How.?.Why?..has your timeshare DEVALUED since purchase..and is it fair ???

[sally13]

In my spare moments,I have been interested in the fast,changing,landscape,that we call timeshare..

This one is for everyone ,that has ever had some service,perk, contract change,or even a verbal promise,eliminated from thier (INVESTMENT).

A one thread list,of each corporations behavior,(good or poor),can be highly beneficial,to both resale bargain hunter,and retail purchaser alike.

I will start with my first timeshare expierience....Bluegreen was both a blessing and a scourge...Although they offered almost free bonus time..(witch we used relentlessly)..after 3 years of ownership..they forced us to either upgrade,or lose the coveted red week point status..

We cried foul..but on deaf ears it fell...this was (theft) ,in my book..we stopped doing business with bluegreen..

Thier reasoning,was that they were doubling thier inventory of higher class units,and this would help us all out,in securing prime weeks...

In reality..they were adding more new members,then ever before,with a larger sales push...

(HEY DENISE!!..you are all-knowing!!You predicted "ACTION"...within a week,and there you have it.....got any lotto numbers??)

 

[e.bram]

Agreed! Want ot increase the value of your TSes? Get rid of the corrupt and inept Management and BOD!ie. Lower the MFs.to the whole ownership condo level.

 

[Ridewithme38]

The thing holding the timeshare market back at this point....IS the lifetime commitments and ever increasing MF's

If i could buy a 10yr contract for a TS with a set MF rate over that time...i'd buy 5-6 weeks....But the problem comes in when year to year, i don't know what the MF is going to be.....AND if something comes up in my personal life(Lose of job, financial issues) i'm stuck with this debt for the rest of my life

 

[ace2000]

Timeshares have been a downward spiral for years. Nothing will reverse that in the near term. Not sure what ACTION you're talking about, but don't see any difference that can be made.

Everything is entirely covered in the contracts that each respective owner signed.

P.S. The reason that timeshares have devalued to this point, is that the market has decided that one week <insert your week number here> at resort named <insert resort name here> is worth this amount of money... <perform search on ebay to determine your contract's worth>. If you have points, just figure it out based on what week(s) you can pull with those points and insert into the above formula.

And then throw in the prices that people are renting weeks for, and you'll notice that very few timeshare weeks can be rented for more than the maintenance fees. Again, because the free market has spoken. I'd say it all makes perfect sense to me...

 

[Passepartout]

I knew Sally couldn't keep her word and stay on the sidelines. She confuses two things. Timeshare and investment. My timeshares have exactly the same VALUE they had the day I acquired them. The VALUE is in the vacations and time they have allowed me and my family to go to nice places and be together. We prefer them to lodging in cramped hotel rooms or to the uncertainty of renting from private individuals (like vrbo). The VALUE has not changed.

Investment is something else entirely. Investment is intended to give positive return. We study what we 'invest' in to accomplish this end. If someone confused timeshare as investment, they simply had the wool pulled over their eyes by some shyster salesman and didn't give the purchase due diligence.

Timeshare and cars are two of the most comparable expenditures (imo). They devalue the instant after they are purchased, and are sold by implying some underlying 'value', but in the end, a car is just transportation, whether it's a Pinto or a Rolls. A timeshare is only the 'value' of the vacations it allows the owner. Trying to sell- or pass to an heir- either one after any period of ownership- and expect anything close to the original purchase price- is unrealistic.

OH, as to the FAIRNESS issue from the OP. If you equate timeshare ownership to car ownership, they are infinitely fair. You maintain a TS to maintain value, just as you maintain a car to assure it will continue to perform as it did when you bought it. Yet in very few instances will either be worth more on the resale market. It's only FAIR.

Jim Ricks

 

[ace2000]

My timeshares have exactly the same VALUE they had the day I acquired them. The VALUE is in the vacations and time they have allowed me and my family to go to nice places and be together. We prefer them to lodging in cramped hotel rooms or to the uncertainty of renting from private individuals (like vrbo). The VALUE has not changed.

I can see it either way. VALUE to an individual??? Or VALUE could interpreted as what it would bring back on a sale to another individual. Hard to quibble about that one either way... all depends on how long you plan on keeping it, I would guess.

 

[sally13]

Devalue...

Is a( broad in scope) word..

