to me that there is a train of thought here , on the Marriott forum at least, that seems to say that financing a timeshare is a bad deal and should be avoided at all costs.

Perhaps this opinion is based upon two factors we see repeated almost every day

1. Someone buys a timeshare from a developer that can be resold for only 50% of what they paid for it last week (excluding DVC)

2. The interest rate they paid is $13% or more (includes DVC)

However, if YOU are able to buy a timeshare from Disney (or certain Marriott's) from the developer and finance it at 6%, then I have no problem with that. This may alos apply to other developers (but I am not an expert on them).

I too have USAA for all my insurance needs and LOVE them.

 

[lprstn]

I'd say if I was in your son's position, I would buy a much CHEAPER TS and pay cash for it. The Marriott is nice, but there are other nicer, cheaper resorts you can purchase resale of pennies on the dollar. Heck, if he bought Wyndam, Blue Green, RCI points he could trade one of his vacations for a week at yours and you all would have the best of both worlds. His just wouldn't cost 38K.

 

[CapriciousC]

We financed our Waiohai week when we bought it, but through our bank (Wells Fargo) and not Marriott. The interest rate Marriott was charging was ridiculous, and our credit scores are well over 750, so the points weren't worth it, to us. (DH travels several times a month for work and stays in Marriotts whenever possible, so accumulating points usually isn't much of a problem for us).

We could have paid for it outright had we liquidated some investments, but we did a home equity line and were able to write off the interest on our tax return. We paid it off in about 18 months.

We're thinking of buying a second week, but this time we plan to pay for it outright.

 

[luv2vacation]

$38,000 even at 6.125% interest is $2,327,50 per year in interest alone. Add to that $1200 per year in annual maintenance fees and you are paying $3,527.50 per year out of pocket costs for that timeshare. Show me a timeshare purchased retail for $38,000 that rents for more than $3,527.50 per week. You could probably rent and pocket a significant difference in price AND you'd avoid being tied down to the same resort and being subject to the annual increases in maintenance fees. You get all of the vacation with less cost and no strings attached.

You are also very lucky to finance at 6.125%. I'm assuming that is a home equity loan. Many will not be able to get that rate and will pay more like 13.49% for the privilege of financing their purchase from Marriott. These poor saps get to spend $5,126.20 in interest alone for their week. Add the maintenance fees and they are paying $6326.20 for one week! Yikes. Would you really advise your son to finance in those circumstances. He could rent 2.5 weeks or more for the same dollars and avoid being tied to the week.

I'll leave to others the wisdom of using the equity in your home to finance a purchase like a timeshare. But, that may be largely a hypothetical question in today's real estate market. I'll also leave alone the topic of 9% investments versus financing a timeshare other than to say you are doing very well if you are making 9% since November 2007.

Okay, you're saying that every year it will cost $2,327,50 + MF but, what many of these thoughts seem to be overlooking is, if I keep my $38,000 TS for 20 years, then I can take the $6982.50 (2327.5 x 3) and divide it by 20 years. Now my interest payment each year is only $350 (app.). Even with $1200 MF, that's $1550 per year. To me, for the week that I'm looking at, that is worth it to know that I don't have to look (or negotiate for) a rental every year. And that come retirement, if I'm so lucky to live that long, the only cost each year will be MF. (I know that will go up but so will rental costs.) (I also realize that we're not factoring in principal here.)

The reason I use x3 is because I never take a loan out for more than a 3-year term. Unless a promotional rate requires me to take longer, and then I pay extra each month in order to pay it off within that 3 year term. I have done this many times to buy TS and cars since buying my first new car when I was 22. I ALWAYS shop around for the best rates, often use home equity loans for the tax advantages, and NEVER have more than one of these loans outstanding at a time.

