Rent or Buy? How you decide?

[prajora]

Wondering if there is a good way one can analyze if it worth Buying a TS vs. Renting a TS?
I assume the usage is the key. If you use the TS a lot in long run it is better to Buy. Just like Buying a Home vs Renting a Home. For most part one difference is in TS, you don’t build much equity. Experienced TS owners must have done this analysis many times. Like to get their view. Thanks

 

[bnoble]

There are three factors for me in this.

The first is also the most obvious: cost. What are typical rental rates for the area/seaosn/size I am considering, and what does it cost to own it? For most resale timeshares, the ownership cost is pretty easy to figure out, because the acquisition cost is either zero or small enough that you can just fold it into the first year's fees and make the call. For those with non-trivial purchase prices, it gets a little trickier. I amortize it over a 7- to 10-ish year window, assuming zero residual value, at a "reasonable" interest rate of around 5%. You can quibble with the amortization horizon and the interest rate, but it usually doesn't change much.

The second is a qualitative question in favor of ownership: how much time is it to find a good rental, and how much of that will I save by owning? Renting requires searching--and often repeating that effort each year because the place you rented last time is no longer offered/much more expensive/whatever. Owning is usually simpler and that time saved is worth something.

The third is a qualitative question in favor of renting: how likely is it that I will use this ownership as it is every year for the next 10-ish years, minimum. This does not include external exchange. If it is a fixed or floating week, that means staying at that resort every year. If it is a mini-system, that means only using an internal booking. If I'm not sure about future preferences, then owning is a liability because there is friction in using it in any other way. That friction might be in the form of exchange fees and time spent managing the exchange process. It might instead be in finding someone to rent it from me. In the worst case, it might be in the form of an unused week. In contrast, nothing is more flexible than renting with cash, because if you decide you don't want to do that anymore, you can just do something else with the money.

 

[bnoble]

Ultimately, though, the real question is: "Do I want to commit myself to one more week per year of vacation lodging or not?" Owning timeshare probably never saved anyone money, even if owning was a really good deal. That's because as an owner you are probably taking more vacations than you would otherwise.

I happen to think that's one of the great benefits of owning: it acts as an incentive for me to take more vacations, because part of the costs of doing so are already paid. But, it might not be a benefit for everyone.

 

[prajora]

Ultimately, though, the real question is: "Do I want to commit myself to one more week per year of vacation lodging or not?" Owning timeshare probably never saved anyone money, even if owning was a really good deal. That's because as an owner you are probably taking more vacations than you would otherwise.

I happen to think that's one of the great benefits of owning: it acts as an incentive for me to take more vacations, because part of the costs of doing so are already paid. But, it might not be a benefit for everyone.

I agree with this. Same experience. TS ownership is only good if you want the excitement of taking more vacations and also also better facilities

 

[Cecile Boisvert]

Wondering if there is a good way one can analyze if it worth Buying a TS vs. Renting a TS?
I assume the usage is the key. If you use the TS a lot in long run it is better to Buy. Just like Buying a Home vs Renting a Home. For most part one difference is in TS, you don’t build much equity. Experienced TS owners must have done this analysis many times. Like to get their view. Thanks

I can’t think of a single reason why buying a timeshare would be better than renting a timeshare, even if you purchase one on EBay for $1...
when you add all the various costs , it is no longer an economical option for your vacation.
Maintenance fees, booking fees, membership fees, you name it...when you add all this up, you can conclude that you are usually better off renting . There are so many rental platforms nowadays...
plus you don’t have to book a year in advance and you can find better last minute deals if you are not in the TS system.
my two cents anyways (I have owned 3 timeshares for more than 10 years - bought on EBay).

 

[montygz]

Wondering if there is a good way one can analyze if it worth Buying a TS vs. Renting a TS?
I assume the usage is the key. If you use the TS a lot in long run it is better to Buy. Just like Buying a Home vs Renting a Home. For most part one difference is in TS, you don’t build much equity. Experienced TS owners must have done this analysis many times. Like to get their view. Thanks

Owning benefits:

1. Sometimes it can be cheaper. But that can depend on the strength the rental market and where and how often you travel.
2. Control. You control your reservation and aren't dealing with someone you don't know that you are renting from. One of the factors that helps keep rental rates lower is that many people are suspicious of renting from a stranger. When I've recommended renting to others, some of them have looked at me like I was crazy. Book a resort on Ebay? Are you nuts?
3. The "browsing factor." It's easy to browse through available units to find something that catches your eye. Sometimes you can get a great last-minute deal. Some resorts aren't as popular or easy to rent.

