Timeshares

[SecondAttempt]

I know and understand the arguements about timeshares. I have had friends who skillfully take advantage of them but also heard plenty of horror stories. I have always avoided them partly because my job has never been such that I can rely on a specific week off each year.

Today an acquaintance offered to give me her time share for free! Obviously that is a bad sign. In her case she is paying $1700 a year in maintenance for 1 week. She is usuallable able to use the week so it is not horrible. But because of Covid she has accumulated unused time and so has everyone else so it seems to be impossible to use time right now.

Out of curiosity I looked at timeshares for sale tonight and there are many, hundreds, available for free with less than $1000/year maintenance fee. I know that is a bad sign.

But as I approach retirement, is it worth being a vulture and scooping up one or two places, signing up for $1500 a year in fees in exchange for lodging I will actually be able to use?

Trust me, I'm skeptical, but as my friend described it, it seems like the current crisis is covid related so it might be a vulture opportunity not to miss

 

[HarveyS]

If you don't mind signing up for $1500 a year for the rest of your life, with no idea how much that amount will increase in the future, among other issues, go for it.
You can often rent someone else's timeshare for less than the fees they pay.

 

[Luvtoride]

Second,
Many things to consider before taking on a timeshare (even for free).
-Which resort system is it part of I.e. Marriott, Disney, Hilton or a lesser known system?
What does the week purchased entitle you too?
-Fixed week, flexible week. One resort/ location/ multiple locations?
-Unit size?
-Is it a weeks only system or a points system or both?
-how desirable a week (time of year/ season) can you reserve? This becomes important not only for your future use but for future potential rental purposes.
- is it part of Interval International or RCI the two major exchange systems.

I would head over to Timeshare Users Group (TUG) forum to read up about timeshares and the system that this one )or any other you might consider scooping up for cheap is in.

BTW, we own timeshares and points thru the Marriott system for over 23 years. We have used them for wonderful family vacations (going back to Aruba this summer with our kids and grandkids for the 12th time), couples trips, cruises and tours. Yes we pay a lot in maintenance fees but feel the value of our usage has always exceeded that $$ spent on fees vs paying out of pocket for vacations or renting others timeshares.

In the rare times we couldn’t use our timeshare we have rented them out thru Redweek or TUG for More than our maintenance fees paid.

Good luck.

 

[DrRoy]

$1700 a year would let you rent many places anywhere, anytime, with no obligation.

 

[njhowie]

Luvtoride makes extremely good points, all of them spot on, and there are more.

$1700 for one week seems high to me...but if it is, that determination would obviously depend on lots of factors. That you are able to find others for less than $1000 a year is not necessarily an indicator that $1700 is problematic. Are the ones for less than $1000 a year comparable - maybe they are real losers, with deteriorating properties that have little exchange value? How much of the annual fee is for property taxes for yours and the others you're comparing with? What is the financial strength of the sponsor of the timeshares?

We've owned Disney for over 20 years now - best money we've ever spent. Never exchanged out of network, no need to. Heading back to their Hawaii resort in the spring for the second time. Could sell it with no effort today for double what we paid. Our annual fees are about $1100 and depending when we travel, location and type of accommodations we choose, that can get us 1 to 3 weeks a year. If we paid out of pocket for the same accommodations at the same locations and times of year it would now cost us about $5000 to $7000 a year. For us, this really turned into an investment that paid off in spades.

As Dr Roy points out, $1700 a year could pay for very nice accommodations in many places with absolutely no financial obligation/commitment. However, you need to compare that to the benefits yours would provide.

Could you indicate who the timeshare is through and the specifics about what your contract/deed would provide?

 

[VanWinkle]

Luvtoride makes extremely good points, all of them spot on, and there are more.

$1700 for one week seems high to me...but if it is, that determination would obviously depend on lots of factors. That you are able to find others for less than $1000 a year is not necessarily an indicator that $1700 is problematic. Are the ones for less than $1000 a year comparable - maybe they are real losers, with deteriorating properties that have little exchange value? How much of the annual fee is for property taxes for yours and the others you're comparing with? What is the financial strength of the sponsor of the timeshares?

We've owned Disney for over 20 years now - best money we've ever spent. Never exchanged out of network, no need to. Heading back to their Hawaii resort in the spring for the second time. Could sell it with no effort today for double what we paid. Our annual fees are about $1100 and depending when we travel, location and type of accommodations we choose, that can get us 1 to 3 weeks a year. If we paid out of pocket for the same accommodations at the same locations and times of year it would now cost us about $5000 to $7000 a year. For us, this really turned into an investment that paid off in spades.