The reason I do this - I know what I can afford each month, Hubby and I LOVE to travel, I don't have $30,000 or more laying around, and we need a reliable car (not only for travel but to get back and forth to work) and want a nice place to travel to NOW. It's not so much instant gratification as the fact that we work very hard and we feel that we very much DESERVE the 4 weeks of vacation that we take each year. (Also, it allowed us to take our children to a lot of nice places as they were growing up that we never could've afforded otherwise.) Some might say, "Why not save the money for 3 years and then buy it." And then save again for 3 years, etc. Because you never know if you'll even be here in 3 years. I lost my maternal grandfather at age 55 to lung cancer, my paternal grandmother at age 59, also to cancer. My dearest aunt had only just turned 56 when she died from pancreatic cancer. My beloved mother, who had only just retired from her job the year before, was diagnosed with lymphoma. She fought valiantly for almost 2 years before we lost her in May 2006. She was only 64 when she passed away. And then the biggest SUCCESS story - my only sister, a 2-time ovarian cancer SURVIVOR who was first diagnosed stage 3 at 36 years old - but who lives EVERY day with the threat of recurrence (not to mention all the time she lost to the horrible treatments). These are the reasons that, as long as it doesn't "break the bank", certain "luxury" items we allow ourselves NOW.

So those of you who say that you should never finance a depreciating asset or a vacation, I disagree. If you do your research and it's worth it TO YOU, then go for it. All the money in the world could not replace the many, MANY wonderful memories I got from vacationing with my (entire) family.

BTW, some of you may say, "Buy a cheaper TS" or buy a cheaper car. I LIKE Marriott and that's where I like to stay and we drive to most places so we like the luxury & size of a nice SUV (although it was a minivan while the kids were between 5 and 15).

 

[pwrshift]

Jim ... in the stock market, timing is everything and I've been fortunate enough to average out a good return over the last 20 years or so. But I surely wouldn't put all my portfolio in RIM .. but I recently sold it all at $113 and made a very nice gain, but sold with the belief that dramatic growth like that is over for that stock in such a competitive high-tech market. Same for Google, which I got in below $100 shortly after the IPO and got out around $550 while watching it climb even higher ... but today I sleep at nights.

Last year, some 80% of our best mutual fund brains lost money -- and still charged unit holders their MER! So getting a 9% return on your whole estate/portfolio over the last year was a tough one for novices as so many people wanting to protect their portfolio invested in 'banks' or in commodity rich Canada. The buy low/sell high formula is a road full of potholes - and do you really (really) feel we're at the bottom right now?

Timeshare 'investing' is quite different IMO, even though I wouldn't borrow money at 6% to invest in the stock market either. However, I did buy a new Malibu in December for a long-time friend at 0% interest for 5 years ... your interest rates in USA must be a lot higher than Canada. JMHO.

Brian

Brian
RIM is in your neck of the woods. It's pretty low right now at about $115 a share. But my USAA account has returned actually much better than 9% since I started. It's down right now but this is the BUY LOW time in the BUY LOW/ SELL HIGH equation.
.

 

[m61376]

I'll add my 2 cents here, for what it's worth....I think that the adage: "don't buy if you need to finance" is more of a precaution to people who are likely to be plunging in over their heads. If you have the discretionary income but it is invested elsewhere and can borrow either from 0% credit cards in the interim for the short term because it makes financial sense to do so, or use a HELOC for the same reason, that's one thing. That is different from those purchasers who really cannot afford to buy the timeshare but really want to, so are willing to pay near usurious interest rates (either Marriott's or, even worse, monthly credit card charges once those teaser low rates expire).

I don't think you can compare buying a timeshare to purchasing a house or even cars. And, yes, there are many people who choose to finance just about everything, making credit card companies very happy. However, I agree with the posters that feel that, while immediate gratification is of course attractive, it can be a dangerous path.

 

[sdtugger]

Brian
sdtugger
I bought the MFC Pres week for 37,500. Redweek has two listed for rent in 2009 at $3500 and $5000 respectively. I probably will never rent any of my units so I don't really have any idea of the actual renting price.