The No. 1 factor with timeshare ownership is using your timeshare. If you get good use out of your timeshare ownership, you'll be happy. If you don't use it, you'll likely become disillusioned and angry over paying the never-ending maintenance fees.

 

[rjwehr]

I would concur with the comments above, you have to use it every year. We only buy where we want to return year after year. (A summer week on the beach in Florida/Ski-in Ski-out week in Colorado for Spring Break.) For us, it's more of a peace of mind decision than a financial one, even though our MF's are low and we only buy resale. We had been trading since the late '80s and went many places but we quit exchanging in 2008. As the timeshare market changed from weeks to other options, the overhead expenses for RCI kept going up and the exchange options really thinned; it made more sense to rent most of the time and only buy where we want to return year after year. We prefer fixed weeks so we're not competing with other owners for reservations on high demand seasons. Just my 2 cents

 

[CalGalTraveler]

I can’t think of a single reason why buying a timeshare would be better than renting a timeshare, even if you purchase one on EBay for $1...
when you add all the various costs , it is no longer an economical option for your vacation.
Maintenance fees, booking fees, membership fees, you name it...when you add all this up, you can conclude that you are usually better off renting . There are so many rental platforms nowadays...
plus you don’t have to book a year in advance and you can find better last minute deals if you are not in the TS system.
my two cents anyways (I have owned 3 timeshares for more than 10 years - bought on EBay).

While you are correct in many situations there are exceptions. For example, Westin Kaanapali Maui OF North EOY $12,500 - $13,000 to buy resale. MF are expensive at $2800/month, however rentals for same unit are north of $5000. Therefore not a better choice to rent.

On top of that the units can be locked off. Rent one side to pay for the other MF. Or get two weeks in HI in a 1 bdrm and studio in oceanfront for $1400/week. Good luck finding a Westin quality Maui oceanfront to rent during whale season or summer for that amount of rent.

Full disclosure. This is what we own. Still holding value despite pandemic so when we are done we will have equal or some residual value because these are desirable timeshares. This one is definitely better to own vs. rent if you know you will be visiting Hawaii every other year. This unit is not a trader. More profitable to rent it out and use the cash to rent elsewhere.

 

[AJCts411]

I can’t think of a single reason why buying a timeshare would be better than renting a timeshare, even if you purchase one on EBay for $1...
when you add all the various costs , it is no longer an economical option for your vacation.
Maintenance fees, booking fees, membership fees, you name it...when you add all this up, you can conclude that you are usually better off renting . There are so many rental platforms nowadays...
plus you don’t have to book a year in advance and you can find better last minute deals if you are not in the TS system.
my two cents anyways (I have owned 3 timeshares for more than 10 years - bought on EBay).

I think this depends on where the timeshare is and how you use it. We bought so we could continue to afford going to Key West as the cost of rentals continues to increase rapidly. The old town location is very hard to trade into. Our initial investment, bought reasonably at resale, and the prox. $265 per night (x7 nights) for a two bedroom had a ROI of 3-4 years. Today with the covid travel playing a part, two bedroom will easily run you $600 per night on slow week. We do plan on continue using our weeks and when renting out, brings a nice amount over the maintenance fees. Bonus is that the weeks retain some value, it is very possible we will recover all of our initial purchase price.

 

[Cecile Boisvert]

I think that there is an exception to what I previously wrote: If you own a specific week at a specific resort and you keep using that week every year For many years: this might be more economical than renting.
there are people who have owned for many years and still enjoy going to the same resort every year.
But who does this? A minority of timeshare owners...
If the idea is to be in the TS system to travel around and try different places, with points or exchanges, owning a TS no longer is better than renting.
The « point systems » are more widespread and points are not better than rentals for sure.
If I think of a first time buyer buying a timeshare in 2021, I do think that it is not a good option.

 

[CalGalTraveler]

I think that there is an exception to what I previously wrote: If you own a specific week at a specific resort and you keep using that week every year For many years: this might be more economical than renting.
But who does this? A minority of timeshare owners...Nowadays, the « point systems » are more widespread and points are not better than rentals for sure.

It depends where you go and the system. Almost any trades into 4 star hotel branded Hawaii (MVC, HGVC, Hyatt) via points or II is significantly better to own vs. rent.

Many if not most HGVC owners do not use their home resort but use the points attached to their unit. We pay about $1000 for 7000 points in HGVC Vegas. We trade those points in the HGVC system for 2bdrm Oceanfront Hawaii at Hilton Hawaiian Village which rents for $5000+/week during prime season -(if you can even find one to rent). A big benefit of using these points vs. renting.

Although there might be last minute and off season rental deals, this trade is something we can get without wasting hours hunting and pecking on the internet and having to pay deposit fees upfront with a 30 day cancel change.

