Is there any benefit for me to ever buy a timeshare?

[jabberwocky]

Prove me wrong but I just can't imagine a scenario where you can amass 10+ years of fees, adjust for opportunity cost, time/value of money adjustments and arrive at something resembling a good financial decision. You may have pulled it off, but you're in the minority. Post what your acquisition dates, costs and fees were and I'll run the numbers for you. I'm just trying to be straight up with people thinking of jumping on the timeshare wagon. They should know that there will be no positive return on their investment. They should know that renting is a much more affordable option. They should also know that the level of accommodations that they get by going the timeshare route will far exceed what they can get from a hotel. However, we should be honest with them and let them know that they can get the exact same timeshare accommodation by renting and not taking on the lifelong burden of ownership. Let's be honest. It's hard to give these things away. Most of the hardcore owners on this board would jump at the chance to give some weeks away for a dollar. It sucks, but it's true.

I don't think you'll find much sympathy for this line of reasoning here. There are a lot of things in life which are negative net present value propositions (kids are just one example) yet provide other benefits and make life enjoyable. Others have well articulated what they are in this thread so I won't expound upon them.

Bottom line is that some people prefer to rent their homes, cars, companions and vacation lodging as it provides flexibility and no need to worry about potential financial ramifications in ending a commitment. For others there are long-term benefits from these commitments that go beyond financial considerations.

 

[CPNY]

Single man, no kids. Not picky about accommodations, whether it's camping, Motel 6, etc. I do enjoy getting resorts if I can get them for about the same price or just barely above what a basic hotel room. So far, I've had a lot of luck taking advantage of timeshare incentives for some cheap vacations ($49 for four days/three nights with the obligation of attending a presentation). I've been on several of these presentations, and the math never adds up. Why should I pay $10,000+ and $1,000+ a year in maintenance fees when I've been able to get by for less than $500 a year for all of my accommodations? I usually travel alone or with whichever girl I'm dating at the time. I've discovered the resale market where many people are giving away the same packages that I've seen sold by developers for thousands of dollars. But given all the tricks/hoops you have to jump through, I'm hesitant to even get involved in something like this. Is there any real benefit for someone like me who doesn't have a family and doesn't plan to ever have one?

No family with no plans and it great because when I haven’t used them I rented them. If you own in the right system and pay nothing it can be worth it.

 

[MOXJO7282]

Not sure where you're coming from with this. Your decided to use a 0% financing vehicle as opposed to a high interest one or take the money from your retirement savings. In other words, you considered the opportunity cost.

My point was I didn't even use my own money at all. That really isn't the issue though, that was just my creative way to buy my Marriott TSs.

You seem to suggest there is no case where buying a TS makes sense and I was basically agreeing with you with the one except that if you really want to go to the MOC in the winter for years to come, or some other high demand unit during a high demand time, a well purchased resale unit can indeed have a good ROI. Many TUGGERS can tell you of great resale deals they have purchased and now they save $1000s not having to pay a rental premium.

Probably my best example is a Myrtle Beach OceanWatch Plat OF I bought for $10k. I've rented it 4 times since buying at $1800+ profit annually. I could sell that unit quickly for $12k and at $13.5K with patience. I have many others like that and so do many others but it based on owning a prime Marriott bought at a good resale price that is used during prime time. A unit like this will also retain its value. I've taken to the extreme by owning and renting these prime weeks but even someone who uses one has the same positive ROI..

 

[bnoble]

The factor you and many others call "adjust for opportunity cost, time/value of money adjustments" is not a valid factor to figure in my opinion for anyone that is using their financial resources properly when investing for retirement.

I strongly disagree with this. The simplest reason to consider it is that there are two different ways to pay for exactly the same vacations, owning or renting. Take as a simple example someone who wants to stay in a particular Hawaiian timeshare resort for one week every year for the foreseeable future. They could buy a timeshare week at that resort and then pay annual fees each year, or they could just rent as they go. In order to properly compare the two cash flows, you have to account for the time value of money---that's just another way of talking about the opportunity cost of the purchase price.

It seems to me that what you are talking about is a different question, namely: when is it okay to spend money on vacations vs. save for retirement or put it towards some other purpose?

 

[pittle]

The big reason I wrote this thread was more to see why you guys choose to timeshare. Like are there hidden tricks of the trade I'm not seeing? My mom owned a timeshare that was given to her while I was growing up, and we stayed in some nice places (mostly Marriott Vacation Club resorts). I should probably also mention that, because my mom was never tech savvy with a computer, I set up an account on Interval International years ago and helped her book exchanges and getaways. She recently was able to get rid of her timeshare, but low and behold I'm still able to log into II! I'm tempted to renew the membership just so I can book getaways despite no one in my family owning a timeshare anymore.

