Why are timeshares so cheap right now?!?!

[Matt702]

I am a new poster to the boards here, so forgive me if I am asking a question thats been discussed over and over recently. I have utilized the search function and found a bit of info why Timeshares are selling for next to nothing. With that said, I still wanted to ask the question to those seasoned vets of the Timeshare world, why are timeshares on the resale market going so cheaply? My wife and I are looking at investing in one after doing some good homework of course, however, I must admit when I see Timeshares say on EBay going for a $1..... I tend to think there is some hidden catch. Like why are owners willing to give all their points or weeks away for such a small amount?

I realize how economic times are and the bottom line could be that the MFs are just to much of a burden.... but am I missing something else. Seems to me, if my personal budget allows it and I can find the perfect Timeshare that can work for my family.... it would be a great deal to buy in to something, resale of course. Though, the cynic in me thinks there is a reason why so many timeshares on the resale market are going for pennies right now..... that reason being some bad investment or burden, lol.

 

[Stricky]

Timeshares have an ongoing liability factor in the form of annual maintenance fees. In this economy people are not traveling and are not happy about paying $500 to $1000 for a week they cannot use. So they decide to sell. Problem is everyone wants to sell. Supply is much higher than demand and hence the price drops.

You will find many of the $1 ebay sales do not even sell. Why buy an off season week at a no name resort when you can get a great resort and a decent week for close to nothing?

 

[teepeeca]

Matt702

Hello,

First of all, and this might be just "semantics", but purchasing a timeshare is NOT an "investment", unless y0ou are talking about a "family fun time" investment.

Usually, from a monitary standpiont, thimeshares "usually" do not make sense. That being said, "I" consider timeshares/timesharing a GREAT investment for my family. Have taken MANY great vacations.

Some (many?) people, right now, considering the economy, just feel that they no longer can afford the annual fees, or the ability to take vacations, to they just "want to get rid of the timeshare". It is (my opinion) a super time to purchase a timeshare right now, IF your financial status let's you do so.

Find one, or more, that you would like, and enhance your life with it.

Tony

 

[aliikai2]

Ssssh, everyone will hear you!!

For the last 6 months I have been buying bargains, and expect to for another few months.
I have seen an uptick in value is selected areas, have sold a few for a nice return, and am re-investing in more units awaiting a partial recovery.

I don't expect we will ever see the highs of the 2004-2006 era again, but like the DJI, a 60% increase over a 1 year period is just fine with us.

jmho,

Greg

 

[timeos2]

There is no secret or catch. Most aren't worth anything now

I am a new poster to the boards here, so forgive me if I am asking a question thats been discussed over and over recently. I have utilized the search function and found a bit of info why Timeshares are selling for next to nothing. With that said, I still wanted to ask the question to those seasoned vets of the Timeshare world, why are timeshares on the resale market going so cheaply? My wife and I are looking at investing in one after doing some good homework of course, however, I must admit when I see Timeshares say on EBay going for a $1..... I tend to think there is some hidden catch. Like why are owners willing to give all their points or weeks away for such a small amount?

I realize how economic times are and the bottom line could be that the MFs are just to much of a burden.... but am I missing something else. Seems to me, if my personal budget allows it and I can find the perfect Timeshare that can work for my family.... it would be a great deal to buy in to something, resale of course. Though, the cynic in me thinks there is a reason why so many timeshares on the resale market are going for pennies right now..... that reason being some bad investment or burden, lol.

To make the bottom line simple there are tens of thousands of sellers - most with timeshares that have very limited value due to seasonal use periods or resort unit size/quality and/or fees that aren't proportionate to the use/rental/trade value. There are also some gems that get dragged down nearly to the level of the dregs simply by the overwhelming volume of options for other resorts each potential buyer has. All suffer from the fact that it is extremely easy to purchase a timeshare week or a bunch of use points but very hard to resell it should you decide it isn't for you or the costs rise to a level that no longer give you value for the money spent.

