The Biggest Timeshare Scam

[AwayWeGo]

Timeshare Annual Fees Mean That Timeshare Ownership Is Not Prepaid Vacation.

Can you pay cash and do you realize you are simply buying pre-paid vacations that save you money in exchange for a lack of flexibility over cash?

Au contraire, mon frere.

Buying a timeshare is not the equivalent of buying prepaid vacations.

Even if you get your timeshare for next to nothing, you still have to pay all those recurring obligatory annual maintenance fees & taxes & reserve payments.

Those never-ending annual fees are the true cost of timeshare vacationing.

But people who save thousands by buying resale can cover years & years of annual timeshare fees & still stay way ahead of the game compared with paying full freight for a "new" timeshare that in reality is used-used-used by the time anybody shows up & checks in.

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

 

[rickandcindy23]

We toured Sunterra/ Diamond (whatever it's called now, but it's always going to be the Embassy to me) Kaanapali resort 20 months ago.

The sales staff knew we owned lots of weeks, yet the two men kept saying something about 20 years of vacations divided by $20K is only $1,000 for a gorgeous annual week on Maui. I kept saying, "What about maintenance fees?" They IGNORED me!

To me, that is a blatant misrepresentation of the product they are selling and the true cost of those 20 weeks.

They lied to US, and we are expert-ish at timeshare!

I feel sorry for those who are led to believe the lies they tell.

And I won't even go into the interest rates on the purchase, which were ghastly and also added to the cost. No discussion of the $10K in interest as part of the cost of ownership, either.

 

[PerryM]

Au contraire, mon frere.

Buying a timeshare is not the equivalent of buying prepaid vacations.

Even if you get your timeshare for next to nothing, you still have to pay all those recurring obligatory annual maintenance fees & taxes & reserve payments.

Those never-ending annual fees are the true cost of timeshare vacationing.

But people who save thousands by buying resale can cover years & years of annual timeshare fees & still stay way ahead of the game compared with paying full freight for a "new" timeshare that in reality is used-used-used by the time anybody shows up & checks in.

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

Well on the chance I'm not clear let me recap what I said in my last post (#75):


1) Yearly rent * 20 or 30 vacations (Found Opportunity price)

2) MF of $800 per year +5% compounding for 20 or 30 years (Negative number)

Total both to come up with the cost of paying out of pocket costs.


One can go further and take the rent and add 5% compounding too if they want - that's what I do.

Add both numbers together and they MUST be DOUBLE the cash payment price of the unit. MF's are included in the other number.

OR

If you want:

Rental rate * 30 years >= Purchase Price + MF*30

Leave inflation out of both sides. The larger the difference the more the timeshare can be justified.

 

[UWSurfer]

We toured Sunterra/ Diamond (whatever it's called now, but it's always going to be the Embassy to me) Kaanapali resort 20 months ago.

The sales staff knew we owned lots of weeks, yet the two men kept saying something about 20 years of vacations divided by $20K is only $1,000 for a gorgeous annual week on Maui. I kept saying, "What about maintenance fees?" They IGNORED me!

To me, that is a blatant misrepresentation of the product they are selling and the true cost of those 20 weeks.

They lied to US, and we are expert-ish at timeshare!

I feel sorry for those who are led to believe the lies they tell.

And I won't even go into the interest rates on the purchase, which were ghastly and also added to the cost. No discussion of the $10K in interest as part of the cost of ownership, either.

When you look at a home, your agent doesn't sell you on the taxes, home owners association dues and upkeep costs, they sell you on the features of the home, the location and then you negotiate the price. While I completely agree that you MUST factor in the MF's costs of any acquisition, it might be a bit unfair to slam TS sales for excluding it from their sales presentations when it's not part of any other real estate presentation either.

 

[JMAESD84]

When you look at a home, your agent doesn't sell you on the taxes, home owners association dues and upkeep costs, they sell you on the features of the home, the location and then you negotiate the price. While I completely agree that you MUST factor in the MF's costs of any acquisition, it might be a bit unfair to slam TS sales for excluding it from their sales presentations when it's not part of any other real estate presentation either.

I couldn't disagree more with your statement.

When the timeshare sales approach is to compare the relative cost of timeshare ownership and use versus the cost of vacation rentals, it is extremely fair to expect that all related costs be included in the comparison. Especially, a cost as significant, perpetual and unaviodable as maintenance fees.

The "timeshare trap" is all about being locked into a never ending and unavoidable maintenance fee. One that can easily render your timeshare ownership worthless and unsaleable.

 

[jdb0822]

I recall years ago touring a timeshare in Orlando, and they were looking for $25,000 for a week in a 2-bedroom unit. I told the sales rep that would mean that unit was worth $1.3 million dollars (52 weeks x 25,000).