.Google...timeshare devaluation..and you shall see that,developers-corporations,even hoa's have been busy doing this type of coin clipping..

ACTION...I guess..is the word,that DENISE uses ,to describe my worthless,ludicrous,posting......I was just mentioning that she is now able to once again,join in the fray..as she predicted..

The term INVESTMENT,is a general term ,describing said timeshare...duh...

Also ...in reference to keeping my word??Never did I say I wouldn't forgive and forget....I like to think ,that holding a grudge is sort of...well..childlike

 

[travel maniac]

My timeshares have exactly the same VALUE they had the day I acquired them. The VALUE is in the vacations and time they have allowed me and my family to go to nice places and be together. We prefer them to lodging in cramped hotel rooms or to the uncertainty of renting from private individuals (like vrbo). The VALUE has not changed.

Jim Ricks

Excellent point Jim, couldn't agree more.

 

[sally13]

perhaps...

fair ....should be defined,...as in loss,or gain of satisfaction,in ANY department...ie M.fee hike,special assesments,Quality of furnishings, structure in general,less staff,area gone to the dogs,sofa lifespan ,availability,ease of securing prime weeks,maid staff,restaurant quality,safety of grounds,perks eliminated,gifting restictions,higher ammenity cost hikes,change in trade options,beach erosion,bugs in unit,change in general demographics of unit users,....you get the idea

This thread is about..what you like or do not like about,how your resort and the management have performed ,since purchase..feel free to gloat or rant...

[Let's let Cindy speak for herself - DeniseM]

 

[Cheryl20772]

My timeshares continue to not be an investment at all. We might as well have flushed $50K down the crapper. The money we paid to the developers will never be recouped. The money we pay for fees is essentially the price we would pay to vacation without the initial purchase. In today's world, only buy timeshares resale!

 

[dan_hoog]

First, to be clear for all, I own timeshares because they suit for my vacation needs -- an 'investment' in our family vacation plans, though really just an expense. All of us would like this initial expense to preserve more value than is likely, but I doubt many of us see increasing monetary values as likely. We would all likely want maintenance fees to remain forever well below rental rates for the weeks at the particular resorts.

I own several Marriott weeks, purchased from the Developer and resale. I'm okay with having paid full price and with those that I didn't. None were $1 or close to it. All of mine rent well over the maintenance fees.

When I originally purchased, Marriott pointed out that their units held value more than others. The seeming 50% resale price break didn't really matter that much to me. At that time, they had an active resale program, active ROFR (debatable effect, but not zero). Subsequently, they have scaled back or eliminated the resale program and actively disparage legacy owners in favor of their shiny new points trust super-exchange program.

I think the launch of DC and their antagonism toward resales has further weakened their resale market. The basic quality of most of their resorts and the other factors remain. We are happy with what we own, but no longer assume much, if any, residual value should we sell.

On the plus side for resale buyers, you can pick up units with 3x rental to maintenance fee ratios that pay off in 5 to 7 years and will still most likely sell for some positive value (much less than purchase though) after that time.

I personally think rental rates will rise faster than maintenance fees in the next few years, if the economy generally heats up and improves. I've heard there is very strong demand for vacation rentals in 2011 -- to almost unprecedented levels in some cases.

 

[ace2000]

I *think* the OP was originally asking about why the selling prices of timeshares are taking a spiral downward. Not sure why it's important to answer that question with all of the investment vs. non-investment talk. Maybe I'm missing something about all of the discussion here.

 

[sally13]

Cheryl..

I find it hard to believe..that if you indeed travel in the 4 months,of prime time,in any given year,that you could reserve months ahead of time your 2 bedroom condo type unit ,year after year,at the low cost of 5-700 bucks..if so..you do not have a quality unit...just sayin

 

[T_R_Oglodyte]

Agreed! Want ot increase the value of your TSes? Get rid of the corrupt and inept Management and BOD!ie. Lower the MFs.to the whole ownership condo level.

That's an excellent idea!!! I'm all for it.

I know you've been involved in discussions on this topic before, so I'm sure you've carefully considered what has been mentioned before. And being the person that you are I'm sure that you wouldn't continue to raise this topic without having considered the issues previously posed.

So, in that regard, I'm hoping that you will elaborate on some matters that leave me confused. I know the answers are probably obvious, but I haven't been able to figure them out yet, so I'm hoping you can help.