I just checked redweek for MFC and there are dozens of weeks with asking rental prices lower than $3700 and some are significantly lower than $3700. There are also a handful of weeks renting for more than $3700 and some of those are asking significantly more than $3700. But, virtually all of the higher priced rentals are for very high demand holiday weeks. Would your $37,500 week even let you reserve those weeks and their associated views? In addition, some of those asking prices are a joke. The owners probably listened to a slick Marriott salesman who promisted they could rent their units for $7K.

I maintain that if you don't have the cash, then you are financially better off to rent compared to financing, particularly using Marriott financing which many do.

I've played the credit card and other financing games too. But, you don't have to include a timeshare to play those games. If you just want the arbitrage, you can borrow the 0% credit card money and put it in the bank and earn interest for a year, etc. In other words, what to do with cheap financing is a separate question than whether you should finance a timeshare. But, I'll agree that if you can finance at a low enough rate, there is a point where financing can make sense as long as you aren't risking your home, etc. in the process.

 

[jerseyfinn]

Jim,

You make some very nice observations.

Timeshare is mostly a shoe that can fit all sizes. Having said that, let me also say that sometimes the glass slipper that will never fit. This appears contradictory, but it simply means that lots of folks can find many different ways to enjoy TS, but some folks are indeed not suited for TS. In my book, the most fundamental question to ask yourself is whether you are truely committed to the idea of destination travel. If you can answer "yes" to this question, then proceed to the next step.

I myself use this destination travel concept to frame out whatever TS purchase decision we make. Developer versus resale is more a function of your ownership goals and your own relative view of the world. In general, it's best to avoid Marriott financing if you can get your hands on a home equity line and act as your own bank. That said, we've also done deals with Marriott when they've had promo rates which are better or equal to our home equity line. ( hint: always try to plink down as much of a downpayment as you can onto your Marriott VISA when you purchase. Take the 3:1 or 5:1 points and then turn it over to your equity line. We've even put the full purchase price on the VISA before running home to draw the equity line check ).

The argument put forth by many stresses the huge loss you will take when you go to resell. I don’t find that this holds any water at all except for those who are purchasing a TS for financial investment with the intent to make a profit.

I agree with you. Anyone pondering a developer purchase should understand that should they elect to sell their week, Marriott will offer 60% of the current selling price ( which IMO is a better deal than most of us could get for our cars ). If you sell privately, you might realilze 65% to 70% of current selling price.

So why purchase timeshare?

Back to my starting point. Destination travel.

But there is also more to this equation. If you are going to purchase TS, be prepared to make a long term ownership commitment to destination travel. I don't use especially complicated math here, but simply add up the cost of your annual MFs and divide by the years of ownership in which you occupied at your home resort, or traded to another resort. Here's your raw cost to own. When/if you decide to sell your weeks, you should be able to receive 60% of current selling price on you platinum/gold weeks ( silver is a gray area which varies by resort ).

Bottom line is this.

You take what you can sell your week for and compare it to your purchase price. If it is less than you paid, add this cost to your net MFs and divide it by the number of years you used the week. Here's your cost to own & enjoy your TS week over the years. If you sell your week at a profit to what you paid, you subtract this profit from your net MF costs and end up with a still lower number. In either case, what you paid for those years of ownership and use will be significantly less than what it would have cost you to pay the Marriott.com rate for the same villa and same vacation. And let's be honest here. None of us would have traveled so regularly and frequently to top destinations if we had to plop down the $480 a night that Marriott asks at a winter resort such as Ocean Pointe . . . and yet as an owner, you are there year after year.

My point is that TS purchased with the goal of destination travel can work for almost anyone in terms of producting destination travel at a better relative value . . . with or without selling your week at profit. Admittedly, my view is a relative view which does not worry about cost versus lost investment opportunity. It is however consistent with my goals of ownership and my outlook on life ( remember, I said MVC can be a shoe which fits all ).