 

[Cecile Boisvert]

It depends where you go and the system. Pretty much any trades into4 star hotel branded Hawaii (MVC, HGVC, Hyatt) via points or II is much better to own vs. rent.

Many if not most HGVC owners do not use their home resort but use the points attached to their unit. We pay about $1000 for 7000 points in HGVC Vegas. We trade those points in the HGVC system for 2bdrm Oceanfront Hawaii at Hilton Hawaiian Village which rents for $5000/week for the same unit. A big benefit of using these points vs. renting.

Although there might be last minute and off season rental deals, this trade is something we can get without wasting hours hunting and pecking on the internet and having to pay deposit fees upfront with a 30 day cancel change.

Agreed...but can you go or would you want go to Hawaï every year?
There is nothing wrong with doing that of course - if you can afford it it is great (flying to Hawaii is not that cheap either)
But the initial question was : is it better to buy or rent a timeshare..
The rental offers on a multitude of platforms are more varied yet not more expensive in the long run...

 

[CO skier]

The « point systems » are more widespread and points are not better than rentals for sure.

It depends.

I spent five weeks last summer in a spacious 1 bedroom condo with full kitchen, living room and deck (with grill) overlooking the Pacific Ocean for $640/week using my WorldMark points account. I woud not know where to begin to look for five consecutive weeks to rent.

Then 5 nights in a spacious West Yellowstone WorldMark condo a few block from the west entrance to Yellowstone -- $100/night. A rental of the same quality would have been double, at least.

5 nights in a 3 bedroom/3 bath condo for some Spring Break skiing -- an unbelievable bargain at $135/night using my WorldMark points.

Learning how to use a points-based timeshare can pay big dividends versus renting. Plus there is no stress about, "Will I really have a reservation when I arrive, or was I the victim of a rental scam?"

 

[Cecile Boisvert]

It depends.

I spent five weeks last summer in a spacious 1 bedroom condo with full kitchen, living room and deck (with grill) overlooking the Pacific Ocean for $640/week using my WorldMark points account. I woud not know where to begin to look for five consecutive weeks to rent.

Then 5 nights in a spacious West Yellowstone WorldMark condo a few block from the west entrance to Yellowstone -- $100/night. A rental of the same quality would have been double, at least.

5 nights in a 3 bedroom/3 bath condo for some Spring Break skiing -- an unbelievable bargain at $135/night using my WorldMark points.

Learning how to use a points-based timeshare can pay big dividends versus renting. Plus there is no stress about, "Will I really have a reservation when I arrive, or was I the victim of a rental scam?"

View attachment 34929

Nice! (I miss travel so much!)
But It is also very easy to find rentals on AirBnB for stays longer than 7 days...I just booked a whole house for 10 days, at $128 a day in a very nice area and with only one month notice. Three bedrooms two bathrooms, full kitchen etc....
But my point is not to say that this is better than timeshares. My point was just that buying a timeshare is not more economical than renting a timeshare or renting any kind of vacation rental...

 

[elaine]

I do not equate AirBnB with a timeshare or hotel. I'd be fine in a corp rental/apt that's professionally managed--for everything from cleaning to fire safety to pest control. But, I do not want to stay in someone's personal home that I do not know. Too many unknowns, IMHO. For ex, my coworker rented his well-located DC brownstone on AriBnB. Bedrooms did not have locks on doors. He had a key code for entry--don't think he changed it after each tenant. He never told his insurance carrier that he was renting it out. I asked him, "what if XXX happens?" He's a nice guy, just never thought about any of that.

 

[CalGalTraveler]

Agreed...but can you go or would you want go to Hawaï every year?
There is nothing wrong with doing that of course - if you can afford it it is great (flying to Hawaii is not that cheap either)
But the initial question was : is it better to buy or rent a timeshare..
The rental offers on a multitude of platforms are more varied yet not more expensive in the long run...

I kindly disagree. You cannot extrapolate your situation to mine and you cannot generalize to every situation. This is real estate with pockets of value. We own an EOY Oceanfront on Maui ($2700 MF vs. $5500+ to rent). An EOY takes the pressure off of an annual to go every year. However, with the exception of last year with Covid we have been going every year to HI with a combination of systems/points. The resale prices have held with Covid so when we want out we will simply sell and get all, if not most, of our capital back.

So yes, if you like to stay at 4* accommodations in prime season, it is cheaper to own than to rent in Hawaii. We live in California so tickets/points companion passes on Southwest are inexpensive (which is besides the point because you still need to get there with renting).

If we don't go we can rent out the Maui or lockoff for $2500 - $5500+ (a profit of up to $2700 over MF) or we can use the HGVC and Staroption points to drive/fly within the systems. Still a much better deal.