• When someone leaves the condo at the end of the week, are they responsible for cleaning the unit, or does the arriving occupant clean up the unit themselves?
  
• When a person checks out of the condo, where do they leave the key and how does that get transferred to the next person? Since we're running this like a whole ownership condo there isn't a front desk to handle check-in and check-out.
  
• If there is a problem inside the unit, such as water leak, a running toiler, a broken chair, who is responsible to fix the problem? Since we're running this like a whole ownership condo, this is a problem for the condo owner, not the association. So does the current occupant call the plumber or buy the new refrigerator? If the carpet is torn or a wall is damaged, who arranges to get that fixed and how is the money collected to pay for repairs?
  
• How do the utility bills and taxes get paid for the unit? In a whole ownership condo those are the responsibility of the condo owner, not the homeowners association. Since we're running this like a whole ownership condo, this is a problem for the condo owner, not the association.
  
• When furnishings need repair and replacement inside the unit how does this get done? Since we're running this like a whole ownership condo, this is a problem for the condo owner, not the association.

These are just a few questions that I had about the implementation of your excellent suggestion.

 

[Passepartout]

fair ....should be defined,...as in loss,or gain of satisfaction,in ANY department...ie M.fee hike,special assesments,Quality of furnishings, structure in general,less staff,area gone to the dogs,sofa lifespan ,availability,ease of securing prime weeks,maid staff,restaurant quality,safety of grounds,perks eliminated,gifting restictions,higher ammenity cost hikes,change in trade options,beach erosion,bugs in unit,change in general demographics of unit users,....you get the idea

[Let's let Cindy speak for herself - DeniseM]

What are you getting at? Other than beach erosion, every one of the above issues is about the effectiveness of your own HOA or BOD. It's up to each owner to vote the proxy you get for whom you feel is in your best interest.

Some will vote for continuous annual special assessments for the latest and greatest amenities, while some will patch and make do with 17" CRT televisions and '30 year old' sofas and tell you how low the MFs are. I hope- and vote for- an approach somewhere between the two.

Once again, I'll draw the analogy of maintaining a car. Do you annually replace every light bulb, hose, belt, tire, upholstery, and get it painted? Or do you wait until something breaks and it leaves you on the side of the road before you patch it back together? Or do you change the oil on some schedule (you don't know whether it's worn out or not, do you?), and replace belts and hoses when they show some sign of wear or age. It may still break down but you've balanced low maintenance cost with maximizing transportation value.

Maintenance of timeshare VALUE is the responsibility of both the owners and the HOA. Done right, it's pretty democratic (small 'd').... Jim

 

[ace2000]

Maintenance of timeshare VALUE is the responsibility of both the owners and the HOA. Done right, it's pretty democratic (small 'd').... Jim

If I can't rent my timeshare week for more than the MFs, then I have a problem with the VALUE of that timeshare, and that means that I have a problem with the HOA. That's my personal opinion.

 

[sally13]

Jim..

There are MANY types of timeshare enterprises..many that are corporate controlled and have no HOA..

This is a general discussion of what timeshares of all kinds are doing right or wrong in dealing with the ongoing crisis of many fronts...

To see a list of complaints and praises of how each entity is providing or taking away services and rights is a very worthwhile adventure..

This points folks in the correct vacationing direction..

I did mention,that on a previous trade,Vistana resorts seemed to be doing an excellent job,of improving the VALUE of thier resorts..but alluded to changes coming..so there you have both good and bad for this particular resort ..depending on what you own and how you obtained it..this is another example ..of what I am looking for...


If nothing good or bad has happened at your resorts..I guess your situation is a wash..Have you owned very long??....

from your car analogy above ..I guess it would be safe to say..that when you have used your car (TIMESHARE),for a few years,it is time to buy a NEW timeshare..like a car it depriciates with time..(upgrade perhaps??)Do you think M-fees should stay the same,year after year??Should they only increase at the bogus CPI inflation rate??How do you make it all work when the costs to maintain,outrun the fees??

This I believe is what a large part of the industry faces now..hence the need to cut services or find better ways to bring in more bucks...