As Dr Roy points out, $1700 a year could pay for very nice accommodations in many places with absolutely no financial obligation/commitment. However, you need to compare that to the benefits yours would provide.

Could you indicate who the timeshare is through and the specifics about what your contract/deed would provide?

Very interesting post, you may have changed my mind about the value of some timeshares. I thought they were all terrible, but you make great points.

Best to you,

VW

 

[Ronstar]

Keep in mind that the maintenance fee will most likely to be more than the $1700 that it is now.

I recently bought a timeshare that sounded like a good deal, but I found that room availability and maintenance fee raises were not what was told. So I canceled

 

[ElizabethT]

For me it comes down to simply this: It is a ongoing financial obligation that cannot be easily discharged, and that has no market value..

I also think of timeshare king David Siegel's comment in Queen of Versailles, which was something along the lines of 'Wealthy people do not buy timeshares, they buy vacation homes.' His implication, which I do believe he also stated in the film, was that timeshares allow people to feel wealthy even if they are not, and that at the end of the day, that is what he and his sales team were really selling.

That documentary was a real eye opener for me.

 

[WhenIsItTime]

Luvtoride makes extremely good points, all of them spot on, and there are more.

$1700 for one week seems high to me...but if it is, that determination would obviously depend on lots of factors. That you are able to find others for less than $1000 a year is not necessarily an indicator that $1700 is problematic. Are the ones for less than $1000 a year comparable - maybe they are real losers, with deteriorating properties that have little exchange value? How much of the annual fee is for property taxes for yours and the others you're comparing with? What is the financial strength of the sponsor of the timeshares?

We've owned Disney for over 20 years now - best money we've ever spent. Never exchanged out of network, no need to. Heading back to their Hawaii resort in the spring for the second time. Could sell it with no effort today for double what we paid. Our annual fees are about $1100 and depending when we travel, location and type of accommodations we choose, that can get us 1 to 3 weeks a year. If we paid out of pocket for the same accommodations at the same locations and times of year it would now cost us about $5000 to $7000 a year. For us, this really turned into an investment that paid off in spades.

As Dr Roy points out, $1700 a year could pay for very nice accommodations in many places with absolutely no financial obligation/commitment. However, you need to compare that to the benefits yours would provide.

Could you indicate who the timeshare is through and the specifics about what your contract/deed would provide?

I'm not challenging your situation. My parents had a Hilton timeshare for 20 years that we used quite a bit, but eventually got tired of "home" properties and hassle/lead time required to trade elsewhere. They eventually sold for about 15% of original investment to a broker. My other perspective is 2nd hand at best.

I've never heard of somebody actually realizing a gain on sale. Be great to hear some examples and know what % of ownership yields this outcome.

 

[njhowie]

I've never heard of somebody actually realizing a gain on sale. Be great to hear some examples and know what % of ownership yields this outcome.

Well, in the case of Disney, it is true. I can provide the specific details in a message if you're interested. There is a vibrant resale market with Disney, so liquidity is certainly not an issue.

 

[Sunset]

OP - I advise you to rent it from your friend when they cannot go, you will get the benefit and NOT the obligation.

We own a TS, and when we get to use it, it's a good deal as is right on the beach... BUT they make it incredibly hard to reserve our slot, and throw up all sorts of lies/BS to try to get more money from us. Example: someone would say: "Oh you have to pay $200 for the exchange" when we aren't exchanging

We used to have 2 TS, mine was a deeded week, I got the same week every year and nobody else could use it. There was no BS for that one, but I did get tired of going to the same place each year where I had no friends, and had seen everything around. It's not like going to a cottage where you develop friendships with the neighbors. I handed it back. I had bought it for $1K on ebay so no big loss.

There are sites where you can rent a TS, I did that one year, rented 1 week at Branson Mo, for $280. That's a lot cheaper than the maintenance fee!

 

[mystang52]

Disclaimer: I did not do an in-depth analysis, so this is a gut reaction response to OP: The ones who are happy Timeshare owners likely did considerable research before buying, and based on the 2 replies here they use their timeshares a lot. OP seems to be interested only because a friend offered it, vs having his own interest in getting one. I suspect OP would NOT be one of those eventual happy owners/
To each his/her own, but I like the simplicity of my vacation planning without feeling any obligation that would be tied to a Timeshare ownership.

 

[Luvtoride]

There are obviously two schools of thought on Timeshare ownership and I doubt either side could convince the other to their way of thinking.

