Is it still a good idea to buy a t/s?

[korndoc]

With all the talk of doom and gloom...with rising air fares and reduced ability to use FF miles, and the value of timeshares dropping, is it still a good idea to buy a t/s, (resale, of course)?

I started the process and have a small deposit in for a purchase. I just got a letter requesting I send the full payment to the escrow company. Should I back out? I got a decent price of $10,500 for a Marriott Desert Springs Villas, I, Red Winter week, but I am nervous that this may not be a good time to buy a time share, especially after reading some of the posts here on TUG.

Thanks,
Jeff

 

[m61376]

If you can afford it, then yes. Since the market is a bit depressed the prices seem a bit lower than last year, so there are better buys.

Keep in mind that you should never buy a timeshare as an investment, other than as an investment in your family ) ...sounds like sales-talk, doesn't it?). Likely, as the economy rebounds, so will the prices. Of course, these are discretionary items so it makes sense they will get hit first. Drivable destinations may even increase in popularity as airfares increase.

If it is a place you'd like to visit with your family, and you are not financing the purchase and overextending yourself, then go forward and look forwards to some great trips with your family.

Keep in mind the flip side of things too- with increased utility costs, etc., hotel rates are likely to be rising and, while MF's will also likely increase, you will likely still be relatively ahead of the game. No one has a crystal ball, so it is impossible to say when the "best" time to purchase will be, but after you use it once or twice you'll more than make up any potential difference. Besides the added space (which is a biggie, of course) the other nice thing about timeshares is it gives you the option of vacationing more cheaply if you want to. Eating in for breakfast and lunch is easy (we find breakfast actually easier than going out) and can be very nice sitting on a balcony, and depending on the size of your family can save several hundred dollars. If money is tight or you just don't want to eat out every night, barbecuing a couple of nights likewise saves $$'s. These are things that are logistically difficult to impossible when staying in a hotel. So, besides bigger accommodations for less money, you can also save on other expenses as desired and/or needed.

 

[MikeM132]

My opinion of timeshare may be slightly different than what you hear from a salesman. You don't save money on vacation buying a timeshare. Why? By the time you figure purchase price, maintenance fees, exchange membership, lockoff fee, exchange fees, etc, you could pay for a very nice hotel somewhere probably with a lot of money left over. You may save some money by cooking in the t/s, but most eat out quite often (or always) anyway. The salesman b/s about inflation of hotels is pure b/s. They should compare it to the inflation of maintenance fees.
On the other hand, I am happy we bought timeshares. It is vacation on another level. I could go on an on, but that about sums it up. You cannot compare a 2br timeshare resort with a hotel. Also, being more or less forced to pick a vacation at least once a year has been one of the best things we ever did as a family. I wish I'd started earlier. Make sure you buy resale, though. With Marriott, you're paying top maintenance fees but you are buying to top resorts, too. You get what you pay for.

 

[pwrshift]

Real estate moves in cycles over time and very often with the economy. Prices might go lower before they go up again, but I suspect buyers will still want to take holidays as long as they can justify the expense. DSV1 is, IMO, a great timeshare and a platinum week for that amount seems very good short and long term - don't think they have a ROFR either. In your case you can drive to it in a few hours, a significant saving over having to fly the family there every year (Hawaii for example).

Brian

 

[kjd]

Trying to time any market on a long term basis is like trying to catch a falling knife. I believe the old saw of "market timing never works" is true in this case because you're making a long term purchase. It's sort of like buying a house with a mortgage. Do it when you can afford it.

As far as hotel rates go they are rapidly increasing as they chase the increased costs of doing business. I just paid over $100 a night at a neighborhood Marriott Fairfield in Denver at a weekend rate. Not too long ago it would have been around $75. I can even remember $60 for most Fairfields.

Finally, IMHO I don't believe that hotel rooms are a cost alternative to timesharing. They are two different experiences. You either like timesharing and all that goes with it or you don't like it. It's sort of like camping.

 

[sernow]

The best time to buy anything you desire and can afford are when prices fall and are low (historically).

If you like the timeshare vacation experience, I don't see how you can go wrong with a well thought out timeshare purchase.

 

[stevens397]

You either like timesharing and all that goes with it or you don't like it. It's sort of like camping.

Except for the fact that, thank God, it's NOTHING like camping!

 

[Cathyb]

MikeM: In certain locations, hotel prices have gone up -- like in New York City and Maui over the last 15 years. However that said, it isn't as evident in Palm Springs/Desert.

IMHO, I would suggest to the Poster to stall a little if he can on this purchase and see what Ebay does -- it is the timesharer's 'stock market'.

 

[applegirl]

I think now would be a great time for you to buy at DSV I. You live close enough to drive and I think because the proximity of Palm Springs area is so close to so many people in SoCal, that the trading power of these properties might increase as people look for trades within driving distance.

Not to mention this is a fabulous property. Did you know they are renovating all the units? Most are finished with the soft furnishings (carpet, funrniture, etc.). They plan on doing the hard surfaces soon (granite counters, new cupboards, etc.).

Just FYI, the Spa privilege they currently have is good through Dec. 31 2009. After that they are not sure what exatly will happen because they are renegotiating the contract. I can't imagine they will completely get rid of it but it might change in some way. Perhaps not allowing as many guests? Who knows.

If you can afford to buy this property, I think 10K is an okay price, but remember, this property does not have ROFR, so you could possibly get it for less.

 

[MikeM132]

MikeM: In certain locations, hotel prices have gone up -- like in New York City and Maui over the last 15 years. However that said, it isn't as evident in Palm Springs/Desert.