 

[Deb from NC]

Going back to Sally's original post, I think Spicebush and Swallowtail owners had a good reason to complain when Marriott decided to stop managing them
(quite a few years ago now, but this just an example that comes to mind).
I've seen my Spicebush week go from 5 stars ( or whatever it was in II) to no stars. Also no internal trading priority with Marriott. A definite drop in trade value. Having said that, I think the new management group is doing a good job. But not having the Marriott name attached has (in my observation) definitely hurt market value and exchange value. Was that fair? No, but then what in life is?
Deb

 

[AwayWeGo]

Corporate Controlled Timeshares.

There are MANY types of timeshare enterprises..many that are corporate controlled and have no HOA.

Plenty of timeshares that do have HOAs are corporate controlled anyhow.

Shux, lots of timeshare HOAs themselves are corporate controlled.

So it goes.

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

 

[equitax]

Timeshare market values

Having had contemplated buying a timeshare for close to a year prior to deciding to buy a week on the resale market may not make me an industry expert, but here are my thoughts:

The bad

1. The "price" set by the developer is astronomically high for a reason: - The initial purchaser pays all the sales and marketing expenses -the free weeks, free cruises, sales commissions and everything else. The developer also knows that they are actually selling a payment - regardless about what they tell you about vacation ownership. (This is not to say that I think timeshare is bad, otherwise I would not have bought one.) The developer's prime goal is to sell you the unit, because besides the initial price, they do benefit from the income stream that follows when you pay maintenance each year.

2. The deed protects the developer as much as it protects you - when they grant the deed, you agree in said deed to be responsible for taxes and MF "in perpetuity" for most cases.

3. Developer has zero incentive to keep the resale value up. Developer will build more resorts, and if they ever run out of inventory in a particular resort that is hot, they can just exercise ROFR on one that is being offered for sale by an "owner." No matter how hot the resort, if you do the math you will see that in any resort X number of units X 52 weeks that there will be a certain amount of people looking to sell.

4. The free market price (resale) recognizes that supply for the most part exceeds demand, based on a variety of factors - changes in lifestyle ,family configuration, and not to forget money issues which will motivate a seller to "dump" a property.

5. If the developer actually believed their own sales pitch, then why on earth would they not exercise ROFR for a resale at 10K when they sell the same thing (as developper) for 35K? The answer is that as long as someone is paying the MF and they have inventory available they don't care.

6. What the developer threatens resale buyers with as "stripped rights" are not worth the price differential - Take for instance the fact that if you buy resale you can't convert your week to MR points - If you actually do the math - where you could theoretically trade 1/2 your DP for MR points at 1DP to 32MR points, this would mean if you owned 3000 DP (1200 maint per year, plus initial cost of about 29400), you could get 48000 MR points in a cal year for 1200 bucks (3 nights in cat 4 hotel) - not exactly a penalty for buying resale when you consider that you save 20K off the bat. You could in theory not use your resale week for 10 years, not even try to bank or swap and still be economically equivalent if you bought from developer and got the points.

7. What ain't in the deed ain't written in stone: case in point DVC upcoming changes, though DVC was courteous enough to provide clear advance notice and be reasonable with the strike date.

8. The fact that the IRS allows US citizens to deduct interest on a mortgage as if timeshare was a "residence" is ridiculous. Makes for great marketing and lower consumer borrowing costs though.

9. The fact that a certain new trust program will charge "up to USD 1.00 per point for waiving ROFR" will almost eliminate the resale market of those - take a 3500 bite to them, 2000 to the agent, etc and if the price of points will reflect the price of weeks, you will see what I mean.

The good:

1. Timesharing does provide owners with (for the most part) bigger and better accommodation. I never want to go back to a 350 sq ft hotel room if I can avoid it.

2. For those that CAN afford it - and by that I mean have the cash to pay the upfront costs (from resale I dont believe in throwing money away) AND those who have sufficient extra cash left on a monthly or annual basis to pay for MF, travel, extras and inflation. (There is no sense owning a week if you can't afford to get to it or maintain it.) You can justify the upfront costs as prepaying for better / bigger accommodations.

3. If you meet the criteria in number 2, you can benefit from the fact that there are many people out there who bought from the developer that a) should not have bought from the developer and b) probably should not have bought at all. That all means that there is a large percentage of people that simply "need" the annual payments to go away which means buyer's market.