For those whom the glass slipper does not fit. Well, TS is not for everyone. But . . . the beauty of MVC is that a wide array of individuals can indeed craft their own destination travel portfolio and enjoy using it for years and years and they will indeed get value out of their ownership ( MVC and TS are like horsehoes and hand grenades . . . you need only be close to the target to score ). Whether you do this developer or resale is up to you.

I would emphasize that if you're "profit sensitive" you are best served purchasing predeveloper or early in a new resort's life so that you have a better shot at hitting a positive price multiple. But even a late developer or a resale purchase can yield value provided you purchase and use the week for several years.

That's my take on it anyhow so put me down as a satisfied MVC owner doing his own thing.

Barry

 

[Steamboat Bill]

your interest rates in USA must be a lot higher than Canada.

Great...another reason to hate Canada.

Robin Williams sang South park's: Bigger, Longer, Uncut Original Soundtrack "Blame Canada" (nominated for best original soundtrack academy award 2000)
http://www.youtube.com/watch?v=DjoNucs20Vw

directly from the movie South Park - M.A.C (mothers against Canada) making there plan against Canada
http://www.youtube.com/watch?v=ds07XDaKhC4

 

[Bill4728]

One interesting way to finance a TS which I kind of like is to buy resale and take over the payments of someone else.

You see this all the time with WM accounts. They sell the TS for $1 but you must take over the payments of the TS loan. Most of the time you don't get a good deal on the purchase price (~$1/pt vs ~$0.70/pt) but for someone who really wants a WM TS they get in with no money down and save about 50% over buying from the developer.

 

[Steamboat Bill]

One interesting way to finance a TS which I kind of like is to buy resale and take over the payments of someone else.

You see this all the time with WM accounts. They sell the TS for $1 but you must take over the payments of the TS loan. Most of the time you don't get a good deal on the purchase price (~$1/pt vs ~$0.70/pt) but for someone who really wants a WM TS they get in with no money down and save about 50% over buying from the developer.

But you may be stuck with 13% rates or more.

 

[MULTIZ321]

One interesting way to finance a TS which I kind of like is to buy resale and take over the payments of someone else.

You see this all the time with WM accounts. They sell the TS for $1 but you must take over the payments of the TS loan. Most of the time you don't get a good deal on the purchase price (~$1/pt vs ~$0.70/pt) but for someone who really wants a WM TS they get in with no money down and save about 50% over buying from the developer.

Bill,

What are the transfer fees to do this and get the account in your name?


Thanks

Richard

 

[Dave M]

For Marriott, the transfer fee is $25.

 

[Bill4728]

Quote:
Originally Posted by Bill4728
One interesting way to finance a TS which I kind of like is to buy resale and take over the payments of someone else.

You see this all the time with WM accounts. They sell the TS for $1 but you must take over the payments of the TS loan. Most of the time you don't get a good deal on the purchase price (~$1/pt vs ~$0.70/pt) but for someone who really wants a WM TS they get in with no money down and save about 50% over buying from the developer.

Bill,

What are the transfer fees to do this and get the account in your name?


Thanks

Richard

I believe thay are the same as any transfer within WM.

 

[MULTIZ321]

I believe thay are the same as any transfer within WM.

Bill,

I'm not a WoldMark member, so I don't know what their transfer fees are.


Richard

 

[Beverley]

These are the reasons that, as long as it doesn't "break the bank", certain "luxury" items we allow ourselves NOW.

So those of you who say that you should never finance a depreciating asset or a vacation, I disagree. If you do your research and it's worth it TO YOU, then go for it. All the money in the world could not replace the many, MANY wonderful memories I got from vacationing with my (entire) family.

BTW, some of you may say, "Buy a cheaper TS" or buy a cheaper car. I LIKE Marriott and that's where I like to stay and we drive to most places so we like the luxury & size of a nice SUV (although it was a minivan while the kids were between 5 and 15).

I am with you! We have financed a few and paid for a few. We are very happy with the vacations and the family time we have had with the type of vacationing that timesharing allows. Hotel rooms do not connect family and friends the way t/s do. Life is too short. I've always felt that but have also learned it the hard way too.