We renewed Interval several years ago and just use the Getaways and Special deals. We went to some nice places at great prices. I did not renew it this year as we have several places to go already.

 

[lifesabeach101]

Single man, no kids. Not picky about accommodations, whether it's camping, Motel 6, etc. I do enjoy getting resorts if I can get them for about the same price or just barely above what a basic hotel room. So far, I've had a lot of luck taking advantage of timeshare incentives for some cheap vacations ($49 for four days/three nights with the obligation of attending a presentation). I've been on several of these presentations, and the math never adds up. Why should I pay $10,000+ and $1,000+ a year in maintenance fees when I've been able to get by for less than $500 a year for all of my accommodations? I usually travel alone or with whichever girl I'm dating at the time. I've discovered the resale market where many people are giving away the same packages that I've seen sold by developers for thousands of dollars. But given all the tricks/hoops you have to jump through, I'm hesitant to even get involved in something like this. Is there any real benefit for someone like me who doesn't have a family and doesn't plan to ever have one?

There's alot of FREE ones out there on the Bargin Basement. One of them, Maui, paid the closing, MF and threw in a free week and my favorite my Napa timeshare did the closing for free also.

I know nothing is free but it beats paying $20 to $30K

 

[DavidnRobin]

Gonna need a timeshare rental for that view. Nice photo.

Thanks.
Putting aside purchase cost - only $200/nt for a 1250sqft 1Bd OF villa with panoramic view (w full Kitchen, W/D, etc) since I rent out the studio side.

This is why I Timeshare.


Sent from my iPhone using Tapatalk

 

[MOXJO7282]

I strongly disagree with this. The simplest reason to consider it is that there are two different ways to pay for exactly the same vacations, owning or renting. Take as a simple example someone who wants to stay in a particular Hawaiian timeshare resort for one week every year for the foreseeable future. They could buy a timeshare week at that resort and then pay annual fees each year, or they could just rent as they go. In order to properly compare the two cash flows, you have to account for the time value of money---that's just another way of talking about the opportunity cost of the purchase price.

It seems to me that what you are talking about is a different question, namely: when is it okay to spend money on vacations vs. save for retirement or put it towards some other purpose?

So if you follow this you better factor in all the points you get from your ownerships and the resale value. Also what % factor do you use? What if you make a bad investment with the opportunity? It just becomes a guessing game.

 

[cman]

So if you follow this you better factor in all the points you get from your ownerships and the resale value. Also what % factor do you use? What if you make a bad investment with the opportunity? It just becomes a guessing game.

Here's a basic calculator for calculating opportunity cost, http://www.financialcalculator.org/personal-finance/opportunity-cost-calculator. Just use a conservative estimate of 3% and the results will be obvious.

Just to be clear. I am in no way suggesting that timeshare ownership should be solely based on a financial analysis. Ownership is a personal decision that has to take into account factors that are difficult to quantify. I'm strongly considering a purchase of a July week at MOC, because I know that my college age kids will be able to join us. I fully realize that I'll be paying a premium to make this happen. I just need to know how much that premium is. Any financial analysis that excludes opportunity cost is simply not valid. We've all been to the presentations where they hide the true cost. I just hate to see that practice perpetuated here by well intentioned people.

 

[MOXJO7282]

Here's a basic calculator for calculating opportunity cost, http://www.financialcalculator.org/personal-finance/opportunity-cost-calculator. Just use a conservative estimate of 3% and the results will be obvious.

Just to be clear. I am in no way suggesting that timeshare ownership should be solely based on a financial analysis. Ownership is a personal decision that has to take into account factors that are difficult to quantify. I'm strongly considering a purchase of a July week at MOC, because I know that my college age kids will be able to join us. I fully realize that I'll be paying a premium to make this happen. I just need to know how much that premium is. Any financial analysis that excludes opportunity cost is simply not valid. We've all been to the presentations where they hide the true cost. I just hate to see that practice perpetuated here by well intentioned people.

That is totally subjective and again not a given that your investment will be a positive. It again doesn't take into account many elements. I can see if you were calculating the taking of a loan to pay for that has that fixed factor but to add a unknown factor of what you think you would've earned on money that should be above and beyond any investment funds is just an example of over thinking things. Yes a loan that adds 10-15% is something you need to factor in but an unknown maybe positive investment amount that is offset by avoiding rental premium just doesn't add up to me.

 

[bnoble]

So if you follow this you better factor in all the points you get from your ownerships and the resale value. Also what % factor do you use? What if you make a bad investment with the opportunity? It just becomes a guessing game.

I assume that anything I buy will be worth zero when I try to dispose of it. It may be negative (seller pays transfer costs) or I may make a few bucks. Either way it’s a small end-of-ownership flow so a very small contribution to NPV that I feel safe ignoring. I amortize the purchase price over ten years in a range between long-run inflation and long-run SP500 return to get a sense for best/worst case. If the nightly cost of the first year’s use is a good value under those assumptions I will consider buying it. If the time horizon has to be longer than ten years to make it work, I pass.