It is the ultimate case of supply and demand. There is an incredible supply - which is still growing thanks to the never ending and still successful efforts of developers to sell to new buyers at outrageous levels - and a very finite pool of willing buyers. There may never have been such a buyers market known. Add in the fact that those sellers and owners have flooded the market with cheap rentals trying to recover at least a small amount of the fees they pay and the purchase price/ fee commitment value picture gets stretched to the breaking point. Again except for the best resorts and the best times which may still have some ability to command a premium rental price most timeshares rent below the annual cost of ownership.

All of which means if you want to enjoy a great resort experience in a luxury condo that timesharing offers be extremely picky on what you buy. You don't need to pay tens of thousands anymore to get the very top resorts or the best use times - in fact even the top of the top go for a few thousand or less as the annual fees there hold down what would otherwise be a higher selling price based on demand and resort quality. Everything is negotiable and as a buyer you hold all the cards. Buy what you like, where you want it and the size you will use. Buying to trade or rent is almost guaranteed to burn you now - it has always been a risk.

If you have an area/resort/system you want be aggressive and you should get a great deal. There has never been a better time to be a buyer or a worse time to be a seller. Enjoy yhr riches very carefully in anticipationnthat someday you'll be on the selling end and every penny you pay up front as purchase price is unlikely to be recovered. Look at the value for the annual fee as the only real measure that you can rely on. And remember - fees will likely only rise over time. Look for resorts that have a history of stable fees and improvements to have the best chance of keeping a good cost to use value going forward.

Good luck & happy shopping!

 

[Matt702]

Hello,

First of all, and this might be just "semantics", but purchasing a timeshare is NOT an "investment", unless y0ou are talking about a "family fun time" investment.

Usually, from a monitary standpiont, thimeshares "usually" do not make sense. That being said, "I" consider timeshares/timesharing a GREAT investment for my family. Have taken MANY great vacations.

Some (many?) people, right now, considering the economy, just feel that they no longer can afford the annual fees, or the ability to take vacations, to they just "want to get rid of the timeshare". It is (my opinion) a super time to purchase a timeshare right now, IF your financial status let's you do so.

Find one, or more, that you would like, and enhance your life with it.

Tony

Thanks for the replies guys..... and YES to clarify I meant "family investment". I do not think buying a timeshare is going to return a great financial investment back to me.....

 

[TUGBrian]

The average person has no idea the timeshare resale market exists.

 

[Courts]

I would add that "some" resorts have a problem with owners defaulting on their weeks and thus require a hike in maintenance fees for everyone else.

Starwood comes to mind.


.

 

[bellesgirl]

We have bought a couple of TSs in the last year for just the resort transfer fees ($100-$250). They are resorts we are familiar with at times we want to use them. They are also RTU which means they expire in a few years so they will not be a burden later when we no longer want to travel to these locations. Nor will they be a financial burden on our children. If you know what you want, now is a great time to buy.

 

[dougp26364]

It's the end of the year and MF's are due. People are attempting to dump unwanted timeshares before they have to pay another MF. Some are willing to sell at any price, including giving them away, just to not have to pay a MF that's due in another 3 to 8 week.

Right now we own 7 timeshares. I'm not to the point yet but, in a few more years, I could see giving away two of the 7 week own simply due to the fact we're not using them efficiently and the cost has grown to over $6,000/year.

We bought what we bought thinking that we'd eventually have grandchildren and could take family vacations. But that was poor planing on our part. The kids always want to take vacation but never can seem to afford to take the time off, request and get the time off or afford to get to the destination. Even Branson for a weekend this year (drive to destination) has become an issue as our daughter and son-in-law can't afford to go and, our son's truck has broken down necessitating an unplanned for repair.

A couple of more years of the kids not going and I'll probably look to get rid of two of our timeshares and, when I do, I'll get rid of them at any price. The two that I'll dispose of we'll have owned for close to 15 years and I feel we'll have received decent value for them. It won't make me cry and, saving the MF's on those two timeshares alone will save us enough money to take a cruise once a year if we so desire.

