Why buy a timeshare (even resale)?

[sumauri]

Why would anyone buy a timeshare week with all the hassles of owning when they can rent without the cost of the initial investment, exchange company membership, exchange company fees (rising rapidly), rising maintenance fees (re: Foxrun's $160 rise in maintenance fees for 2007) etc. ?

There was a time, not long ago, when the internet was not full of rental sites like there are now like redweek, bidshares, ebay, myresortnetwork, Tug and many many others sites.

It's much easier to buy than to sell and when you can't sell you're still stuck with yearly maintenance fees until you do sell.

Your thoughts?

 

[kjsgrammy]

We bought our first and second timeshare without the knowledge provided within TUG. Thankfully, with the help of TUG, I am learning to at least get trading benefits from them.

Our third timeshare at Sandpiper Beach Club in Sarasota/Siesta Key (weeks 3 & 4) was bought because we got tired of trying to find a unit directly on the beach for a reasonable price. We travel to Siesta Key every January and have no intention of trading our weeks. We negotiated with seller and believe we got a very good price. Maintenance fees are reasonable considering location of unit.

I agree with you in that there are numerous sites for searching for vacation properties. I just got tired of sorting thru them all.

 

[Dave M]

There are many, many reasons for owning, depending on the individual, vacation preferences, financial considerations, etc.

I'll start by asking a rhetorical question along similar lines: Why would people pay $30,000+ for a fancy car when a $20,000 car will get them where they are going just as well. The various answers to that question which millions of people answer - at least subconsciously - every year as they buy more expensive cars also apply to timeshare purchases.

Those of us who buy do so for various reasons. We buy because:

• We want to.
• It's a disease
• We find that those elusive vacations that used to be pushed aside by work responsibilities now magically happen every year, because we already have a reservation at our “second home”.
• That prime week on the beach (or at a ski location) at the resort I love in the resort town I like is less costly with a resale purchase and the related maintenance fees than through the exorbitant rental rates I would have to pay, assuming I can find a rental! (Believe it or not, this applies to some timeshares.)
• I fell under the spell of the promises of the developer's timeshare sales presentation.
• We have done the math and it works for us.
• I'm never "stuck" with maintenance fees, as you suggest. I make a conscious decision to own. If I no longer want to use the timeshare, I'll rent it or sell it.
• The "hassles" (as you suggest) of owning for some are a hobby for us. Spending many hours planning for travel, working diligently to obtain that perfect exchange or looking forward to returning to my "second home" can be as much fun as many other pastimes, depending on one’s interest and disposition.
• Yes, maintenance fees go up. So will rental rates. In some years fees have gone down (at one of my Marriotts). My maintenance fees have gone up an average of about 4% per year per resort over the past 10 years. (I track it.) That's a lot lower inflation than for many other things I pay for!
• Yes, some exchange company fees have gone up rapidly, especially if you just compare this year to last year or look at only one exchange company. There are many exchange alternatives, including some direct exchange alternatives, that have little or no cost associated with them. I can complain about rising rates or I can look at the success I have in getting exchanges I want. I choose the latter course.

There are other valid reasons, depending on the individual.

Just like any purchase or expenditure, what fits for me and what might be a "valid reason" for me to purchase may not fit for you and vice versa.

 

[Dave*H]

If you travel during the off season and/or to overbuilt areas, I think a case could be made that it is better to rent. If you travel to high demand areas during peak seasons, rentals are often much higher than the MF. My take is that renting vs owning depends on when and where you travel.

 

[BocaBum99]

Because timesharing, when done right, is the absolute cheapest way to travel for families of all sizes when total cost of ownership is factored into the equation. I believe the majority of Tuggers know how to do it right. But, it does take some work.

Even with the cheap rentals, owners can do better than renters because if you rent, all you can do is rent. But, when you own, you can either rent, use your week, exchange or profit from your own rentals. And, you can even profit by buying and selling your units.

With a small amount of effort, it is possible to create a portfolio of timeshares that pays for all of your vacations. In essence, you can travel for FREE. Who wouldn't want that?

Now, if you don't want the hassles, then renting is just fine.

 

[sumauri]

Oh, don't get me wrong -- we were into timesharing for many years and we had some wonderful vacations and exchanges, but that was before there were so many (timeshare and condo) rental sites available on the internet and otherwise.

I'm definitely not against timesharing in any shape or form -- I was just curious of your thoughts with so many rental sites out there now.

(edited to add timeshare and condo rentals in paragraph one)

 

[PerryM]

Timeshare aficionado?