My point is, maintenance fee inflation at Marriott has outpaced hotel inflation in most places. T/S salesmen always showed me how "locking in" a vacation price is a great deal. Yeah, it would be, except the maintenance fees are far from "locked in".

 

[Travelmom64]

I agree with Cathyb, you did not mention where you found your TS to purchase, but Ebay has had some unreal deals. I am in the process of closing on a TS at approx. $7000 below Marriott's resale price and $2000 below the lowest resale price I could find for the same season/property. This week, I had two friends snatch up similar deals on Ebay. People may be looking for fast cash and willing to cut their losses by selling so low, and that works for people like us wanting to take the plunge in an unsteady economy. If you are not strapping yourself for the purchase, I say it is a good time.

 

[cp73]

Jeff,

I was just thinking about you the other day and where you were in your purchase because I hadn't heard from you recently. Remember what I had showed you that at worst case you can reserve a prime week, rent it out, and earn about 15% on your money after all fees. I wish all my investements could return that or lately just break even...

 

[JimC]

Owning a timeshare puts the owner on the hook for the costs to operate it. Luckily MVCI will not let the properties fall into disrepair; however it is the owners who foot the bill. And owners have little say in what those costs are.

Renting a timeshare or a resort room is subject to a slightly different environment. While costs are a factor, rents are generally set by what the market is willing to pay. There are more deals to be had and no capital to tie up.

A different view maybe but one that you might want to consider.

 

[MOXJO7282]

My point is, maintenance fee inflation at Marriott has outpaced hotel inflation in most places. T/S salesmen always showed me how "locking in" a vacation price is a great deal. Yeah, it would be, except the maintenance fees are far from "locked in".

I don't believe that this is the case, at least not the markets I follow in Maui, Aruba, Hilton Head and Myrtle Beach. Hotel rates have at least equaled MF increases

Regards.
Joe

 

[korndoc]

Thanks everyone. I love TUG. I left my message at 11:30 last night and by the next evening I have 13 responses!

Although this will be my first t/s ownership, I am pretty convinced about the value of a t/s vacation compared to hotel. We try to take several vacations each year, from a major 2 week trip to just long weekends. Often our vacations are not conducive to a time share, especially if we are touring around in Europe, spending no more than 2-3 nights in any one city. And we DO like to camp. But to go to a resort and relax in one place for a week is heavenly and doing it in a luxurious condo, such as those offered by Marriott, is perfect. I too am sorry I didn't do it many years ago when I first joined TUG and my kids were still living at home, but money was tighter then.

My post was more about timing and buying THIS t/s at THIS time. If prices are coming down, should I hold off? I am purchasing this through a broker who buys and sells timeshares. He was very nice and didn't ask for any down payment up front, trusting me to fulfill my responsibility when the time came. So I don't know if I should buy now because it's the right thing to do or if that is a mistake. I felt very good about the price when we closed the deal but that was a couple months ago (we had to wait for Marriott to slowly transfer the title to him on this t/s that he had just purchased before he could start the process of transferring the title to me. He warned me about this up front). On the other hand, if I might save a couple thousand more it would be worth it (and ethical) to bale. Don't know how low things will go.

Also, even though I do like the DSV and would enjoy going there, I purchased a Red week planning to use it to trade into other Marriotts and with II. I figured I would go to DSV on the shoulder seasons, renting cheaply ala Chris' teachings, while I use my Red/Platinum week to trade elsewhere. With airfares so high, who knows how that will affect our travel plans in the future. From SD, we enjoyed visiting Hawaii for $500 RT. Now that same trip is $945! We were planning on visiting the Waiohai Beach Club often. Not so sure now. I would not have made this purchase just to visit my home resort every year, especially not a Red week as visting in the spring or fall would be ok for us.

I can afford the $10,500....just want to feel as good about payig it as I did when I first closed the deal.

(whew! long post)

Jeff

 

[Smooth Air]

Korndoc Jeff: If you signed the Contract & paid your deposit how can you get out of it now even if you wanted to? When is your Closing date?

Smooth Air

 

[applegirl]

I think only you can decide if this is the right t/s purchase for you at this time. I think your price sounds very reasonable for a great property that I would expect to be a great trader. You're right, you can buy getaways very easily for shoulder seasons.

I think this deal sounds fine and I don't think you will lose sleep over it if you go for it. Could you get it for cheaper? Maybe a little, but do you want to keep playing the game or just get on with it? I think you should just go for it. JMHO! (since you asked)

Janna

 

[winger]

jmo. dont try to time the bottom. if you like the property and the price, just buy it. time is too precious to kick this around for too long. remember you are talking resale, not direct, which already means your price is already good.

 

[taffy19]

Palm Desert is less than two hours away from the LA area so it should stay a very desirable place to vacation with only one tank of gas so people may want to buy here rather than in Hawaii or other far away places. I see these values go down much further. I don't see the values drop too much in Palm Desert unless the economy completely falls apart but then it will hurt everyone in this country or even worldwide.

I read some of the doom and gloom already but they also predicted this for the Y2K and nothing happened. If the prices drop further, buy a second one later and your cost per unit is less plus you will be able to make reservations 13 months in advance.

 

[myip]

You can't time the bottom. Enjoy it now. How low do you think it will go? Maybe $8000. It may takes you years to find that price if you can find it. You are talking only $2500 difference from the price that you are paying now.

 

[korndoc]

Thanks everyone! I'm going to send the check in on Monday. I guess I needed to be reassured. I certainly am a "2nd thoughts, cold feet" kinda guy. I was OK until all the doom and gloom was being written here on TUG.

Besides, there is that integrity/ethics thing...

Jeff

 

[m61376]

Jeff-
Congrats and now look forward to some great trips!