Can someone explain time sharing?

[FloridaJim57]

In plain, simple English can someone explain the concept of time-sharing? Don't get me wrong, I have no plans to purchase a time share just wish a better understanding of a term I have heard quite often.

 

[COcheesehead]

You “buy” a property that you can then stay at for two weeks a year (the same two weeks) or trade it for another property you can stay at for the same two weeks a year. You also pay a maintenance fee forever. You contract is almost iron clad so you will pay for a property that in reality has no value. In return, you get a free lunch at the beginning of the process. Oh and if the property needs an upgrade, you’ll be assessed for that too, but that does not include the lunch. File under “there is no free lunch.”

 

[PaunchyPirate]

The timeshare that my parents sunk money into was set up on a points basis. The basic unit of points was enough to be traded in for 2 weeks at a building in Myrtle Beach, their "home" location. They could also buy more points per year to stay more than their original 2 weeks. They weren't really tied to a specific condo unit inside the building. There was a nationwide network of buildings run by the same company as well as an extended network of similar companies that shared a booking system. My parents could use their points at the home location or request to trade them in for other locations, much like a hotel reservation service. Better locations around the world cost more points. Crappier locations cost less points. Supply and Demand plays a big part. It can be tough to get a week in Hawaii, even though that's often what the flashy brochure focuses on.

As COcheesehead says above, there was an upfront purchase cost (for the points, in our case) and then a monthly maintenance fee. The maintenance fee was tied to their home building. So if that building needed a new roof, their fee would go up. Their fee crept up to several thousand dollars per year. There is also a continuous push by the management company to get you to buy more points. The sales pitch NEVER stops. My parents bought more points multiple times, often after being told it enhanced their resale value.

But, there is not a good secondary market for these timeshares that allow you to make any money. My parents finally sold theirs for $1 after paying about $150,000 into it over the years.

Granted, they spent many weeks in nice condo units at various locations around the county. Usually up to 6 weeks per year for at least 10 years or maybe more. But I'm not sure they got $150,000 of value out of it. They were happy to have the financial burden taken off their shoulders.

 

[COcheesehead]

In follow up to my tongue and cheek (though not really) response above. My sister had one in an area that enacted building restrictions so housing and rentals were hard to come by. She eventually sold it $7000 having originally paid $15,000 and years of maintenance. Her story is the only one I have heard of where someone walked away with some money at the end.

 

[phil1ben]

Understand that there is a resale market for timeshares. Never buy retail from the sponsor or developer because they sell for pennies on the dollar on the resale market. Before any purchase go to TUG2.net and spend time reading in the forum designated for the timeshare you are interested in.

I have bought Hilton timeshares resale and paid 3-5% of the what the original owner paid. However, this discount only applies to the purchase price and you must continue making the annual payments which can be raised at the whim of the sponsor. I like Hilton because of the process and the flexibility of using the allotted points. There is no designated week and I can use my points anywhere in the system SUBJECT TO UNDERSTANDING THE SYSTEM WHICH HAS SOME COMPLEXITIES. LASTLY, DONT BELIEVE A WORD ANYONE IN THIS INDUSTRY TELLS YOU. VERIFY EVERYTHING IN WRITING, EVEN THE SMALLEST DETAIL.

More importantly, do not buy unless you will actually use the timeshare every year or all the available points.

 

[njhowie]

But, there is not a good secondary market for these timeshares that allow you to make any money. My parents finally sold theirs for $1 after paying about $150,000 into it over the years.

Depends on who is backing the timeshare and demand.

We own Disney Vacation Club. Purchased almost 22 years ago. We could sell today instantly for almost triple what we purchased for.

Our only regret is that we didn't purchase sooner.

 

[Magus]

Understand that there is a resale market for timeshares. Never buy retail from the sponsor or developer because they sell for pennies on the dollar on the resale market. Before any purchase go to TUG2.net and spend time reading in the forum designated for the timeshare you are interested in.