The OP is asking a great question that has many answers. To me there seem to be just a few classes of answers:

1. Talked into it by a timeshare developer salesrep
2. Bought a week, either from the developer or resale, since it made sense (Cents?)
3. Renting since renting is easier and less hassle

I guess there are other reasons, many of which Dave covered in post #3


#1 is the reason 80%+ folks buy a timeshare – they were talked into it by a slick timeshare (TS) salesrep. The new owner knows little of timeshares and by the time “Their best new friend”, that salesrep has cashed his/her commission check our new owner will be awaking to the reality of timeshare ownership.

Some TS owners will not care and enjoy their yearly vacations and think TS ownership is right for everyone. Some will realize that the salesrep left out huge chunks of knowledge – like their TS is now worth pennies on the dollar. This owner may decide that perhaps the 14.99% financing and 10 years of ownership costs makes renting, the same unit from the developer, a super bargain.

#2 is represented by folks here on TUG and other chat rooms. They coconsciously made a decision to buy a TS and it may be not the first one, but many many more. They have found that TS, either resale or developer, is just right for them since they have the knowledge to exploit the units for their benefit. This is not bad – just reality. For every experienced owner who knows how to get a holiday reservation, other fellow owners were slow by seconds and missed out on that reservation.

#3 is for the person burned out on TS or wise enough to not be talked into a TS by that loveable TS salesrep. Owning a TS is to add a never ending expense that generally takes long term planning and thus reduces flexibility. Sure it might force you to take a vacation but you might have passed up other opportunities.

Timeshare Rentals:
To me, there is a glut of timeshares out there – just look at resale prices (supply and demand form their prices). Many folks seem to buy them from the developer and then not use them. They either rent them out themselves or exchange them and RCI rents them out for peanuts since so many are out there for rent.


Conclusion:
To become a timeshare aficionado requires time and money. If one looks at it as a profitable hobby then it’s a pleasure to do. If one does not want to spend that time, money, and learning curve you can either march into the developer’s sales gallery and walk out with the free gift in one hand and sales contract in the other, or just rent.

 

["Roger"]

Lots of good responses already. In my own case (I end up taking a middle position) ...

1. I like my home resort -- going there feels like home. (I don't go every year, but when I do go, I have hassle free access to the same unit. Home away from home.) Renting would not provide the same quality of life experience for me.
2. Beware of generalized statements that renting is cheaper. Yes, there are many places that I would be better off renting (not just in terms of the cost, but the variety of options available to me). That often, however, is not the case. I have taken a number of trips where there is no comparable rental options. Bed and breakfast vs. a timeshare? A hotel room vs a 1200 sq. foot apartment? No thanks, I'll take the timeshare. Or, in some cases, there are some wonderful places to rent, but during high season only at a cost of three, four, even five times my maintenence fees. (I don't want to say to myself, "Well, I'll go to Orlando instead because it is cheap.")
   
   The opposite is also true, however. There are places where I would (and do) like to go where there are no good timeshare options. Or, there are timeshare options, but rental is cheaper and better.

In the end, I am happy with a mixed stategy. Use my timeshare itself or in a trade for some trips; rent for others. If I did one or the other exclusively, I would be missing out.

 

[Hoc]

It's much easier to buy than to sell and when you can't sell you're still stuck with yearly maintenance fees until you do sell.

Your thoughts?

It's incredibly easy to sell. You put your unit up for sale on ebay for a dollar, and take whatever you get. It's only difficult to sell if you have an unrealistic expectation of getting a lot of money back for the sale of your timeshare.

There are those who think that their timeshares have some significant value as a resale. Those are the ones who are stuck without selling, and who have to continue to pay annual fees until their timeshare sells at their price.

That is why I always advocate that, when purchasing a resale timeshare, you set your price with the assumption that you will not get anything back if you eventually have to sell.

 

[MidlifeTraveler]

[*]We find that those elusive vacations that used to be pushed aside by work responsibilities now magically happen every year, because we already have a reservation at our “second home”.[*].

That, in my opinion, is the most important reason of all! I can't tell you how many "unbooked" vacations have been changed, cancelled or we've gone on without my husband for this very reason.

Plus, if you buy a large enough unit and enjoy travel with friends and family, you can charge them just enough to cover your maintenance fee and you pay less in the end.

IMHO

 

[joestein]

If you could only get 1 week of vacation for your timeshare, I don't know if it would be any great value. But I purchased 166,000 FF points via resale and I am getting anywhere from 3 to 5 weeks of vacation each year for my maintenance and exchange fees.

In addition, my vacations are sometimes at prime time in hot spots. (I exchanged to Worldmark Windsor in CA for Aug 2007, checking the internet, I saw it for rent (I think it was expedia) for $450 a night.).

PLUS.....It kinda forces you to go on vacation!