If one takes the time to research and understand how to use them within their vacation system they are generally happy/ satisfied. I too would be a doubter if I had to go to the same place all the time during the same period.

One other consideration. When we stay in a timeshare we are staying in accommodations that are much larger then a hotel room. Usually 2 bedrooms, 2 baths, living room, dining room and full kitchen. We also know the quality of any Marriott timeshare that we stay at. Not the same at other brand timeshares or Air BnB accommodations.

 

[ModestNestEgg]

I also have a friend who has a semi-hobby of going to timeshare presentations to get a free mini-vacation and other goodies that they give out.

He is very good at saying no, and seems to derive some enjoyment out of "beating" these high pressure tactics. His secret seems to be acting polite, but maintaining absolute disinterest (from a lack of questions, lack of discussion with the sales reps., polite but very short responses to everything, disinterested body language, not being afraid of social awkwardness, etc.) from start to finish.

 

[brett]

We had a very enjoyable week at the five star Twin Sands development in Phuket. We paid 60E to process the reservation.

We had a somewhat high pressure sales meeting until the friendly British salesperson realized no sale and said let's go for lunch on me. A few days later transportation to another resort, dinner, entertainment, but no sale.

There was a benefit. We had a fabulous room and great 7 day day. We met an Australian couple who introduced us to Thai food. We are friends with them today and meet up with in both Thailand and Australia every few years.

Prior to the first pitch we did a google search on the company. Nothing but red flags, tales of woe, and advice not to give them our credit cards.

Similar story in Ormond Beach (Daytona). We said no, no , no, collected our promised $100 cheque, and left. Salesperson was getting ugly. We looked up the timeshare resale prices. Anywhere from 10-25 percent of so called list.

 

[Souschef]

We almost bought one years ago, My late wife sat down and worked the numbers. and said we could stay anywhere for less than the cost and maintenance fee.

 

[Sunset]

There are obviously two schools of thought on Timeshare ownership and I doubt either side could convince the other to their way of thinking.

If one takes the time to research and understand how to use them within their vacation system they are generally happy/ satisfied. I too would be a doubter if I had to go to the same place all the time during the same period.

One other consideration. When we stay in a timeshare we are staying in accommodations that are much larger then a hotel room. Usually 2 bedrooms, 2 baths, living room, dining room and full kitchen. We also know the quality of any Marriott timeshare that we stay at. Not the same at other brand timeshares or Air BnB accommodations.

Some vacation systems are designed to discourage the user, those ones are BAD.
And that's one of the problems, you can't get out of a TS easily in most cases once you find out you are screwed.

Now, I do like staying in a TS much more than a hotel because you get a kitchen, bedroom , living-room, etc...

My old TS that no longer exists was literally a 3 bedroom , 2 full bathroom house with parking for 6-8 cars, on the coast but not on a beach, community pool, dock, etc.. It was nice, just became boring for us.

 

[Sunset]

....
Prior to the first pitch we did a google search on the company. Nothing but red flags, tales of woe, and advice not to give them our credit cards.

Similar story in Ormond Beach (Daytona). We said no, no , no, collected our promised $100 cheque, and left. Salesperson was getting ugly. We looked up the timeshare resale prices. Anywhere from 10-25 percent of so called list.

Our existing one is in Ormond Beach, you avoided a big problem or at least a pain in the butt trying to use it each year.

 

[Sanstar]

I also have a friend who has a semi-hobby of going to timeshare presentations to get a free mini-vacation and other goodies that they give out.

He is very good at saying no, and seems to derive some enjoyment out of "beating" these high pressure tactics. His secret seems to be acting polite, but maintaining absolute disinterest (from a lack of questions, lack of discussion with the sales reps., polite but very short responses to everything, disinterested body language, not being afraid of social awkwardness, etc.) from start to finish.

I did the same thing once at a Vegas presentation. Week at a resort condo, just needed to listen to the presentation for a couple hours. It ended when they weren’t able or allowed to show me the contract before signing. Whoever would sign a contract without reading it When I asked the presenter if she owned a time share her response was, “Oh, no”. Ha ha!

 

[brett]

After we said no to the Ormond Beach timeshare the salesperson turned us over to a different salesperson.

Next up.....they attempted to sell us membership in some hoaky travel club. It was pathetic. Must have thought that we just fell off the turnup truck and bumped our heads. We were going going to get hotels at cost, 30 percent discounts on flights. It was all so wonderful. Pay $6K now and save thousands in the future.

We travel frequently. This was BS. The salesperson turned very nasty when we said no, yet again.