As long as the purchase is not putting you over the top and can be managed well, financing to me is very acceptable. I frankly do not want to use my funds if I can use someone elses at a reasonable rate. We financed a car at 3%. Our investments get more than that. Even a CD these days can pull 4 to 4.5 %.

Beverley

 

[Lawlar]

Old Values

My son on the other hand is just starting out. New house, new bride, both have decent jobs with a good future and two small children. He’s been to our TS’s with us and now he’s getting the idea to buy one of his own. Now he financed his house, two cars and he and his bride are paying off their financed educations. In a few years he’ll be able to seriously consider a TS purchase. Why would he not finance? He certainly won’t have the cash lying around. He financed his cars and TS’s are more expensive than cars when you decide to go Marriott. He could wait and save the money for the purchase but that would require several years of savings with no vacations. Every other major purchase he made he financed, as do most folks I know.

Whatever happened to the traditional values of saving for the future and keeping debt to a minimum? The savings rate in America is zero. Many Americans are relying on Social Security and the equity in their homes to take care of them. No one seems to worry about the future. That is a big reason so few Americans have any true savings and why our economy is suffering.

My grandmother went through the depression and, fortunately, she taught me to save and invest.
Frankly, I want to teach my grandkid that its important to save and invest for the future.

Rather than encourage a newly married child to finance a timeshare I would start by teaching him to invest as much as possible in a good retirement plan and to pay his mortgage at a rate so that its paid off in 15 years.
We have gone to Maui once or twice a year for 25 years. We paid around $200 a night for nice hotel rooms on Kaanapali Beach (depending on various deals that were offered). We really loved those trips.

Unfortunately, I did something last summer that was really out of character and rather stupid. I bought a MOC TS for an outrageous amount of money. Yes, it is nice to have an ocean view and a full kitchen (we cooked our own eggs and ate cereal – but we still ate out at night and went once to Sheraton’s brunch, which is not to be missed).

So what am I paying for this new way of vacationing? $2,000 a year in maintenance fees – which is more than what we paid to rent a really nice hotel room. I am also paying $650 a month on the loan after making a down payment of $10,000.

Would I recommend that my grandkid (or any child) do this? Heck no (unless I hated the kid).

That $10,000 down payment and the $650 a month should have been put in an investment for our retirement. It would have grown to a nice nest egg to add to our support. Alternatively, If we had invested that $10,000 and $650 a month (plus the maintenance fees) in a college fund for our grandkid (age 8), it would undoubtedly provide him with a very nice education.

Sorry, but buying a TS is pure folly and is not a legacy to leave to one’s children. I would urge anyone thinking of buying a MVC timeshare to give a lot of thought about what can be done with that money. Why waste it on an asset that will depreciate faster than you can enjoy it and that will generate maintenance fees that increase at several times the rate of inflation. The only one to profit from financing a timeshare is Marriott - and the prices they charge reflects unbelievable greed.

 

[lapdawg]

Even if you can make 9% onyour investment, you will still have to pay 15% capital gains tax, reducing your yield to around 7.6%.

Assuming you can average 9% you're only talking about a net yield of around $500/year.

 

[Beverley]

While MOC is a beautiful resort and location, the cost is more than we can rationalize. Granted we are East Coast and do not travel to Hawaii that often. I agree that 650 a month along with 2000 MF is a big nut to crack. I would not recommend that to our daughters either.

However, there are some really nice Marriott locations that do not carry the price tag of HI either in initial cost or MF's. The Barony for one cost 35K through Marriott (today's price) for an oceanside 2 bedroom unit platinum. This trades extremely well and must be half the price of MOC. MF are 895.

Now having said all that, actually we recommend to our daughters that they tell us where they want to go and we arrange for it either by reserving our owner week or placing a trade with II. So far, they have had no burning desire to own on their own right and are quite willing to allow us to arrange their use of one of our weeks. "Mama didn't raise no dummy's"

When were are gone they will inherit and then they will have all they can handle.

Beverley