 

[BellaWyn]

Matt! Good job on doing your homework!! See how helpful TUGGERS are?

Anyway, as posted above, in a nutshell:
1. Poor Ecomony & inability to maintain the annual MF's
2. Life-change situations often motivate sale
3. TS junkies getting rid of unwanted weeks.
4. More supply than demand.
5. See TUG Brian's comment above - well stated!

It will turn up eventually. But not significantly. Those that USE their TS are usually the most satisfied with the process.

 

[brother coony]

Its not just timeshare that are cheap right now,they had action of houses, three and four bedroom in Michigan a couple of weeks ago and hundreds whit prices starting at $5000.00 (five thousand) did not get one bid,and these houses some were sold for $250,000 to over $300,000 a couple of years ago Georgia the same, just read where this guy bought 70 condo's in Florida that had asking price a couple of years ago of over $500.000
he paid only $30.000 each, hey you can still get a buck for most timeshare

 

[Shon_t]

The average person has no idea the timeshare resale market exists.

I would add that the average timeshare owner...often doesn't know how to take full advantage of their timeshare. There are many...many owners that have never even booked a reservation...I can't imagine paying $500-1000 a year for something I never use...and eventually, neither can they. Often I hear of Owners who are unaware of booking windows, of loopholes that allow for weekend bookings, ect. Some just can't wrap their heads around an online booking system...and just find themselves frustrated at lack of availability. Flexibility and planning ahead are often key...and the people that own their timeshare never using it, and then thinking at the last minute that they will book a week in Hawaii as a gift for their daughters graduation, are often disappointed.

I have some friends that own the same timeshare as I do. They are very unhappy with their ownership, and are trying to sell. They have very little disposable income to begin with...and even if they go to resorts, don't really have money to spend on anything in the surrounding area, once they are there.

I have other friends that own the same timeshare as I do, and are very happy with their experience. I love my timeshare, and have had many memorable vacations using my timeshare...the rules and loopholes were pretty easy for me to get the hang of...and I take advantage of the opportunities to use my timeshare. Even though I consider myself well educated and pleased with my timeshare...I haven't taken full advantage of my timeshare either. For example...I haven't booked an exchange...I'm too cheap to pay the exchange fees!

 

[Bill4728]

Please be aware that IMHO, there are two kinds of super cheap TSs:

There are the ones that 3 years ago were selling for $1. They are still selling $1 and are not worth it. Either the resort is just OK or the season of the week is low or (add your own reason).


There are the ones that 3 years ago were selling for $2,000 -$10,000 (resale). Several of these are now selling for $1.00. And IMHO they are steals. They have real value and will someday soon be worth a fair amount of money.

The trick is to know the difference between the two types of TS for sale.

PS Many TS that 3 years ago were selling for $15,000 - $20,000 (resale) are now selling for <$5,000. ( like several Marriott & Hilton TSs) So by buying one of these TSs now, you'll still be spending a significant amount of money, but you'll be saving ~$10,000 over the resale prices of just a few years ago. And in a few years, you may not have a much trouble selling one of these if you need to get out from under the TS.

PSS even the $1.00 TS often will cost you $1000 to buy when you add in the closing costs and the payment of the MFs. My BIL bought 2 TS recently, paid $1 for one and $100 for the other. BUT closing costs and MFs made the $1 TS cost him $300 more than the $100 TS.

 

[BellaWyn]

Tricks & TUG

The trick is to know the difference between the two types of TS for sale.

When looking at a potential purchase, if you have ANY doubt at all......

ASK TUG! It will save you!

 

[Mel]

Please be aware that IMHO, there are two kinds of super cheap TSs:

There are the ones that 3 years ago were selling for $1. They are still selling $1 and are not worth it. Either the resort is just OK or the season of the week is low or (add your own reason).


There are the ones that 3 years ago were selling for $2,000 -$10,000 (resale). Several of these are now selling for $1.00. And IMHO they are steals. They have real value and will someday soon be worth a fair amount of money.