My rule of thumb:

1. Timeshare is not an investment.

2. The kids won't be off in gold season !

3. Do you have any consumer debt, If so think twice.

4. Is the timeshare vacation going to be one you can continue to afford? You will still spend money at the resort that "may" be included in paying for a hotel room or direct rent (housekeeping for instance) - bear this in mind. Remember also that you will need to spend money annually in order to receive the "benefit" of your timeshare - leave, plane tickets whatever.

5. How long can you afford to let it sit empty (with you paying) before you feel it financially.

6. Most importantly - before you buy - find out what it will cost you to "get out" - budget for ROFR waiver fees, realtor commissions, advertising, maintenance etc. and see that you can afford to LOSE that money.


Happy travels....

 

[Tommart]

I agree with Others

I have two major issues:

1. MFs are too high (along with associated fees to trade), and
2. There's no organized resale process.

In addition, developers sold timeshares at inflated prices in the first place. Just like the new home market, they needed to come down. In fact, developer prices still need to come down from where they are.

MFs are a tricky issue. I want my timeshare to look brand new and have the latest technology. For example, Woodstone updated to flat screen TVs and added DVD players, and replaced carpet, beds, and other items to keep the rooms up to date. Most units were less than ten years old and a tight management could have kept the older equipment and furniture.

Then talking out of the other side of my mouth, I bought a two-bed lockout about 6 years ago and the MF was $330. It's now $540. Seems to have risen faster than I expected.

Eagle Trace at Massanutten is owner controlled. I stayed in an Eagle Trace unit last year. They still had tube TVs. The Eagle Trace MFs are $50 less per year.

I'm glad that Woodstone management spent the money to upgrade even though it costs me $50 more/year. Still, I'm sure there's ways to reduce spending.

 

[bnoble]

That's ultimately the problem. No one wants to spend any money, but everyone wants the latest and greatest.

It's hard to have both.

Ideally, each owner should try to find a resort/system in which to own that meets their particular tastes for balancing costs vs. amenities. For example, we really like Wyndham's resorts. They are "a little nicer than average" in terms of amenities, and a little more expensive than average in terms of fees. It seems to work for us. We don't need the extra level of luxury (and expense) that a typical Marriott might offer, but we don't want to stay in places too much lower on the amenity totem pole.

Finally, it's also very important to remember:

timeshares ... [are] really just an expense

The whole premise of a timeshare is that you are committing yourself to pay for vacation lodging each and every year. In exchange, you are getting a discount on that lodging---generally, even if you buy from the developer, though some discounts (resale) are better than others (the developer).

 

[ace2000]

That's ultimately the problem. No one wants to spend any money, but everyone wants the latest and greatest.

I think the real problem is how to know whether I'm getting milked in the whole deal and whether or not there is an aggressive effort to keep costs down. It's very difficult to know if salary and purchasing decisions are made wisely by just reading the end-of-year statements. A LOT can be hidden in those. I personally have a lot of mistrust on that issue.

 

[e.bram]

Alan:
Even if you factor in the RE taxes and other expenses(like having a maid cleaning, utilities repairs and replacements , which whole ownership condos have, even if paid separately), my TSes cost at least twice as much as my oceanfront condo which has a doorman and valet.
You have been brain washed by Managements cos and BOD members(like John).
Do the arithmetic actually using all the costs of a TS and whole ownership condo, and see the difference.

 

[ace2000]

That's ultimately the problem. No one wants to spend any money, but everyone wants the latest and greatest.

It's hard to have both.

Ideally, each owner should try to find a resort/system in which to own that meets their particular tastes for balancing costs vs. amenities. For example, we really like Wyndham's resorts. They are "a little nicer than average" in terms of amenities, and a little more expensive than average in terms of fees. It seems to work for us. We don't need the extra level of luxury (and expense) that a typical Marriott might offer, but we don't want to stay in places too much lower on the amenity totem pole.

Finally, it's also very important to remember:

The whole premise of a timeshare is that you are committing yourself to pay for vacation lodging each and every year. In exchange, you are getting a discount on that lodging---generally, even if you buy from the developer, though some discounts (resale) are better than others (the developer).

And since you mentioned Wyndham... I'm getting tired of being milked on all of their fees. It used to be easy to recoup my maintenance fees when I could rent points. Now, it makes it hard for me to see things from the other perspective.