However, all my purchases have been between negative and a few hundred dollars, so opportunity cost doesn’t matter there; the purchase price is in the noise. There was one that was a bit more and there it was offset by a very low $/pt ratio in MFs. Otherwise I would have passed.

 

[DannyTS]

Single man, no kids. Not picky about accommodations, whether it's camping, Motel 6, etc. I do enjoy getting resorts if I can get them for about the same price or just barely above what a basic hotel room. So far, I've had a lot of luck taking advantage of timeshare incentives for some cheap vacations ($49 for four days/three nights with the obligation of attending a presentation). I've been on several of these presentations, and the math never adds up. Why should I pay $10,000+ and $1,000+ a year in maintenance fees when I've been able to get by for less than $500 a year for all of my accommodations? I usually travel alone or with whichever girl I'm dating at the time. I've discovered the resale market where many people are giving away the same packages that I've seen sold by developers for thousands of dollars. But given all the tricks/hoops you have to jump through, I'm hesitant to even get involved in something like this. Is there any real benefit for someone like me who doesn't have a family and doesn't plan to ever have one?

We bought all our timeshares resale and we are pretty happy about our choices. For us it is about optimizing the travel budget and not about paying the lowest rate possible. We have stayed in resorts that would have cost us $6,000-$10,000 without owning a timeshare and our real cost was a small fraction of that.

At this stage of your life, continue doing what you are doing. I had enjoyed doing that for many years. Maybe not Motel 6 necessarily but for me the proximity to a hiking area, a nice beach or being in an old European city was more important than the granite in the bathroom. With that being said, things may change for you in a few years and you will know where to find the information for the best deals to join the happy community of timeshare owners

 

[davidvel]

Here's a basic calculator for calculating opportunity cost, http://www.financialcalculator.org/personal-finance/opportunity-cost-calculator. Just use a conservative estimate of 3% and the results will be obvious.

Just to be clear. I am in no way suggesting that timeshare ownership should be solely based on a financial analysis. Ownership is a personal decision that has to take into account factors that are difficult to quantify. I'm strongly considering a purchase of a July week at MOC, because I know that my college age kids will be able to join us. I fully realize that I'll be paying a premium to make this happen. I just need to know how much that premium is. Any financial analysis that excludes opportunity cost is simply not valid. We've all been to the presentations where they hide the true cost. I just hate to see that practice perpetuated here by well intentioned people.

$2000 acquisition cost, average of $1500 annual fees over 10 years for a Gold Marriott.

In return: 2 weeks a year in a 2br Marriott in Hawaii, Park City, Lake Tahoe or Palm Desert every year. Straight line this is less than $125 a night. I could never rent these weeks for anywhere near this price.

 

[vacationtime1]

I assume that anything I buy will be worth zero when I try to dispose of it. It may be negative (seller pays transfer costs) or I may make a few bucks. Either way it’s a small end-of-ownership flow so a very small contribution to NPV that I feel safe ignoring. I amortize the purchase price over ten years in a range between long-run inflation and long-run SP500 return to get a sense for best/worst case. If the nightly cost of the first year’s use is a good value under those assumptions I will consider buying it. If the time horizon has to be longer than ten years to make it work, I pass.

However, all my purchases have been between negative and a few hundred dollars, so opportunity cost doesn’t matter there; the purchase price is in the noise. There was one that was a bit more and there it was offset by a very low $/pt ratio in MFs. Otherwise I would have passed.

If you amortize the purchase price over ten years, you are equating that to an opportunity cost on your capital at 10%/year -- not an unreasonable number. And it is an opportunity cost.

I agree that this is insignificant for a low cost or free timeshare. But when dealing with a prime timeshare or Marriott DC points, the opportunity cost discussion involves real money.

For anyone who does not believe opportunity cost is real -- please buy a WKORV-OF unit (~$30-35K); I will happily sign a ten year lease and pay you MF's + a $1,000/year "profit".

 

[pedro47]

Before I retired some 19 years ago. I never had two consecutive weeks off.
I am now finally try to enjoy life.

 

[tahoeJoe]

Asking why anyone would buy a timeshare is a great question.

Our strategy--we picked-up only resale timeshares, choose locations with lower maintenance fees, and all were only a couple hundred (transfer fees). We also bought only high-end hotel brands with beautiful amenities. It is a commitment and definitely not for you at this time, but we find we spend less daily than we would for comparable hotel rooms per night, almost always under $200/night even over holiday stays and in a one bedroom units. And, we love having kitchens and washers and dryers. We find having kitchens saves us money in food costs, and we have even packed dirty clothes when we've been pressed for time and done laundry when we arrive. Also, we do not have kids, but we do enjoy traveling with friends and family, which is easier in larger accommodations.

