How to get out of a timeshare???

[F4mandolin]

My friends tried really hard to get me to buy into the timeshare they were using 20+ years ago. Even at that time the price just didn't seem very good to me, especially the maintenance costs which I noticed were rising way too fast. One of my better decisions was not to buy a timeshare. But then again....they own a lot on a local golf course they bought a long time ago....they got a little greedy and didn't sell when the prices were way up around 2008......now it's getting back down almost to the price where they bought it. I keep pointing out to them they should probably just really lower the price and dump it since they don't want it anyway. Nope....they still see it as making a profit. They bought it for $29,000 probably 30 years ago.....can't sell it for $40,000 now. I pointed to the fact that they won't make any money.....insurance, property taxes, golf course charges etc....they are way behind anyway. They won't see it.

 

[MRG]

I've known a few folks that bought (paid to much), but they say their happy with them. I never liked the idea, I know you can swap for different locations, just seemed easier to go where we want(and work to get best price). I'll guarantee the folks that I know, never looked at the real costs including fees.

My MIL/FIL used to love to go to the free sales sessions, they never bought anything. It was entertaining to them(free stuff).
MRG

 

[daylatedollarshort]

I've known a few folks that bought (paid to much), but they say their happy with them. I never liked the idea, I know you can swap for different locations, just seemed easier to go where we want(and work to get best price). I'll guarantee the folks that I know, never looked at the real costs including fees.

My MIL/FIL used to love to go to the free sales sessions, they never bought anything. It was entertaining to them(free stuff).
MRG

There is a funny South park episode on just that topic. The parents go for the free ski weekend and are held hostage for hours and hours until they finally get broken down and agree to buy a timeshare just to win their release from time share presentation hell.

 

[mystang52]

I've known a few folks that bought (paid to much), but they say their happy with them. I never liked the idea, I know you can swap for different locations, just seemed easier to go where we want(and work to get best price). I'll guarantee the folks that I know, never looked at the real costs including fees.

My MIL/FIL used to love to go to the free sales sessions, they never bought anything. It was entertaining to them(free stuff).
MRG

Quite a few years ago I attended a Marriott timeshare sales pitch (I got 30,000 points for attending). Have to admit, the presentation was slick. I was certain this was a good deal, but being the cautious guy that I am I insisted on thinking about it. That's when the high pressure really began, including the pitch that I should sign now because by law I have 3 days to bail out anyway. I declined.
When I got home, I crunched the numbers and the supposed payback wasn't even close (IIRC, the break-even was about 40 years...). But at least I got those 30,000 points.

 

[zinger1457]

I'll bite and take a positive timeshare stance. Timeshares do have a much deserved bad reputation but the keys to timeshares (IMHO) are never buy from a developer, never ever believe what a timeshare salesman tells you, educate yourself and do plenty of research beforehand (TUG), and have flexibility when traveling. I am very happy with what I own, I purchase a Westin Kierland Scottsdale timeshare on the resale market for a fraction of what it would cost to buy from the developer. I didn't do it as an investment but also know I won't have any problem selling it for what I paid for it. This year I spent a week in 1 bedroom (full kitchen) units at Westin Riverfront Avon CO, Aviara Four Seasons Carlsbad, Westin Kierland Scottsdale (multiple weeks), and I'm now at the Westin Desert Willow in Palm Desert as I write this. These are all 4-5 star resorts that would cost +$250/night if booked thru the hotel, my average cost is under $450/week including all fees. Being retired I have the flexibility of traveling during non-peak weeks/seasons which is a key. If your working, have kids, and can only travel during specific weeks of the year you lose the flexibility of taking advantage of good deals when they come up.

 

[Andre1969]

I'll admit I've been tempted by a timeshare at a place we stay in Aruba. This past time, we were in a 1 bedroom, 2bath unit that was about 950 square feet, very close to the beach. We had booked it through Travelocity or Yahoo travel or something like that. I forget how much the unit was, as the total price was something like $3234 which included three round trip plane tickets. So, I imagine the lodging portion was around $1300-1400?

Well, we went on the sales tour. Turns out, the unit we were in would go for around $19,400. Plus a yearly maintenance fee of something like $792. I think the terms of the timeshare were something like 40 years, but for $1 extra you could get another 40 years for you and your heirs.

Well, $19,400/40 years is $485 per year. Plus the maintenance fee, comes out to $1277. Which is about what it cost to rent the place for a week. Now granted, this was a REALLY nice unit! They had cheaper ones for around $11-12,000, with the same $792/yr maintenance fee. Or studios for around $9-10K, plus around $550-600 for the maint fee.