Water off a duck's back. I spent my career in sales. It was interesting to see the patter, the attempt at pressure, and the attempt to move over to my spouse and attempt to work her over. No sale again. So sad.

 

[disneysteve]

I know and understand the arguements about timeshares. I have had friends who skillfully take advantage of them but also heard plenty of horror stories. I have always avoided them partly because my job has never been such that I can rely on a specific week off each year.

Today an acquaintance offered to give me her time share for free! Obviously that is a bad sign. In her case she is paying $1700 a year in maintenance for 1 week. She is usuallable able to use the week so it is not horrible. But because of Covid she has accumulated unused time and so has everyone else so it seems to be impossible to use time right now.

Out of curiosity I looked at timeshares for sale tonight and there are many, hundreds, available for free with less than $1000/year maintenance fee. I know that is a bad sign.

But as I approach retirement, is it worth being a vulture and scooping up one or two places, signing up for $1500 a year in fees in exchange for lodging I will actually be able to use?

Trust me, I'm skeptical, but as my friend described it, it seems like the current crisis is covid related so it might be a vulture opportunity not to miss

Do you really need an answer? You see the red flags waving all over the place.

 

[COcheesehead]

When I was buying real estate, the one mantra that played over and over in my head when I looked at a below market property was “get it as a deal, have to sell it as a deal”.

 

[disneysteve]

Well, in the case of Disney, it is true. I can provide the specific details in a message if you're interested. There is a vibrant resale market with Disney, so liquidity is certainly not an issue.

This is true. Disney, as far as I know, is the ONLY timeshare that actually holds and even increases in value. All of the others are completely worthless, which is why you see so many listed for free. They literally have zero value. They are financial liabilities, not assets.


We have stayed in timeshare units numerous times but we don't own one. Anytime we've wanted one, we rented it for a fraction of what it would cost to own the same unit. It's been quite a few years but we used to use a site called SkyAuction and rented timeshares for as little as $37/night on several occasions.



With the possible exception of Disney (which I don't think is worth it either but that's a personal opinion) you should avoid buying one like the plague. They are very freely available for rent without the lifelong commitment.

 

[brett]

What struck me when I started to browse the timeshare resale sites was how many were selling for nothing or a fraction of their original cost.

Something is worth what someone else is willing to pay for it. Our strong impression is that the resale market is most definitely a buyers market...and then some.

I have no doubt that there may be some very good, and very well managed timeshare offerings that deliver value to the subscribers. We may not have seen then.

After a little research I also found two papers on timeshare marketing costs. Both claimed that the standard marketing cost budget (sales commissions, etc) represents 30 percent of the cost of the timeshare.

We decided against timeshares for three basic reasons. We did not want what appeared to be a lifetime financial commitment over which we had little financial control vis a vis annual mtce premiums.

The second reason was we did not want to be tied down to one location or one firm, or several firms. We wanted flexibility.

The third reason...many owners seem to place their units on the rental market for a variety of reasons. Renting continues to be a solution to our first two reasons above. Absolutely no reason for us to buy.

 

[SecondAttempt]

Disclaimer: I did not do an in-depth analysis, so this is a gut reaction response to OP: The ones who are happy Timeshare owners likely did considerable research before buying, and based on the 2 replies here they use their timeshares a lot. OP seems to be interested only because a friend offered it, vs having his own interest in getting one. I suspect OP would NOT be one of those eventual happy owners/
To each his/her own, but I like the simplicity of my vacation planning without feeling any obligation that would be tied to a Timeshare ownership.

OP here. I appreciate all the replies so far. Just to clarify, I am not seriously considering my friend's place because I tend to avoid entering into significant financial transactions with friends. But her offer made me do some research and that is how I discovered what is available. Her biggest beef is that after covid there are so many people with "weeks" saved up that it has become nearly impossible to book and that has caused her to resent the maintenance fees. Pre-covid she was a happy owner who made her annual pilgrimage every year and felt she was getting a good deal.

For the record, most of the $0 properties I found are through Shell Vacations. Maybe that is a red flag. They have properties in several places I routinely visit already.

As I said, I have never felt like I am a good candidate for timeshare ownership because of work. Being retired would change that. And my friend's problems seem to be temporary and covid related. I am not looking at this as an investment but rather more as a potential vulture opportunity. I am leaning toward not doing it but felt I needed to ask.

The fact is, taking on a $1500/year obligation would not significantly change my lifestyle or financial situation. I think my biggest concern would be how much that can go up over time. My friend is retired and not worried about her credit score. She is considering just not paying. The recourse would be for the organization to foreclose. But she seems fairly immune to that.