I have bought Hilton timeshares resale and paid 3-5% of the what the original owner paid. However, this discount only applies to the purchase price and you must continue making the annual payments which can be raised at the whim of the sponsor. I like Hilton because of the process and the flexibility of using the allotted points. There is no designated week and I can use my points anywhere in the system SUBJECT TO UNDERSTANDING THE SYSTEM WHICH HAS SOME COMPLEXITIES. LASTLY, DONT BELIEVE A WORD ANYONE IN THIS INDUSTRY TELLS YOU. VERIFY EVERYTHING IN WRITING, EVEN THE SMALLEST DETAIL.

More importantly, do not buy unless you will actually use the timeshare every year or all the available points.

This! I did the same approach, and with Hilton's flexible system, bought the lowest maintenance fee/point and can get rooms for about $25-$30/night for studios or $80 to $100 a night for 2-3 bedroom townhomes (maintenance fees per point spent). In general, besides Hilton and Marriot's system, I'd generally stay away but they can work in the right circumstances. Tug is definitely the best place to start if interested. (Disney's is fine too but even Resale disney prices are nuts - and you can use RCI to trade into Disney at times with Hilton or just stay at one of the Hilton places)

 

[pacergal]

Both of my brothers and their spouses have bought into "point systems", not sure which ones. One brother is retired and they consistently use theirs every year. The other one does not and they talk about how they lost their points. I don't understand why they don't go on vacation after buying into a vacation club?
My folks bought into a condo timeshare in Kauai in their retirement in the early 1990's . They started with 2 weeks, bought up to 4. They went every year with friends and stayed for the month. They loved it, and used it well. We took it over after my mom went on oxygen and got too ill to travel. We kept it for two years. We were not retired yet and did not see ourselves going there yearly, even though it was beautiful. In the two years we had it, the price doubled, as it was neglected and needed pricy repairs. We just gave it back when they told us they had a buyer.

 

[RetiredHappy]

Go to tugbbs.com if you want to learn about timeshare and the various large systems. We tell newbies to always buy resale. There are very few instances where buying from developers make sense. We own at Marriott Vacation Club system and are very happy. Our accommodations are luxurious, large 2BR suites for very little maintenance fees in comparison to paying hotel rates. We are currently staying in a 2BR 2BA lockoff 1800 sq ft with one full kitchen and 1 partial kitchen (friends staying at the locked off unit) for 3 weeks in Palm Desert CA. In March we will be heading down to Carlsbad, CA and staying in the Four Seasons timeshare for a week.

Last year we spent 2 weeks in Hawaii in an ocean front villa, 2 weeks in Palm Desert, 2 weeks in Newport Coast CA and a week in Scottsdale, AZ. We always book a 2BR, 2BA and invite friends to stay with us.

 

[athena53]

Depends on who is backing the timeshare and demand.

We own Disney Vacation Club. Purchased almost 22 years ago. We could sell today instantly for almost triple what we purchased for.

Our only regret is that we didn't purchase sooner.

I'm not a fan of Disney but I read somewhere that their timeshares had an end date after which you no longer owned them. True? This makes good sense to me since most of the people who are trying to sell timeshares enjoyed them at one time but no longer want them because of deteriorating health, kids grown up, etc.

 

[njhowie]

I'm not a fan of Disney but I read somewhere that their timeshares had an end date after which you no longer owned them. True? This makes good sense to me since most of the people who are trying to sell timeshares enjoyed them at one time but no longer want them because of deteriorating health, kids grown up, etc.

This is true. Legally, it is a lease for a specified number of years and then ownership reverts to Disney Development Corp. When a new timeshare property is constructed, sales are for a term of 50 years with a specified termination date. Regardless if you buy from Disney or resale, the termination date still remains the same for all units at that property, 50 years from the original opening date of the property.

We purchased ours in 2000. The termination date is in 2042 (original sales for the property were in 1992). Some years ago, Disney made an offer to extend the termination date by 15 years through 2057, and we paid the fee (I believe it was $2500) to do that.

 

[Sunset]

This is true. Legally, it is a lease for a specified number of years and then ownership reverts to Disney Development Corp. When a new timeshare property is constructed, sales are for a term of 50 years with a specified termination date. Regardless if you buy from Disney or resale, the termination date still remains the same for all units at that property, 50 years from the original opening date of the property.