The trick is to know the difference between the two types of TS for sale.

This is where your Due Diligence comes in. I'm the only bidder on a timeshare that closes tonight in eBay, for $1 plus closing costs (and MF for 2010). The question is, how do you differentiate between the unit that is a bargain at $1, and the one that isn't worth the closing costs? I looked at the listings today because of this thread, and happened upon a unit for sale at one of our home resorts, closing in less than 12 hours. I called DH and told him about it, not really planning to bid, but half hoping he would say to go ahead. The week we own is a 1BR that trades extremely well with RCI, so I already know about the resort - its history, its trade power, how cooperative the management is... the only question was the seller, and the eBay feedback gives me a good sense there.

Don't let the low prices fool you - there are some real bargains out there, if you know what you're looking for!

 

[timeos2]

Great time to be a buyer - just remember you hold the cards

Don't let the low prices fool you - there are some real bargains out there, if you know what you're looking for!

Absolutely agreed. If you know the resort, area and are happy with the fees right now is a golden time to be a buyer. Never before has such value been available basically for nothing or a few thousand at the absolute maximum.

The only buyers getting ripped off are those who still think they need to pay tens of thousands for any resort. No matter which it may be or what it used to sell for make your offers VERY low and, if not this time then the next, you'll get your week(s) for a real bargain price. Then you'll pay the real cost (the annual fees) going forward- and its the same if you purchased for $1 or $12,000. - so NEVER pay too much for purchase as that is only buying you the right to pay the fees and nothing more. It is the sellers who are stuck and you hold all the cards as a potential buyer. Don't get duped into paying more than you should. Paying much over $5000 for ANY resort is simply falling back to the same overpriced model as the developer pushes. Should you fall for that even on resale you are not likely to see your money back when YOU resell. Bid low and walk if the seller doesn't bite.There are far more of them then there are of you as a willing buyer.

 

[LAX Mom]

I think the increasing MF's are a big problem for the timeshare industry. I recently saw a post on the *wood board that the 2 bedroom deluxe unit at the Westin Maui is over $3,000 per year. That's over $400 per night just in MF!! I know these units have really dropped in price in the past few months, but I wouldn't want one with that MF.

In many cases you can rent for less than the MF. Why own and be liable for a huge MF each year if you can just rent for about the same amount.

 

[JMAESD84]

I think the increasing MF's are a big problem for the timeshare industry. I recently saw a post on the *wood board that the 2 bedroom deluxe unit at the Westin Maui is over $3,000 per year. That's over $400 per night just in MF!! I know these units have really dropped in price in the past few months, but I wouldn't want one with that MF.

In many cases you can rent for less than the MF. Why own and be liable for a huge MF each year if you can just rent for about the same amount.

This is exactly what has caused the collapse of Manhattan Club prices. Well that and the ability to get the reservations.

Soaring MF's will be the death of timeshare prices. Only those resorts that can control their operating costs so that the owners can receive good value from their ownership will retain any value. This will most likely occur where owners control the HOA.

 

[Mel]

This is exactly what has caused the collapse of Manhattan Club prices. Well that and the ability to get the reservations.

Soaring MF's will be the death of timeshare prices. Only those resorts that can control their operating costs so that the owners can receive good value from their ownership will retain any value. This will most likely occur where owners control the HOA.

Unfortunately, add into the mix the fact that developers want to keep their fees low while they are still selling. While they could do that by subsidizing the fees, more often it is done by skimping - either not funding the reserves, or not doing maintenance that should be kept up with. This results in higher fees as soon as control is turned over to the HOA, because they have to make up for everything the resorts were not collecting over the previous years.

Of course, the other side of that equation, which may kill some resorts just as they convert to HOA control, is the thought that the new members of the HOA don't know what they're doing, and can't be trusted. That may cause some owners to decide to "walk away" and not pay their fees, which in turn drives everyone else's fees up. The owner-controlled HOAs don't have the resources of the developers, so the process of getting those "non-performing" unit weeks into the hands of someone willing to pay the fees also takes longer. All the more reason to be wary of weeks for sale for $1, because they could end up costing a great deal in the long run.