Gotta admit, it's tempting, and I've been to Aruba three years in a row now. But, I have the feeling that as soon as I committed to a timeshare, I'd grow tired of it, and start feeling trapped by it. So I think I'll just keep on booking through the travel sites. And if I can't get a room at this particular resort, there are plenty of others on that island! And, if I get tired of Aruba, I'll have the freedom to easily pick someplace else.

 

[phil1ben]

TUG is the place to read FOR MONTHS before buying a timeshare. We bought a Hilton RESALE timeshare in South Beach three years ago. We paid $7,000.00. The guy we bought it from paid $65,000.00. We pay $1400 in maintenance fees annually for a 2 bedroom 2 bath in an Art Deco building on Ocean Avenue across from the Ocean. A suite like that in another hotel would be $900+ per night and we get about 7-10 nights of our choosing (subject to availability) for $1,400.00 per year. We don't trade and go there about 3-4 times per year using all our points annually.

The problem is the high pressure sales tactics and people not doing research before they buy.

Now that you have one, you have few choices but to sell it and take a non-tax deductible loss or use it. Most people find a way to use them. Good Luck.

 

[Chuckanut]

I looked at time shares years ago. Part of what turned me off was the financial issue: They total sale price for all 50 weeks (2 weeks a year were reserved for maintenance) was 2-3 times the price of a similar condo bought 'normally'. That seemed like one heck of a premium. The other financial issue was no control over the monthly fees which looked to much like room rental to me.

My biggest problem, was that I never found an area that I would want to return to year after year for weeks at a time. The only guy I know who made out well on a time share was a fellow who, many years ago, bought a pre-Grand-Opening deal. One week on the beach in Maui and he could pick any week he wanted. So he picked end of December/start of January. He could trade that for just about any other time share any place he wanted to go. Or rent it and cover most of his yearly fees.

 

[poorcarver]

30 years ago my then Engineering manager bought a timeshare and got money off if he would host a dinner for at least 20 people to hear the pitch. So DW and I went. The TS folks flew in a team from SC where the TS was and off they went. Multiple tables of five couples and a salesperson. Working the table we were at they asked the couples all the lead in questions: do you play golf, what sort of vacations do you take. Four couple were spot on, played golf, went to resorts, etc. The DW and I reported going camping, hiking, etc. Finally the salesguy asked what people did, all the couples were sales and marketing people until he got to us, the DW is a programmer and I am an engineer. The sales guy said that there were two kinds of men no salesman wants to meet: an engineer or a man who smokes a pipe. Whereupon I pulled my pipe out of my pocket.

We did not buy a TS.

 

[tryan]

Hmmmm ... I would simply stop making the annual maintenance payments and let them attempt "foreclosure" . If it is truly valueless, nobody will incur the costs of ownership (foreclosure or otherwise).

FWIW a good friends parents did exactly this on 2 TS in northern NH. Stopped going, stopped payments ... Simply walked away.

Rode the chair at a major ski resort with a TS owner ... a slope side ski out hotel. His 1/4 share bought 13 weeks/year (basically 1 wk/month). But the hotel allowed members to use rooms as long as the hotel was less than 50% full. So it was not his week but he was doing some early bird skiing (Dec) for nothing more than his maintenance fees and season pass.

 

[NW-Bound]

As explained in an earlier post, we were suckered into buying a timeshare. I consider the money a sunk cost, and try to make use of the annual fee via RCI timeshare exchange.

We have been frugal travelers, and if left to our own devices would stay in cheap motels. However, as we already have to pay for the timeshare, it forces us to exchange for other timeshares when we travel, and we have been staying in nicer places.

As our timeshare is at a highly-rated resort, we get quite decent exchanges. For example, in Palm Springs we got an entire townhome of 1,500 sq.ft. Or we could get 2 or 3 1-week stays in exchange for 1 week. In my experience, even the least fancy timeshare is still a lot better than a motel room. It may not be as nice as a fancy hotel, but has room to spread out, and a kitchen to cook some simple meals when we do not feel like eating out.

In short, a timeshare isn't bad if one makes use of it. People often buy and do not use it, just like many RV's and motorhomes that just sit parked until they fall apart.

 

[capjak]

We really enjoy our timeshares. All were purchased resale from people that no longer wanted them or couldn't afford MFs did not use etc.

We own Disney Vacation Club, Starwood (Westin, sheraton) and Marriott. We go to Maui stay at the Westin Timeshare on the beach one of the best resorts on the island for the maintenance fee of $1200, paid $2000 originally. Also have used it at the Atlantis Harborside 3 times. If I get $0 back I am ok with that. The Marriott is used for Florida and other warm spots(Marco Island, Orlando, Ft Lauderdale, Palm Springs, St Thomas)

The Disney we have rented to other folks for 2x's the mainenance fee, about a 5% return (but I did not buy it as an investment) the current resale market for Disney has gone up significantly since I purchased it.