 

[CalGalTraveler]

When we travel we like to stay at resorts with the pools and amenities right on the beach and know the quality of the accommodations. We've stayed at AirBnBs. If you are fine with few/no amenities, varying cleanliness and quality, and locations off the beach then AirBnB may be a better choice. I don't want to risk our limited vacation time on an AirBnB which was not as pictured (and we have stayed at some of those). Sure there are nice ones but I don't want to figure it out. Also when you add the service fees and housekeeping AirBnBs can get quite expensive especially for short stays.

 

[Cecile Boisvert]

When we travel we like to stay at resorts with the pools and amenities right on the beach. We've stayed at AirBnBs if you are fine with few/no amenities, varying cleanliness, and locations off the beach then timeshares are more expensive.

well...my point is : renting is better than buying...you can rent beachfront timeshare...
But also, with the RCI points systems I have rarely been able to book these kinds of timeshare (unless you book one year in advance and still not easy to find unless in off season, like Florida during hurricane season )

 

[CalGalTraveler]

well...my point is : renting is better than buying...you can rent beachfront timeshare...
But also, with the RCI points systems I have rarely been able to book these kinds of timeshare (unless you book one year in advance and still not easy to find unless in off season, like Florida during hurricane season )

Maybe in Florida but not in Hawaii. (We don't travel to Florida - too far away and too humid.)

If your point was true, every TUGGER who owns would be stupid. TUGGERs are smart and find the gems in the haystack. We book using points in hotel branded mini-systems (such as HGVC and Vistana) in platinum season. We have been doing this every year with no problem.

In fact, I have been trying to add a rental to our July 4 week Maui reservation to add family. All the rental prices are crazy. Owning is about half the price.

 

[elaine]

IMHO cash definitely gives more flex, and you can find bargains, esp. now, but a TS can still work really well. We bought (resale) several summer beach weeks when our kids were young and went every year. Then when kids tired of the beach, we traded via RCI or II. I got the better bargain on virtually all trades: HGVC Hawaii, Marriott Surf Club Aruba, summer Banff, Bermuda, and DVC 5X. All were for much less than a rental (or even annual fees on those units). But, it was a fair amount of "work" managing our timeshares and committing a year or more out. So, I'm currently divesting a beach week. But, it was a great run for 15 years. No regrets (even paying a fair amount for resale in 2006). Still have a few left with which to snag some good trades!

 

[lkc1234]

well...my point is : renting is better than buying...you can rent beachfront timeshare...
But also, with the RCI points systems I have rarely been able to book these kinds of timeshare (unless you book one year in advance and still not easy to find unless in off season, like Florida during hurricane season )

I prefer owning over renting. I have several timeshares and have used them all. It has forced us to take more vacations than we would have otherwise. Which I think is a good thing. My first experience renting was with another couple several years ago. We saw an advertisement for a wonderful resort near the ocean in Hilton Head for a reasonable price. We sent our money and showed up and the resort was at best a 2 star with very few amenities. Our kids hated it and we stayed two days and left. I decided then I was going the timeshare route. I like knowing I will be staying in a quality resort with amenities for the kids and grandkids. I prefer paying a little more for the peace of mind if nothing else.

 

[Cecile Boisvert]

IMHO cash definitely gives more flex, and you can find bargains, esp. now, but a TS can still work really well. We bought (resale) several summer beach weeks when our kids were young and went every year. Then when kids tired of the beach, we traded via RCI or II. I got the better bargain on virtually all trades: HGVC Hawaii, Marriott Surf Club Aruba, summer Banff, Bermuda, and DVC 5X. All were for much less than a rental (or even annual fees on those units). But, it was a fair amount of "work" managing our timeshares and committing a year or more out. So, I'm currently divesting a beach week. But, it was a great run for 15 years. No regrets (even paying a fair amount for resale in 2006).

interesting - I think that the « weeks » system is far better than the « points« system. You can get better value in exchanges and if you don’t exchange, you get to use a TS that you know and like.
I have no regrets either - I did use my points for many years.
But I really think that no one should buy a timeshare in 2021 - travel options have evolved over the recent years and if you are new to TS, it is no longer the best option available.

 

[CalGalTraveler]

Actually if you really want to save money, stay home, staycation, and don't spend any money at all.

 

[Cecile Boisvert]

Actually if you really want to save money, stay home, staycation, and don't spend any money at all.

Okay...another thing I should do is stop arguing about timeshares...it is not cost effective
good day

 

[CalGalTraveler]

Indeed. Continuing to argue unsubstantiated statements and ignoring specific examples presented by others is not a good use of time.