Be wary of any resort where the maintenance fees are not in line with other local resorts.

 

[John Cummings]

It's the end of the year and MF's are due. People are attempting to dump unwanted timeshares before they have to pay another MF. Some are willing to sell at any price, including giving them away, just to not have to pay a MF that's due in another 3 to 8 week.

Right now we own 7 timeshares. I'm not to the point yet but, in a few more years, I could see giving away two of the 7 week own simply due to the fact we're not using them efficiently and the cost has grown to over $6,000/year.

We bought what we bought thinking that we'd eventually have grandchildren and could take family vacations. But that was poor planing on our part. The kids always want to take vacation but never can seem to afford to take the time off, request and get the time off or afford to get to the destination. Even Branson for a weekend this year (drive to destination) has become an issue as our daughter and son-in-law can't afford to go and, our son's truck has broken down necessitating an unplanned for repair.

A couple of more years of the kids not going and I'll probably look to get rid of two of our timeshares and, when I do, I'll get rid of them at any price. The two that I'll dispose of we'll have owned for close to 15 years and I feel we'll have received decent value for them. It won't make me cry and, saving the MF's on those two timeshares alone will save us enough money to take a cruise once a year if we so desire.

We have had a similar problem with trying to get our kids to use our timeshare. It just never works out due to their schedules, etc. I had a whole bunch of extra weeks banked at SFX that I wanted to give them but they were never able to take advantage of it. I ended up by selling 8 of my banked use weeks.

 

[John Cummings]

I think it is a combination of factors. The economy is by far the dominant factor with people not traveling as much. The demand is down and there is a lot of competition from cheap rentals and lower hotel rates. In many cases one can rent a timeshare or stay at a luxury hotel resort for less than the weekly cost of owning a timeshare. That coupled with people who have lost their jobs and can no longer afford their timeshares prompting them to try to dump them at any cost.

 

[Mel]

Remember also that those hotel rentals won't stay that low once the economy recovers. Like our timeshares, the hotels have a budget, but unlike the timeshares, they don't have anyone obligated to pay fees to cover that budget. For them, whatever they can get as a rental is income they otherwise would not have. Some timeshare owners feel the same way now, when they cannot afford to travel to their own timeshares - they can pay their $700 maintenance fees, recover $400 as a rental, and vacation somewhere near home (or even stay home), or they can pay $2000 in airfare on top of the $700 maintenance fee and worry all week about how they are going to pay off the credit card debt. Add the higher interest rates some of the credit cards now have, and renting for less than the maintenance fees sounds like a good option.

Unfortunately too many owners should never have purchased a timeshare, and naw many others are now in a position where they can't afford what they could when they purchased. The sale prices we're seeing don't truly reflect the value of these timeshare, but rather what desperate owners are willing to settle for. If they were truly worthless, nobody would have purchased them from the developers in the first place.

 

[John Cummings]

Timeshares, like any commodity, are only worth what somebody is willing to pay for them. That is basic economics 101. If nobody is willing to buy your timeshare at any price then it is worthless.

Hotel rates and cheap rentals were already taking place prior to the economy tanking. That has just accelerated. An economic recovery may not happen for several years yet.

 

[billhettinger]

I just joined TUG and this is my first post. I have been looking at some timeshares and have found some of these forums very interesting. Naturally, I gravitated to the one about why the prices are so low.

A lot of the posts in the discussion have been about the bargains (and not bargains) to be had with some to the really low prices.

Are all the prices that depressed, or are there still resorts/weeks where there is still a bit of value?

I am thinking of the mid summer weeks at the beach in New England, or mid-winter weeks on an island, or an event week someplace (Mardi Gras, Jazz fest, etc.). A lot of the resales are way off the original prices, but still are between 10K and 20K. These don't seem to be the $1 units on Ebay.

Are values in places/weeks like these holding up?

(Note that I am planning on using the weeks at least initially

Bill