As nice as the unit was, it surely wasn't worth $1.3 million, plus the additional $30,000 a year to maintain it (52 weeks of maintenance fees).

I am very curious to know just how much these sales guys get paid to push these things....

 

[PerryM]

I recall years ago touring a timeshare in Orlando, and they were looking for $25,000 for a week in a 2-bedroom unit. I told the sales rep that would mean that unit was worth $1.3 million dollars (52 weeks x 25,000).

As nice as the unit was, it surely wasn't worth $1.3 million, plus the additional $30,000 a year to maintain it (52 weeks of maintenance fees).

I am very curious to know just how much these sales guys get paid to push these things....

Timeshare developers' price their units FOUR (4) times the real estate worth. Add up the price for weeks 1 - 50 (allowing 2 weeks for cleaning and maintenance) and that should be 4 times their purchase price.

In this case the condo should appraise at $325k.

If you do the same for resales week 1 - 50 it will be $650k.

There is a premium for busting up a condo and only using it a week at a time.

P.S.
Their top salesreps probably make $250k a year with little trouble. I can only guess at the medium salary for a timeshare salesrep; probably $80k if I had to guess.

 

[AwayWeGo]

Any Way You Shake It, Timeshares Are Still Not Prepaid Vacations.

The larger the difference the more the timeshare can be justified.

I personally cannot justify any timeshare that requires laying out more than the cost of Motel 6 & Super 8. But that's my problem.

Others are welcome to pay full freight for big bux timeshares according to their own personal comfort levels backed up their own calculations of value. It's obviously no skin off my nose.

Meanwhile, my point -- largely echoed by other participants in this topic of discussion -- is that buying a timeshare is not buying prepaid vacation accommodations.

If you think otherwise, see what happens when you show up at the check-in desk after skipping your annual maintenance fee payments. If nothing else, it's 1 way of getting a quick education in the practical difference between lock-off & lock out.

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

 

[JLB]

No, they were not lying, not by industry standards.

After 20 years your initial investement will have grown by the same increment as the increase in the prices they have been selling at. They know that to be true because they know that the prices they have been selling at have been increasing.

And, since it is industry practice to disregard resale altogether, as if it doesn't exist, you are thereby disallowed from the position that that might not be true.

However, where they were incorrect is that the cost of your annual vacation would actually be that year's maintenance, since it is as if your inital investment did not happen, it being safely tucked away for the future.

We toured Sunterra/ Diamond (whatever it's called now, but it's always going to be the Embassy to me) Kaanapali resort 20 months ago.

The sales staff knew we owned lots of weeks, yet the two men kept saying something about 20 years of vacations divided by $20K is only $1,000 for a gorgeous annual week on Maui. I kept saying, "What about maintenance fees?" They IGNORED me!

To me, that is a blatant misrepresentation of the product they are selling and the true cost of those 20 weeks.

They lied to US, and we are expert-ish at timeshare!

I feel sorry for those who are led to believe the lies they tell.

And I won't even go into the interest rates on the purchase, which were ghastly and also added to the cost. No discussion of the $10K in interest as part of the cost of ownership, either.

 

[chs4]

When the timeshare sales approach is to compare the relative cost of timeshare ownership and use versus the cost of vacation rentals, it is extremely fair to expect that all related costs be included in the comparison. Especially, a cost as significant, perpetual and unaviodable as maintenance fees.

I'm still not buying it.

I don't think it's up to the TS salesperson to detail every associated cost any more than it's up to a car dealer to disclose information about excise taxes, registrations and the fact that you need to put gas in it to make it keep running. If the buyer doesn't bring it up, why offer it?

Should TS salespeople be educating the consumer on exactly what a timeshare involves and all of the pros and cons? In a perfect world maybe, but at the end of the day their job is to sell timeshares and maximize profits for the developer or the corporation that pays their salary.

I just Googled 'buying a timeshare' and came up with 390,000 pages. Certainly if I were thinking of buying I would do at least this much research and familiarize myself with the basics of the TS concept. Hell, I just used Google's "I'm Feeling Lucky" button on that search phrase and the page I came to had a FAQ right there on the front page about buying a timeshare. A grand total of 10 minutes reading would arm you with enough information to ask the proper questions during a presentation and not get "tricked" into the "timeshare trap".

It's also interesting to note that when Googling 'buying a timeshare', the first page of search results contains links to (5) resale companies, (2) sites warning about possible scams & how to protect yourself and (1) link to TUG. The resale market is not exactly hidden. The information is out there and is as plain as day. If the public doesn't wish to become the least bit informed before committing several thousand dollars to a TS, well, they stand a good chance of paying more than they probably should.

 

[JLB]

At the resorts I am most familiar with, the sold-out resorts of SW FL, weeks sell for the actual real estate value, or perhaps a little less. That is, of course, resale.