Joe

 

[talkamotta]

Needless to say this is a board of timeshare owners, so we are partial.

10 years earlier, before timeshare ownership. We would crowd 7 people into a hotel room, or the camping thing, 2x we did the visitation thing (visit my sister in California), most of my vacations were the stay at home get caught up on chores thing. I thought timeshares were a bad thing, something I couldnt afford for sure. It is so sad because my oldest was 23 before I bought my first timeshare, look what we missed. Ive made my mistakes along the way, but with the help of TUG, Im learning.

The first timeshare that I bought was from the developer/sales person. Didnt get real screwed over paid $6K instead of resale for $3K. But the one thing timeshare sales people will say that is true "It makes you take the time to vacation". Thats not true in all cases. My friend owns a timeshare and she hasnt done anything with it for 4 years.

If you spend some time and with a little planning, your accommodations will cost you alot less. That doesnt necessarily mean you will spend less on your vacation, it just means your $$$ will go farther. I have a certain amount of money to spend on vacations and when that is gone, I am done for the year.

Right now the rental market seems to be pretty good, so maybe you can do that for a while. Maybe you can get rentals at places you would want to buy or visit often.

Here are 2 examples of why I buy:
Longboat Bay Club. Paid $2K, maintenance fees are under $800 (which are higher MFs) Will stay in that resort at least 20 times in my life. So it will cost me under $1,000. If you are lucky to get that on a rental basis from II/RCI and its under $1000 go for it. To rent it out from the resort, you are looking at $1500-$1800 and as high as $2200/wk. Because I love that resort, I want to stay in it most every year, so I have that guarantee. You might not care.

Another example. I have 2 low traders, paid $100 each, MF are $400 (add the exchange fee) $550. I have the Cliff Lodge at Snowbird (thier MF are $1K) and Marriott Mountainside (MF $600+) So I am saving some money on the MF but I didnt pay the initial fee of either resort. Yet I stay at both of them each year. They arent the ski weeks (but I dont ski) and I can be flexible in that area.

The bottom line is still the same over the years. "Do you want to make the committment to vacation?" Say "yes" to this, even if it is a tent, rental vacation or buying a timeshare.

 

[mmthomas]

Easy to Sell?

I disagree with HOC that is is easy to sell if the price is low. Some TS have incredibly high maintenance fees. They are usually controlled by developers after sell out. It is difficult to even give away those with unreasonable annual fees.

 

[Dave M]

I disagree with HOC that it is easy to sell if the price is low.

I believe that as a general rule, Hoc is right on target. There are exceptions, but his suggestion of putting it on eBay with no reserve will almost always work well.

Some TS have incredibly high maintenance fees. They are usually controlled by developers after sell out.

Actually, the fees are usually controlled by owners after the resort sells out. The majority of timeshares have owner-controlled boards of directors after the developer has sold most weeks (usually more than 75% or 80% of the number of weeks available). Those owner-controlled boards have the same goals that you and I do - maintaining a high level of service and upkeep at the lowest practical cost.

It is difficult to even give away those with unreasonable annual fees.

Actually, I believe the majority of timeshares with high maintenance fees (e.g., Marriott, Starwood, Hyatt, etc.) are very, very marketable.

 

[sumauri]

That is why I always advocate that, when purchasing a resale timeshare, you set your price with the assumption that you will not get anything back if you eventually have to sell.

That's good thinking if you can afford it. We couldn't afford to lose money on our resales.

We did make a little money from the sell of some of our resale weeks (we started the prices at what we paid resale) but it definitely wasn't easy by any stretch of the imagination. We owned one week in a relatively popular location that started a bidding war on bidshares between two people.

However, we felt very lucky to have even gotten our initial investment back in the other resale weeks we sold.

 

[geekette]

If no one owned, I don't think renting would be cheap because there wouldn't be as many resorts in the game to rent their unowned units - some would be forced to fold. Nor do I think a resort would rent to someone as inexpensively as an owner would.

jmho of course

 

[Dirigible]

It only makes sense ... if it makes sense

We just bought our first TS. Apart from the one-time closing costs and transfer fees, the annual MF is (currently) $341. Divided by seven that yields about $49 a night. That's about the rate of a Motel 6, and we get a full kitchen/dining, washer/dryer, etc. The one-time fees were less than one year's MF, and our usage begins next year.

We get a guaranteed room at a place close to family without the hassle of searching/booking a hotel, and with much nicer amenities, and cheaper than a typical hotel stay. To me, that makes sense.

We have the option of using the TS and inviting our family to come and splash in the pool, yielding usage to our family (thus giving them a vacation for free), or exchanging for a week (or two) elsewhere occasionally.