With all that said I plan to use it in retirement as we can not decide on one place to retire so guess we be doing what these folks do Ron and Joan's Journey or maybe like these folks:
About Us | http://fulltimetimeshare.com/blog

Hmm maybe timesharing isn't all bad after all

 

[ChrisC]

I've also enjoyed my timeshares over the years. Originally, we had 3 timeshares (weeks-based), now we're down to 2 weeks-based but added a timeshare points-based unit recently. I was fortunate to sell one of my weeks-based timeshare several years ago at a break-even price. We've had great vacations with our kids and friends over the years and I'm looking forward to leveraging our timeshares, frequent flyer miles and reward points for fabulous trips in the future during retirement.

Just this year, we've leveraged our timeshares and reward points for a week stay at a 2br unit at a Marriott Resort in West Palm Beach, 2 days at an upscale hotel in Asheville, NC, a week at a 2br unit at a Marriott Resort near Palm Springs CA, 7 days at Marriott Hotels in NYC, and we just came back from Carlsbad CA staying at the Four Seasons Aviara in a 2Br unit and also used frequent flyer miles to fly First Class coast to coast. I believe I have saved money over the years by effectively using my timeshares, frequent flyer miles and reward points. And the memories have been priceless.

Next year, we'll be using our timeshare holdings and reward points to augment a River Cruise in the French Provence.

As others mentioned, TUG is a great place to learn about timeshares. However, there's a definite bias in the TUG crowd against ever buying from developers -- the mantra there is to always buy resale, which is a very good strategy in general as there is a decent resale market with great prices if you have patience to wait for the right unit to come on the market.

 

[ShortInSeattle]

This has been a very informative thread, thanks everyone. My takeaway is that I'll never be a timeshare person. Even the good experiences sound like a bad deal to me. The equivalent of being offered an annual discount coupon for a resort, but to get the coupon you have to commit to 40 years of payments, even if you don't go.

Travel websites offer 20-40% discounts all the time. No payment-shackles required.

SIS

 

[zinger1457]

Hmmmm ... I would simply stop making the annual maintenance payments and let them attempt "foreclosure" . If it is truly valueless, nobody will incur the costs of ownership (foreclosure or otherwise).

Not sure it's as simple as walking away, especially if they still have a loan out on the purchase. At a minimum it will have an impact on their credit history/report. When someone walks away and stops paying the maintenance fees someone has to foot the bill, it's the other owners that get stuck paying through increased maintenance fees.

 

[mystang52]

Another factor with Timeshares was a turn-off for us (others here may have the exact opposite reaction). To wit, on vacation we have no desire to cook/eat "at home," make our bed, or worry about clean towels.
The one presentation we went to told us that we could get maid service and towels for yet another fee. For us, that alone was a deal-breaker.

 

[sheehs1]

My view of the timeshare industry (I believe they are trying to call it "fractional ownership" now -- wow) is that the timeshare is just an annuity for the management and maintenance companies.

I have a friend who sent me this link. This friend has been an astute real estate investor and has 3 properties in two resort areas he owns outright (except for whatever he owes the bank). Two of these properties are considered "wedding" properties that he rents for $25,000 per event (something like 20 bedrooms each).
He told me recently he has put some money into this "fractional investing" concept and swears he is making over 30% on his money. He provided me with a link and I have done some preliminary research. I'm left with a ton of questions but have not called this company as of yet.
It seems the way they are marketing this fractional investing concept is by telling you the difference between this and a time share. The nuts and bolts is that you get a deed of trust as tenants in common for your ownership (along with a commiserate part of the debt) and evidently you get part of the rents.

Has anyone else done anything like this? Thoughts?
Here is the link if it is allowed to post.
Travel World Vacations - Fractional Real Estate Investing

 

[tryan]

Not sure it's as simple as walking away, especially if they still have a loan out on the purchase. At a minimum it will have an impact on their credit history/report. When someone walks away and stops paying the maintenance fees someone has to foot the bill, it's the other owners that get stuck paying through increased maintenance fees.

If there's a bank loan then obviously a credit hit would happen ... but most timeshares are not DEEDED ownership. So there is nothing to foreclose. More like breaking a lease. The chain just peddles the product to the next in line.

FWIW I've had little luck hitting a tenants credit for a lease violation.

 

[NW-Bound]

...
It seems the way they are marketing this fractional investing concept is by telling you the difference between this and a time share. The nuts and bolts is that you get a deed of trust as tenants in common for your ownership (along with a commiserate part of the debt) and evidently you get part of the rents.
...