Sometimes discussions of this nature drives home how much ugliness there is in the world (at least to me) and it really gets to me. How some are predators and some are prey. How some are takers and some are givers.

 

[PerryM]

I personally cannot justify any timeshare that requires laying out more than the cost of Motel 6 & Super 8. But that's my problem.

Others are welcome to pay full freight for big bux timeshares according to their own personal comfort levels backed up their own calculations of value. It's obviously no skin off my nose.

Meanwhile, my point -- largely echoed by other participants in this topic of discussion -- is that buying a timeshare is not buying prepaid vacation accommodations.

If you think otherwise, see what happens when you show up at the check-in desk after skipping your annual maintenance fee payments. If nothing else, it's 1 way of getting a quick education in the practical difference between lock-off & lock out.

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

I include the yearly MF in my decision question to folks who need someway to analyze the purchase decision.

Of course I want to most bang for the buck so I use all the tricks I've learned in 8 years of timeshare ownership.

Quite frankly I don't want to pay Motel 6 rates when I can stay at something 4 times as large, full kitchen, washer/drywer and separate bedrooms for less than a Motel 6.

But for someone who doesn't own a timeshare we can't seriously expect them to replicate our performance. Give them a couple of years and make a few mistakes and they might want to do what many of us do here - stay at 5-star resorts for less than Motel 6 prices.

 

[Steamboat Bill]

The title of the thread is what is the biggest timeshare scam and I think it is:

Bait and Switch via the allure of a free gift.

 

[JLB]

Oops, it's not Saturday. It sure felt like it.

It's also no longer morning and no longer dark and gloomy. It's, in fact, a beautiful day at the lake!

It must be a dark and gloomy Saturday morning there, just like in Branson and St. Louis.

 

[JLB]

No bait, no switch.

The title of the thread is what is the biggest timeshare scam and I think it is:

Bait and Switch via the allure of a free gift.

 

[JMAESD84]

I'm still not buying it.

I don't think it's up to the TS salesperson to detail every associated cost any more than it's up to a car dealer to disclose information about excise taxes, registrations and the fact that you need to put gas in it to make it keep running. If the buyer doesn't bring it up, why offer it?.

It's more like when the buyer brings it up, ignore it and change the subject.

Should TS salespeople be educating the consumer on exactly what a timeshare involves and all of the pros and cons? In a perfect world maybe, but at the end of the day their job is to sell timeshares and maximize profits for the developer or the corporation that pays their salary.

I just Googled 'buying a timeshare' and came up with 390,000 pages. Certainly if I were thinking of buying I would do at least this much research and familiarize myself with the basics of the TS concept. Hell, I just used Google's "I'm Feeling Lucky" button on that search phrase and the page I came to had a FAQ right there on the front page about buying a timeshare. A grand total of 10 minutes reading would arm you with enough information to ask the proper questions during a presentation and not get "tricked" into the "timeshare trap".

It's also interesting to note that when Googling 'buying a timeshare', the first page of search results contains links to (5) resale companies, (2) sites warning about possible scams & how to protect yourself and (1) link to TUG. The resale market is not exactly hidden. The information is out there and is as plain as day. If the public doesn't wish to become the least bit informed before committing several thousand dollars to a TS, well, they stand a good chance of paying more than they probably should.

While I agree with your reasoned response, it is not a compassionite one. Hopefully those that get taken to the cleaners are not loved ones of yours. Keep in mind that they are someones loved ones.

I believe in a capitalist society and think it's reasonable for those that take risks in business endeavors to make a reasonable profit. Unfortunately, for most of this industry the developers sales methods often involve the misleading and fleecing of the customer and go far beyond making a reasonable profit.

In our free market society someone is always getting a better deal than someone else and as the saying goes a fool and his money will soon be parted. This industry seeks to make fools of everyone that takes the tour.

 

[JLB]

http://www.timeshareforums.com/foru...02-talking-people-out-ts-purchase-resort.html
- - - - - -
PS: If someone said that it did not bother them that they paid $25K for something I got for $1 on eBay, I would not trust anything else they say either!

 

[Larry]

Au contraire, mon frere.

Buying a timeshare is not the equivalent of buying prepaid vacations.

Even if you get your timeshare for next to nothing, you still have to pay all those recurring obligatory annual maintenance fees & taxes & reserve payments.

Those never-ending annual fees are the true cost of timeshare vacationing.

But people who save thousands by buying resale can cover years & years of annual timeshare fees & still stay way ahead of the game compared with paying full freight for a "new" timeshare that in reality is used-used-used by the time anybody shows up & checks in.

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

I have factored in the cost of annual maintenance fees as well as my initial costs ( all resales) and save a minimum of $1,000 every time I vacation. I have tracked this for over 12 years and lately my savings plus quality of vacations are far in excess of $1,000 per week. First off maintenance cost is now $0 net for me every year. We own 8 weeks and rent out four weeks which not only pays for all 8 weeks but actually leaves me with a profit. So 4 weeks of vacation at this point costs me my exchange fee, transportation and whatever we spend while on vacation for food and activities.