We purchased ours in 2000. The termination date is in 2042 (original sales for the property were in 1992). Some years ago, Disney made an offer to extend the termination date by 15 years through 2057, and we paid the fee (I believe it was $2500) to do that.

That automatic termination date actually makes their timeshare more attractive to me. Currently we have a TS and since it's co-owned, I don't see any way to get rid of it when the time comes. It's fine right now, but will be an issue later.

 

[Dtail]

Part of our upcoming Vegas trip will be spent at a discounted Hilton property in exchange for the 2 hour selling presentation.
This is my 3rd time doing this, with no chance of me purchasing a time share. A couple of well placed words at the end does the trick.

 

[FLSUnFIRE]

Quite a few acquaintances and friends that are amazed I am FIRE'd have at least one timeshare. So many are either impulsive buys or made under under high pressure but they feel it's "rich" to have a vacation property and talk like they own the place. None seem to regret their purchase but I don't think the enjoyment for their $ is a good ratio. My ex and I went to a local sales pitch for the offered give-aways when sent an invite and when we said we were not interested at the end they yelled at us and asked why we came (because we were invited)!



I've rented unused timeshare time before and found it to be a great way to have nice accommodations cheap... especially if traveling on shoulder season (my preference to avoid crowds). I'm no longer eligible for the broker I used (Armed Forces Vacation Club) but there are others out there. I'm actually glad this thread popped and reminded me of this as I now have time to travel more!

 

[VanWinkle]

This is true. Legally, it is a lease for a specified number of years and then ownership reverts to Disney Development Corp. When a new timeshare property is constructed, sales are for a term of 50 years with a specified termination date. Regardless if you buy from Disney or resale, the termination date still remains the same for all units at that property, 50 years from the original opening date of the property.

We purchased ours in 2000. The termination date is in 2042 (original sales for the property were in 1992). Some years ago, Disney made an offer to extend the termination date by 15 years through 2057, and we paid the fee (I believe it was $2500) to do that.

Time value of money?

Seems the cost for an extension in 2042 may end up costing more than 2500.
Not judging, just wondering if that was part of your decision.

VW

 

[capjak]

I own Disney/Hilton/Westin/Sheraton/Marriott, all bought resale for 10 to 50% of resale. All can be sold for close to purchase price today and DVC can be sold for 2x my purchase price (but not going to sale so doesn't matter).
I rent DVC and sometimes my Maui Westin for 2x maintenance fee and than vacation every year for several weeks at a lower cost.
They are not investments, obviously, but if you vacation in luxury condos every year it can work out very well.
I used them at a small fraction of the places that are available: These are the places I have been all with full kitchens/Washer dryers and separate bedroom/living rooms.....Maui/Kauai/Big Island/Ohau/Orlando/Las Vegas/Hilton Head/Palm Springs/Atlantis bahamas/St John/St Thomas/Puerto Vallarta/Cancun/New York City/Chicago/Phoenix/Miami/Ft Lauderdale/Marco Island/San Antonio/Colorado ski/Park City ski/Illinois/Wisconsin.

Tug is a good source as well as redweek.

What are they? Resort Condos studios to 3 bedrooms that can be reserved anytime of the year in 100s-1000s of different places based on availability and ability to plan 8 to 12 months in advance.
You pay an upfront cost and annual fee (maintenance fee) in exchange for use of the timeshare: I have paid as little as $2,000 for a Timeshare (Sheraton Vistana Villiages 2 bedroom every year-I exchange it for a week in a 1 bedroom every year Maui at Westin KORV) to as much as $19,000 (2 bedroom Oceanfront Maui Westin Kaanapali Ocean Resort Villas, I split it into a 1 bedroom and studio and stay 2 weeks every year).

They have definitely made us travel more and made it convenient with washer/dryer kitchens etc... But they were bought prior to the more recent condo rental programs. Many timeshare are rented out on VRBO and other airbnb like sites (redweek.com).