The 1,500-sqft villa in Palm Springs that we once stayed in for an exchange was set-up as a fractional unit. There was a closet with 4 locked cabinets for the 4 shared owners to store their personal belongings. Apparently, partial owners return to the same unit, unlike regular timeshare owners who get whatever units available at the time.

Fractional ownership looks like timeshares on steroids for me. And I like to travel and stay in different locations instead of coming back to the same place all the time. I already have my 2nd home for that. So for now, my timeshare + exchange capability works out OK for me. Just book a week in Ruidoso NM via the exchange, a place I have meant to visit for some time.

Anyway, to the earlier poster who wants maid services, my experience is that all timeshares I have been in have towel exchange in mid-week. Some maids even offer room cleanup for the mid-week service, but we always decline. We do not make such a mess to require bathroom cleanup daily. And eating out every meal is something we do not want to do, even if someone else offers to pay for every meal.

 

[sheehs1]

The 1,500-sqft villa in Palm Springs that we once stayed in for an exchange was set-up as a fractional unit. There was a closet with 4 locked cabinets for the 4 shared owners to store their personal belongings. Apparently, partial owners return to the same unit, unlike regular timeshare owners who get whatever units available at the time.

Fractional ownership looks like timeshares on steroids for me. And I like to travel and stay in different locations instead of coming back to the same place all the time. I already have my 2nd home for that. So for now, my timeshare + exchange capability works out OK for me. Just book a week in Ruidoso NM via the exchange, a place I have meant to visit for some time.

Anyway, to the earlier poster who wants maid services, my experience is that all timeshares I have been in have towel exchange in mid-week. Some maids even offer room cleanup for the mid-week service, but we always decline. We do not make such a mess to require bathroom cleanup daily. And eating out every meal is something we do not want to do, even if someone else offers to pay for every meal.

I agree on the "timeshare on steroids" analogy. Evidently they have also qualified these fractional ownership tenants in common units for a 1031 exchange. I still have question about the taxation and debt piece as well as selling it in the future. There also seems to be certain points in time when you can get your investment out or so he says. Wonder if it is possible that my friend is really getting 30% return or if will also be getting a bill for the maintenance and expenses or really will be able to get his investment out "on demand". Don't have answers for those pieces yet.
Seems to me a big risk here is that the Leasor (the entity who has bought/mortgaged the resort property) and sold the units as fractional ownership units has control over the accounting, meaning at some point perhaps there is no positive cash flow to distribute especially if the resort property requires large capital infusions to keep it up.

 

[MRG]

. Wonder if it is possible that my friend is really getting 30% return or if will also be getting a bill for the maintenance and expenses or really will be able to get his investment out "on demand". Don't have answers for those pieces yet.
.

I think you know the answer.
MRG

 

[sheehs1]

I think you know the answer.
MRG

Agree MRG. Suspicious to say the least. I'm afraid in his effort to avoid the stock market he may have gotten himself into something that may bite him in the behind. That said, he is a big boy with current real estate worth at least 10 millions so not to worried about him.

 

[yakers]

May need to get fairly creative in disposing of a troublesome, undesired timeshare. Maybe find a homeless addict and gift it, maybe someone in prison for a long term, last might be someone who has a short time to live. It sounds pretty grim but some of these timeshares stick like road tar.

 

[NW-Bound]

The recipients would need transportation to get to these timeshares, which are in touristy locations and not always in city centers.

 

[Southern Geek]

A number of years ago, my DW had to transfer ownership of her parent's TS into her name to prevent her elderly father from paying scammers up front to sell the TS. We didn't want the TS, and tried to get rid of it, but there was no market. Couldn't give away. Couldn't give it back to TS company. Since that time the maintenance fees have more than doubled.

Reminds me of an old chestnut for remembering the 3 Laws of Thermodynamics - "You can't win. You can't break even. You can't even get out of the game."

Inheritance of TS properties is becoming a major problem. It is not uncommon for beneficiaries to estates that have a TS property to disclaim the TS because of the fees. The TS remains with the estate which has to continue to pay the fees until the property is disposed of. Until this happens the estate remains open with cash assets tied up to pay the fees. Some aggressive TS companies have sued estates that stop paying the fees.
One clever individual I talked to had placed his TS into a trust. The only asset in the trust is the TS. Each year he provides the trust with enough income to pay the fees. Upon his death, if the beneficiaries of the trust disclaim because they do not want the TS, then the trust will cease paying the fees. At that point, the only option for the TS company is to foreclose on the property in the trust. Meanwhile the rest of his estate will be unaffected and none of his beneficiaries are saddled with a TS that they might not want.