Marriott Time Shares???

[Joss]

We just got back from Myrtle Beach where my wife did her first marathon, 26.2 miles. It was a bitch but she finished. Began at 0630 and the temp was 24F. I hid in the hotel. Finished at 6 hours and 3 minutes.

Anyhow, we got pitched by the Marriott people while we were there, to buy into a time share of the vacation facility they are putting in right on the beach. Prices are maybe $20,000 to $40,000, depending on season, for a dedicated week. Then there is a $750/ year maintenance fee too. But that appears to be the complete cost.

And... this also purchases your share of the building and real estate. So once you own it, it is yours, with a deed, just like any other real estate; sell it, will it, trade it, whatever. Growth was illustrated to me by saying that a similar Marriott facility went into Hilton Head in 1992 and shares that cost $16,100 then are selling for $43,000 now.

The other benefit of it is that, you can skip your week and trade into a week at any opening in many other Marriott facilities, around the world. Hypothetically, you buy this and you NEVER have to spend it in the summer at Myrtle Beach (gag).

They caught us completely cold on this. We aren't shopping this stuff at all and have never even thought about it. But it does sound interesting.

Ever hear of this? Any comments?

 

[lets-retire]

That sounds very expensive. If you are able to go there during the off season you can have great savings and not spend as much as you will for the time share.

 

[MasterBlaster]

Just say no.

Lets do a little math...

suppose you would have bought a unit for $30k. Now suppose that you could have invested that moneyt and received an after tax return of 5% every year. Therefore that unit is costing you $1500 (5% of 30k) plus $750 for a total of $2250.

Therefore you could rent a hotel or condo for $2250 a week or ($321/day) and break even. You decide when and where you go to, no hastle no fuss.

Just say no.

 

[MasterBlaster]

By the way these things sell on the open market for much less than face value. You can typically buy a timeshare from someone for 10-50% of the face value of the timeshare.

Also you can look for peridic assessments to cover new carpet and furnishings on the timeshare.

 

[Joss]

"Therefore you could rent a hotel or condo for $2250 a week or ($321/day) and break even. You decide when and where you go to, no hastle no fuss."

My understanding is that you pretty much CAN go when and where you want, within their umbrella of resorts; Vail, Bangkok, Palm Springs, etc, etc. You just trade yours for someone elses, like a big club. And your estimated daily rental rate ($321) is about what they said. Even so, we have NEVER vacationed at these levels of luxury... and really have no plans to. My interest at this point is more simple curiosity than anything else.

But the part that makes me wonder is that, once paid for, it is deeded real estate. You own it "forever". Leave it to your children, them to their children, on so on. The only cash that come up after the purchase is the annual maintenance fee.

Regarding the refurbishing assessment, I was told that the purchase price and maint fees cover it. Nothing more at all.

 

[MasterBlaster]

here's a link to another thread that talked about timeshares...

http://early-retirement.org/forums/index.php?topic=2472.0

 

[retire@40]

I had a similar question a while ago on this topic. Here's the thread... http://early-retirement.org/forums/index.php?topic=2472.0

I decided not to do it.

 

[Brat]

We owned two week time share in a prime location. It worked well for us but I honestly don't think it was a money saving proposition. Because of the location, Jackson Hole, we were able to sell it for what we paid but WE WERE VERY LUCKY.

If you gift it to your kids remember they take on the burden of the annual fees.

I know nothing of the Marriott program but you should explore all the possibilities if you are interested in a time share. Remember, RCI charges annual fees whether you use it or not, plus a trading fee.

 

[bssc]

If you are really interested, I would look into a resale since, as you point out, they are deeded property.

 

[kcowan]

We looked at a timeshare investment in detail. We discovered that the price was 3x what comparable investments were costing in the area. Yes the fractional nature made them more affordable but they did not fly as an investment but rather as a lifestyle choice.

Trading through RCI is expensive. We were looking at $250/year membership plus $150/week trade fee so we were starting at $400/week before even getting anything. When we checked on availability of places in San Francisco or Pebble Beach, they were booked up 2 years in advance.

If you want to try it, rent a timeshare from an existing owner at one of the many swapping sites first.

 

[Moemg]

I bought a used timeshare from Condolink .I paid $1600 for a week in prime time .Don't buy new .People are giving them away so they don't have to pay the rising maintenance fees .