There are people that full time timeshare (52 weeks per year) for very little cost. If you own 1 timeshare you have access to Interval International and RCI which allow unlimited weeks purchases for cash, of course inventory is limited in high demand times/locations.
https://fulltimetimeshare.com

 

[Katsmeow]

I'm not a fan of Disney but I read somewhere that their timeshares had an end date after which you no longer owned them. True? This makes good sense to me since most of the people who are trying to sell timeshares enjoyed them at one time but no longer want them because of deteriorating health, kids grown up, etc.

Back when our kids were young (early 2000s I guess) we bought in the Disney Vacation club and it had an expiration, yes. I assumed at the time that if we resold we would sell for a big loss since some of the time would be "used up" by that time. We did end up selling after several years. However, we sold for more than we had paid!

Overall I was happy with the whole thing. We ended up selling because we wanted to go on vacation to other places and felt too locked in to Disney (although we could use points for other things, it was complicated).

 

[Markola]

Timeshare: The act of succumbing to a sales pitch during one’s first euphoric visit to a beautiful location, leading to an impulse purchase based of the promise of guaranteed, affordable future vacations, but which actually results in cascading annual maintenance fees that, together with the purchase price, is more expensive than a five star hotel, and an aggressive organization in your life which neither you nor your heirs will ever be rid of. Other than that, Mrs. Lincoln, how was your night at the opera?

 

[athena53]

Timeshare: The act of succumbing to a sales pitch during one’s first euphoric visit to a beautiful location, leading to an impulse purchase based of the promise...

You can bypass that part by buying in the secondary market- a friend once told me he'd bought a couple of timeshare foreclosures in Myrtle Beach and used them. That was maybe 20 years ago- I'd be curious how that's working for them now.

I'm surprised that more don't adopt Disney's model. I'd feel a whole lot better buying one with a fixed end date, and it gives the property owner a chance to re-price it.

 

[ElizabethT]

I'm not seeing reference to specific maintenance costs, just specific purchase prices. Can any one go there and share actual costs, i.e., purchase + annual fees over time?

Though not my thing, I can understand wanting familiarity, which is what I perceive timeshares as delivering. What I struggle with is why not simply RENT them for your vacation instead of getting locked into a timeshare contract?

 

[COcheesehead]

We’ve thought about having a cabin somewhere which in some ways is like having a time share. Go to the same place every year, need to pay maintenance. It sounds sort of romantic and cozy in a way, but then we quickly realize, we rarely, if ever, return to the same place for vacation. We learned long ago that discovery and exploration of someplace new is part our vacation experience that makes it fun.

 

[Closet_Gamer]

You can also do time shares (fractional ownership) on planes and boats. I've never done one of those, but strikes that these could make a lot of sense in the right circumstances.

 

[Markola]

You can bypass that part by buying in the secondary market- a friend once told me he'd bought a couple of timeshare foreclosures in Myrtle Beach and used them. That was maybe 20 years ago- I'd be curious how that's working for them now.



I'm surprised that more don't adopt Disney's model. I'd feel a whole lot better buying one with a fixed end date, and it gives the property owner a chance to re-price it.

Regardless of purchase price, just be sure to have a clear understanding of annual maintenance fees and how rapidly they are appreciating. My mother owned and used a nice-enough timeshare for years but the maintenance fees were growing so rapidly that the owners had to organize and lawyer up. AirBnBs are enormously simpler and probably cheaper.

 

[DJRR]

At its simplest it is joint ownership. I have owned Marriott for over 20 years and when I cared to track it I paid ~ $150 per night for a 2 bedroom condo in a nice resort with nice free kids programs. That included a 5% cost of capital on my initial investment. I am lifetime titanium with Marriott so always got nice rooms and treatment YMMV. I look at it as a car. It has an upfront charge and you can't use it unless you pay for gas and repairs. If used correctly it is cheaper than a rental or an Uber. It is not cheap and you can always get a cheaper deal if you put the time in. I have been extremely happy with the results for my family and look forward to another 20 years as I move into retirement and can take advantage of opportunities to stretch my usage.

 

[wolf]

IMHO. Run don't walk from any time share presentation! The fact that you are asking,
might be an indication, you can be "swayed".

Many, time share owners, " cannot give away for free", their timeshares!