For us, it just made sense: the numbers all added up. I've already begun the search for a second TS. Whether I buy or not depends on whether it makes sense or not.

 

[Pat H]

Biggest benefit for me is that it forces me to take a vacation. I've owned since 1988. We bought because of the developers lies and because spending a rainy week in a motel room with 3 kids is hell. There were many times when I know I wouldn't have gone on vacation if I didn't have timeshares. I wouldn't have been able to justify (in MY mind) the cost of a vacation. With a timeshare, the m/f is already paid and air has been booked many months ahead of vacation. I feel like I am spending very little.

 

[talkamotta]

Sumauri:

Do you feel good about getting rid of your timeshares now that is all said and done. How are you vacationing?

There are a couple of mine that I wouldnt mind selling...but I would just buy others to replace them. Kind of an upgrade (would like to buy a Marriot, Worldmark or a good points FF). When I retire, I will probably need to rent some in addition to my weeks, to fill in the gap.

Ive found that as time goes on, and situations change, so do my goals w/regards to traveling and vacationing.

 

[DavidnRobin]

For some reason I decided to respond to this somewhat rhetorical question.

In buying resale - real life example: Westin St John (an incredibly beautiful place...) - that I got at a great price on eBay and has a annual MF of less than half of what I could rent even a closely comparable place (if one were even available). PLUS - I can use it for excellent exchanges if we decide to go elsewhere since there is a lot of demand - AND if we ever tire of it we can sell for what we paid - or perhaps even more - since we got it at a great price. IN FACT, we could sell it now and have paid for our entire 2006 vacation there, and maybe even turn a small profit. But we are not...

If done right it is a lot cheaper then renting - where your ROI is zero - this is the same reason I own my own hone versus renting.

This is why we bought a TS resale - why do you ask?

 

[Hoc]

That's good thinking if you can afford it. We couldn't afford to lose money on our resales.

You never lose money on your resales. You lost the money when you paid too much to buy the timeshare in the first place. If you need a high resale price to justify what you paid for your timeshare, then you paid too much.

 

[Carolinian]

The volume of the rental sites you mention is a drop in the bucket compared to the rental sites of RCI. That is who is really flooding the market with rentals, which drops both rental and resale value of our own timeshares.

But, your point is a valid one. Why buy the cow when RCI is providing the milk for pennies?

Why would anyone buy a timeshare week with all the hassles of owning when they can rent without the cost of the initial investment, exchange company membership, exchange company fees (rising rapidly), rising maintenance fees (re: Foxrun's $160 rise in maintenance fees for 2007) etc. ?

There was a time, not long ago, when the internet was not full of rental sites like there are now like redweek, bidshares, ebay, myresortnetwork, Tug and many many others sites.

It's much easier to buy than to sell and when you can't sell you're still stuck with yearly maintenance fees until you do sell.

Your thoughts?

 

[m61376]

I have recently just stayed in a timeshare and my husband and I were bit by the bug (and hopefully will be a timeshare owner soon if all goes well...). Besides actual use of the unit and anticipated trades, we bought for 2 reasons- one, it will allow us to buy reduced priced vacations from the trading company (II, in this case) and, secondly, while I know on paper I can rent a week rather than buying a timeshare, I know that I personally would probably think twice about forking over a few thousand dollars on a week's rental (we are buying a high season beachfront unit). I know that I am, in effect, prepaying the next 10 year's rental fees, but it is a one-time expense and I don't have to deliberate about it annually.

As opposed to hotel rooms this was a fabulous way to travel. We generally travel with family (parents and one or both adult children) and it was roomy and convenient to have the kitchen for a couple of dinners, but more imp. for breakfasts and snacks. It was nice to freeze bottles of water for the beach- little things that really added to our trip that you can't get in a hotel stay. After staying at Ko'Olina, my husband said he never wanted to go back to a hotel room (and we have traveled fairly extensively over the years).

 

[sumauri]

Sumauri:

Do you feel good about getting rid of your timeshares now that is all said and done. How are you vacationing?

Actually we feel very good about selling our timeshares when we did and we have no regrets since there are now so many rental sites on the internet now.

When we decide to vacation we check out timeshare or condo rentals on the various rental sites on the internet or vrbo ( vacationrentalsbyowner.com ) or similar sites.

 

[sumauri]

The volume of the rental sites you mention is a drop in the bucket compared to the rental sites of RCI. That is who is really flooding the market with rentals, which drops both rental and resale value of our own timeshares.

But, your point is a valid one. Why buy the cow when RCI is providing the milk for pennies?

And Carolinian above makes a valid point. We haven't checked any of RCI's sites yet.