 

[runchman]

Prices are maybe $20,000 to $40,000, depending on season, for a dedicated week. Then there is a $750/ year maintenance fee too. But that appears to be the complete cost.

These timeshares have always baffled me. 20 to 40k to guarantee your vacation options are more restrictive than mine, when I've payed nothing upfront? No thanks, I'll pass on that!

If you do go for one, keep saying "no thanks" throughout the presentation - I've heard that by the end, they typically lower the price big time to get you to buy.

I'd rather just go to vrbo.com and find a nice condo to rent for a week or two - no 'trading with others', no yearly fee, no upfront massive chunk of cash.

- John

 

[kowski]

If I were you I would go for it. A deal like that won't last long. Besides it will keep the economy going.

 

[Gail]

We have friends who have owned a timeshare in Hilton Head for many years. They have a large family, they all play golf, and they have probably gotten their money's worth, because they have owned it for so long.

We went through the presentation for a new development on Hilton Head a couple of years ago, and the prices were similar to what Joss is quoting. We were pretty honest up front that we were not really interested, but when they found out my husband is an attorney, they obviously thought they had struck gold. They brought out one person after another, each supposedly a little higher on their ladder, and each one gave us a better price, until we were at $10,000 from the original $38,000. We still said no, but it shows you how cheaply you can get one if you hold out.

We actually looked at some other units, with golf privileges that we really liked, and we could have bought a resale for $4800. If you're really considering this, do your research, and you can find a good deal.

 

[ChrisC]

Educate yourself at this forum: http://www.tug2.net/. There is a wealth of information here. I own several timeshares, including a Marriott, and I will be trading into the Myrtle Beach timeshare this summer. It is a fabulous resort. This is a luxury purchase in the sense that a timeshare will seldom, if ever, be a profitable purchase, especially if you buy directly from the developer, where the price of the timeshare includes a lot of marketing costs (those giveaways to lure you to purchase cost a lot). So, you can employ an investment analysis to determine whether it's a good investment, much the same way you might use that analysis to demonstrate that it's economically foolish to buy that Lexis, BMW or even Volvo from the dealer when you can purchase that Saturn from CarMaxx. Most who have purchased timeshares will say, like me, that we got ripped off when we purchased from the developer. But I have also enjoyed the wonderful vacations over the years with my family and friends with these timeshares -- maybe I could have done it by going to hotels over those years at a cheaper price -- I doubt it, however. I have little regrets about my purchases -- I'm not sweating the fact that I overpaid for at least one of those timeshares.

There is a growing "resale market" for timeshares where the price can be as little as 10 percent of the original price marketed by the developer. Some savy buyers do find a way to make these purchases more financially sound for them. And if you pay close attention to that discussions in the forum I posted above, you'll learn how that can be accomplished.

By the way, Marriott timeshares tend to depreciate/devalue less than most other timeshares. Marriott has a right of first refusal to repurchase a timeshare it sells to you. And some people think that Marriott timeshares are more attractive than others because of the ability to leverage your Marriott timeshares into Marriott reward points.

 

[Nords]

But I have also enjoyed the wonderful vacations over the years with my family and friends with these timeshares -- maybe I could have done it by going to hotels over those years at a cheaper price -- I doubt it, however. I have little regrets about my purchases -- I'm not sweating the fact that I overpaid for at least one of those timeshares.

One of the old posters here, GDER, spends 20-30 weeks/year traveling from one timeshare to another with his spouse & adult kids/families.

He pays even less than the hotel rates. They stay in timeshares whose owners are desperate for income, even if his last-minute offer is way below market. They have the time to shop around, a sense for the prices they can pay, and the flexibility to go when a bargain pops up.

Even Marriott, let alone the other less-reputable timeshare operators, would prefer that their buyers not be aware of the extremely active aftermarket in timeshare sales & rentals. It's similar to the blissful ignorance preferred by investors who want their financial managers to do all the actual learning & work. They just have to be willing to pay for it.

 

[Rich]

Sure, timeshares sometimes work out. I spoke to a woman yesterday who was given one by her parents. It's for a local resort which permits her family to use its health facilities year round. Costs them only around $550 a year, far cheaper than membership in a health club.

None the less, the other posters points are very valid. Time shares, when bought from the developer, are very, very overpriced. If you're desperate for a time share you can buy one for a fraction of its initial cost from the after market. Which ought to tell you something about value.

Also, my understanding of the representations made by people selling time shares is, they are often less than honest in their pitches.

Rich