I'm new to time sharing and my wife and I sat through our first presentation about a month ago. I've been looking around this board off and on since then. Ok, If you buy there will always be the annual MF. Are the MFs that much lower than what you can rent a week for to make a purchase worth it? Am I missing something?
The developer made it sound like a no brainier: Buy! He actually called it a 401V(btw, there is no such section in the code
) and a way to lock in our future vacation costs.
Any thoughts/insights would be appreciated. Thanks!
Understand that like most things in life no one answer to your questions will apply in each and every situation - there are a few limited and specific exceptions to the general rules. But in most cases - and this applies in spades to new comers to the timeshare world - nothing is as straightforward and simple as the retail timeshare sellers want you to think.
Reserving or trading for a timeshare unit is NOT like making a hotel reservation. It requires careful planning and timing to obtain exact dates, units and resorts. The sellers invariably downplay or fail to mention the annual fees, which you appear to aware of, while acting like your hefty upfront cost has somehow paid for a lifetime of luxury stays. In fact that purchase cost has bought you nothing except the right to pay annual fees and any special assessments for the right to use set week or a quantity of points - and you'll likely never see 10 cents of that money back. It is lost, paid only to the developer not the resort Association - paying it for any resort is money lost. Your goal should always be to minimize that amount, usually through a resale / free sale, as paying more gets you nothing.
So why buy vs rent? In the past few years it has become all too clear that purchasing a timeshare, even resale, may not make sense. There are simply too many out there for sale and/or rent. Supply of both sales and rentals far exceed any demand. It has become so bad that with an extremely limited handful of exceptions - a few holidays, a couple weeks of seaside summer - you can practically pick your resort/time/view by renting far easier than an owner can or through trade. Plus the cost of renting is much less than owning outright and way below the cost of annual fees and the excessive costs of an exchange company plus fees.
The only reason to buy today is because you want to use the resort or points system and you don't care if that costs a few extra dollars. It is a mistake to think you'll rent your ownership for a profit or trade to better (or even equal) to wha you own cheaper than renting - again it takes years of trial and error (and in most cases purchases from a decade or more ago) to learn how to make a few dollars or even breakeven on timeshare ownership. The pro's here have in some cases managed to make a few bucks but even those are few and far between. Recognizing the rare, exact time/resort that can reliably rent for a profit and finding renters is much harder than you can imagine. It is NOT a viable plan that a quick purchase of resort X or Y for little or nothing (or a mistaken purchase at tens of thousands of retail dollars regardless of brand name or location) will make a novice an easy profit. In fact it will practically guarantee a terrible experience and yet another timeshare in the endless list of deeply discounted/free offers that we are buried in.
That doesn't even consider things like who controls the Association (NEVER buy a developer controlled resort/system), how reserves can impact the process, cheap rentals from "exchange" groups that undercut the annual fees and ruin any rental value for owners, and much more. And of course we have the overwhelming crush of resale offers in a non-existent marketplace that has depressed any resale value at virtually every resort to a giveaway at best - a cost to dispose of at worst.
Timesharing is great way to enjoy a large, usually upscale vacation experience in a resort setting. But it has to be done at resale if you buy to get a true value out or just rent. There are no signs that this situation will change anytime in the near future as despite a depressed economy and the flood of cheap/free existing timeshares developers continue to sell - at tens of thousands of dollars - basically worthless "new" ownerships that are nothing but a millstone the minute the rescind period ends. They continue to add to the large disillusioned group looking to free themselves from often growing annual fees and lost purchase costs. The new buyers are lured in with promises that are misrepresentations at best and outright lies in many cases - all subject to the official paperwork that manages to disavow anything except what appears in the massive verbiage few read before it is far to late to get out.
Why buy? Because like any real estate you might consider you want to use it all the time you can, you can afford it and you feel the annual costs make it a value to YOUR USE. And you can buy it inexpensively or take it for free. Except for that situation my strongest advice is NEVER buy a timeshare unless you know all the pitfalls but still feel you can beat the overwhelming negative odds of ownership satisfaction.