We enjoy time-sharing, but all posters are correct in that you HAVE to do the math for yourself, only ever buy resale, and be a planner to get any value (personal or financial) out of owning.

 

[DesireMore]

Update. We enjoyed our nights in Orlando. Saw a couple properties and programs. Currently in Daytona Beach at a beachfront timeshare we got for a good price. Out of all the timeshares we saw in Orlando, we really liked Sheratons. Does anyone have any experience with Sheraton vacation club resales?

 

[Synergy]

None whatsoever - but enjoy my hometown! Daytona is one of the places we usually end up in hotels, because we avoid busy weekends so it's usually dirt cheap.

 

[dagger1]

Single man, no kids. Not picky about accommodations, whether it's camping, Motel 6, etc. I do enjoy getting resorts if I can get them for about the same price or just barely above what a basic hotel room. So far, I've had a lot of luck taking advantage of timeshare incentives for some cheap vacations ($49 for four days/three nights with the obligation of attending a presentation). I've been on several of these presentations, and the math never adds up. Why should I pay $10,000+ and $1,000+ a year in maintenance fees when I've been able to get by for less than $500 a year for all of my accommodations? I usually travel alone or with whichever girl I'm dating at the time. I've discovered the resale market where many people are giving away the same packages that I've seen sold by developers for thousands of dollars. But given all the tricks/hoops you have to jump through, I'm hesitant to even get involved in something like this. Is there any real benefit for someone like me who doesn't have a family and doesn't plan to ever have one?

No

 

[needvaca]

Update. We enjoyed our nights in Orlando. Saw a couple properties and programs. Currently in Daytona Beach at a beachfront timeshare we got for a good price. Out of all the timeshares we saw in Orlando, we really liked Sheratons. Does anyone have any experience with Sheraton vacation club resales?

I still contend you are not a great fit for a timeshare. Do you really want to be locked into going to the same place every year?

BUT, if you are really interested in Sheraton, your best bet would be picking up a low cost (close to free) Sheraton Vistana Villages timeshare- Bella or Key West phase only. Those phases come with Staroptions for the Vistana network, that you could use to trade into 20 other Westin/Sheraton properties. I own a 2 Bedroom there. It works well for me, and I know I could get rid of it easily when I no longer need it.
Visit the Vistana thread to learn more about that network of timeshares.

 

[cman]

Update. We enjoyed our nights in Orlando. Saw a couple properties and programs. Currently in Daytona Beach at a beachfront timeshare we got for a good price. Out of all the timeshares we saw in Orlando, we really liked Sheratons. Does anyone have any experience with Sheraton vacation club resales?

You can rent any Orlando Sheraton for a price that's at or below the maintenance cost. When you look at the rental ads for the week you want, remember it's just an asking price. With few exceptions, you can get any Orlando resort by just offering to pay the annual fees. Truth is, that for 90% of the ads you come across, yours will be the only offer.

 

[CPNY]

Update. We enjoyed our nights in Orlando. Saw a couple properties and programs. Currently in Daytona Beach at a beachfront timeshare we got for a good price. Out of all the timeshares we saw in Orlando, we really liked Sheratons. Does anyone have any experience with Sheraton vacation club resales?

Yes buy a mandatory resort within vistana and you can use them at all the Sheraton /Westin properties

 

[DesireMore]

I probably still won't buy a Sheraton timeshare even resale; I was more curious if they put a ton of restrictions on their resale units like some resorts do.

 

[farinc]

Prove me wrong but I just can't imagine a scenario where you can amass 10+ years of fees, adjust for opportunity cost, time/value of money adjustments and arrive at something resembling a good financial decision. You may have pulled it off, but you're in the minority. Post what your acquisition dates, costs and fees were and I'll run the numbers for you. I'm just trying to be straight up with people thinking of jumping on the timeshare wagon. They should know that there will be no positive return on their investment. They should know that renting is a much more affordable option. They should also know that the level of accommodations that they get by going the timeshare route will far exceed what they can get from a hotel. However, we should be honest with them and let them know that they can get the exact same timeshare accommodation by renting and not taking on the lifelong burden of ownership. Let's be honest. It's hard to give these things away. Most of the hardcore owners on this board would jump at the chance to give some weeks away for a dollar. It sucks, but it's true.

Add your comment to my posting in Tug BBS entitled “time share owner advice?” Be ready to be flamed and harassed.

 

[cman]

Add your comment to my posting in Tug BBS entitled “time share owner advice?” Be ready to be flamed and harassed.

I saw that thread and posted to it before it took a downward spiral. The earlier posts were informative, but when the personal attacks against the OP started, I lost interest in the discussion.