Let's just look at our vacation for this December. I have checked with AA and although tickets to St. Lucia for December are around $654 pp I can use FF miles for two free tickets. You could say I could have done this without timeshare but when I did that I couldn't take advantage of package deals for air plus accommodations and would pay whatever it cost for the hotel only on the internet through Hotels.com or a host of other websites.

We are staying at Windjammer Landing in a 2BR villa with private plunge pool. Cost through Hotels.com would have been about $480 per night plus tax for a total of $3,950 for seven nights. I never would have booked this without the benefits of owning timeshare and even a hotel room at Windjammer is over $200 per night with tax. This is for hotel only and we are not obligated to the AI fee. Quality of vacation for a 2BR villa for the exchange fee of $199 is something I could only of dreamed about without timeshare. Again my maintenance is covered for all of my exchanges through my rentals and I paid less than $1,000 for the timeshare I used for this exchange including all closing costs. Furthermore by combining FF miles with timeshare I am making out like a bandit.

Is timesharing for everyone No. Does it meet my needs? Absolutely. Is it getting more difficult getting these great exchanges? Yes. But I am patient, flexible and willing to spend the time necessary to make this work. Oh and is it a pain to do these searches? Absolutely not, I love hunting for great vacations and doing the necessary research to get what I want, when I want it while being somewhat flexible at the same time. We have exchanged into Morritts Grand 2BR villa, The Grand Mayan Acapulco 1BR with plunge pool on Balcony. Sandals Grande, French Riviera, Rome, Marriott vacation club, Westin Kierland Resort etc. etc.

Scam not for me, it's worked very nicely. Thank you very much to everyone who has bought into these great resorts at developer prices giving us Tuggers our great vacations.

 

[Jya-Ning]

Today JP morgan purchase Bear Stern with $2 per share offer which they gladly accepted. Bear Stern close on Last Friday with over $30 per share. The company say they have $84 value per share based on their book.

I guess TS salesman will not feel that guilty.

Jya-Ning

 

[cancun dish]

mfees

if you follow the hotel/motel industry about 60-70% of their rates are paying for things that us timeshare owners relate to maintenance fees.

Thus if we vacation we are paying maintenance fees. I love maintenance fees at the resorts that I own at.

I know that at my house alone with taxes, electricity, insurance, lawn care, pool care etc. I am at over $200 per week and that is with no staff etc.

The number seems ridiculous but, if you really work out the numbers it becomes quite reasonable (in my opinion) of course I own two one-bedrooms and both are under $425.

 

[JLB]

Hi Mr. Dish

Few here will be opposed to maintenance fees, except for those really ridiculous ones where folks are obviously just feeding someone's cash cow.

Unlike the initial investment, where there is typically a choice between a really high one and a just-about-zero one, there isn't a choice when it comes to annual fees, except the choice to get rid of the high ones.

Wouldn't it be nice if there was a secondary market for annual fees too!

if you follow the hotel/motel industry about 60-70% of their rates are paying for things that us timeshare owners relate to maintenance fees.

Thus if we vacation we are paying maintenance fees. I love maintenance fees at the resorts that I own at.

I know that at my house alone with taxes, electricity, insurance, lawn care, pool care etc. I am at over $200 per week and that is with no staff etc.

The number seems ridiculous but, if you really work out the numbers it becomes quite reasonable (in my opinion) of course I own two one-bedrooms and both are under $425.

 

[mikenk]

It seems to me that if you are actually using or renting the timeshare, or exchanging for one, where the rental for vacations is quite a bit higher than the MF, then you are in a good position. If on the other hand, the MF is the same or higher than the cost of renting the same place on the open market, then it is time to get out. What would be the point in holding on to it regardless of what you paid for it.? Am I missing something?

i just bought a Grand Mayan TS on resale; the former owner sent me his contract, it states that after 5 years (in 2010), there will be no maintenance fees if I don't use the week. Is this common? I plan on using it yearly, so it really is not a big deal, but it surprised me (pleasantly) to see that stipulation.

Mike

 

[JLB]

Not missing anything that I know of.

Just google blank timeshares for rent, blank being where you want to vacation, like, say Orlando, and choose from a jillion or so, give or take a smidge, many for the amount of maintenance fees.

The more timeshares that get sold in the glut areas, the more there are to rent at around the annual fee. It seems to feed off itself, in circles.

I've purchased a couple lately that I would gladly rent for the annual fee. Prime weeks in a major destination, too.

If on the other hand, the MF is the same or higher than the cost of renting the same place on the open market, then it is time to get out. What would be the point in holding on to it regardless of what you paid for it.? Am I missing something?