Timeshare(s): Bargain or Ripoff?

Preface: The owner and webmaster of this site have been Timeshare owners for 15 years with two timeshare suppliers. One with national name recognition, the other which is smaller and regional. Based on those years, this article or page is prsented. We had considered locating it within the article section, but did not want it to be buried as it is so important. If you are considering a time share, we hope you will find this invaluable.

Timeshare - Bargain or Ripoff
Orig Article by Joe Leech

The short answer: "Depends". And it depends on many things.. first, how you define "bargain". You see, that is relative to value, and also depends on use or satisfaction. It depends on what you compare it to.

We can probably all agree on this: That a vacation in a resort luxury condo is probably more enjoyable than a vacation in a hotel room. This is a dream of Timeshare ownership. This is particularly true for a vacation involving multiple people.. usually children, but it could be multiple people that are other adults or friends. Having space, multiple bedrooms, a kitchen all are plusses. Throw in activity programs, sometimes "bargain" or specials on area attractions, a concierge to book things for you... all become nice to have items. 

But do you have to own to enjoy a timeshare? Defininitely not, for a search of both the Internet and many larger newspapers (if you can still find one that has not ceased publication) will turn up "scads" of rentals, both from private owners and from businesses that specialize in renting time or space for owners.

In fact, one of the key things for you to take from this article is this: Before you ever purchase a time share, you should rent. Not just once, but several times and from different companies. You should rent your timeshare with these objectives in mind: First and obvious is to observe the quality of the company and units. Is the condo you are getting well maintained... or at least seemingly so, starting with the room and items such as "Is the carpeting clean?"; "Is the furniture comfortable and durable?". "Are the in room amenities such as TV, DVD, etc functional and working?" Then as you move to the property: Is the pool clean and well maintained? Is there a good program suitable to my goals and family needs? How does the property outside look? Even looking up.. Does the roof appear to be in good condition? If you are on a multi story unit, is there an elevator? If not and you have a special need.. ask about reservations and can one with a need get on a ground floor? These are some of the obvious things to see in the "real world" as compare to what the time share sales agent will show you in the model unit(s)

Now while renting, the second part of the reason is to have the opportunity to meet and talk with real owners. In most cases where there's a swimming pool, this is a great place to start. But tours, "family barbques" etc are also other places where owners gather.

A few of the key things to ask is the ease and availability of making reservations and getting the location and time you want. More on this in a moment. You want to ask about maintenance fees. What are they? Are they consistent year to year?

Before going further, you need to know, and ask at the sales presentation: Doe the time share company I'm thinking of buying a unit wit (or in) actually own a or the full resort and have control of 100% of the units, or do they only own and control a percentage of them? How many or what percent in various resorts.. particularly if you are thinking of buying with a firm that has MULTIPLE resorts. You are working on getting to know what the REAL availability is.. not what a time share sales shark will tell you.

At one time, you purchased a unit; had a physical ownership of a unit for a period of time at a set location. It was yours, no questions asked, for that time and location. But as the industry evolved, it moves toward a point system where you own essentially nothing other than points and a piece of paper that says you own X points and that these points can be used like money to rent or use a certain unit at a certain location at a certain time.. and that essentially the value of your point will fluctuate substantially as to what it will "buy". The price of the unit you want, in points, is arbitrarily set, and reset, by the time share ownership depending first on location and season. That's the "surface" reason, but underlying reasons have to do with profitability for the timeshare company. They can, will, and do, escalate the point cost of a unit on a rather regular basis without any need to consult you! In most cases, your points depreciate in value on a rather regular and not necessarily consistent basis!

Occupancy of a time share unit is very important to a time share company. Even if supposedly paid for by you, it's not producing full revenue possible to the company, and let's face it.. if you own points, you may not use them every year, instead using a "banking" privilege, so your unit is vacant. This represents a revenue opportunity to the company, and they sell that unit time to many sources. Not totally unlike airline companies over booking a seat. Or an HMO collecting every month even if you don't use a doctor.. and then later want to make an appointment only to find that you can't get one for two months with at least a doctor of your choice!

Now this article may seem to have a negative trend, and not all timeshares are operating in a ripoff mode. But many are and a ripoff is when you expect to get one thing but the availability is not there and your bargain vacation simply disappears. So you need to find the difference between what the sales agent tells you and what owner experiences are in the real sense. You are now learning how to buy a time share in the real world.

As you consider just that, there are a couple of other things to know: First is that if you buy a timeshare at nearly any price, you'll find selling it to be an exceptional challenge. If you buy it new.. and we'll cover this in a moment, you will NEVER be able to sell your time share for anywhere near the original investment cost. In fact, if you can sell it for half the money you invested in it, you are doing exceptionally well.

Is a time share a value or does it represent a bargain vacation? Again it depends on what you compare it to. If you like the idea of a condo and resort and compare it to what you may have to pay "as an outsider" in renting a near identical unit, it can be.. but you need to know your real costs and use. IF you pay $10,000 for a unit or number of points and you plan to keep, and use it for 10 years, your capital cost, not including any interest if you purchased it on a "time pay plan" costs you $1000 a year. Then you will have maintenance fees. Let's say these are $800 a year, so on a 10 year basis your cost is $1800 per year. You use this for 2 weeks or 14 nights. Math is simple: $128 a night. You've had a nice condo for less than the price of a hotel room in any resort. But you need to do your math and calculate how many years you really can or will want to use this. We all get to some point our vacation and travel goals change. Kids grow up and don't want to vacation with mom and dad, or they have families and no space. We all age and maybe we don't want to travel or can't. What happens then? To get rid of the annual maintenance fees, you must divest yourself of ownership somehow, and if you are thinking of even donating your time share to a non profit, forget it. Because of these various maintenance fees, you don't have an asset you can donate.. you are passing on a liability. Talk to your tax person about this.

So to return to a principal theme of this article, "How to buy a timeshare" and to answer the question: "Timeshare: Bargain or Ripooff" you need to make comparisons. First, you DO first heavily gird yourself in sales resistance and resolve and plunge into accepting some of the offers to visit timeshare sales sites. You do this to see the ammenities of the various companies before going about and renting. But take the most massive doses of sales resistance you ever had with you. You never will ever again experience such sales pressure applied in so many ways as you do in a time share presentation. First will come the carrot.. the wonderful ammenities; the appeal to emotion, the fun. Then comes the bribe part now, coupled with the fear of loss.. It's here today on this special and we'll incude not only the kitchen sink, but a full blown.. well, you get the idea. Resist the first offer and it gets doubled. You resist that and decide to out process where you are scheduled to collect the gifts you were promised just for attending, but you are NOT done! You have to run a gauntlet of secondary closers or management! These people know what they are doing and know every sales trick in the book, and if you don't take the "carrot", they do have, and are not reluctant to use, "the big stick". Don't be surprised if you are essentially labled as "ignorant" if you pass up this opportunity.

But IF you can resist this sales pressure, go to a few presentations by different firms. Accept their meal certificates and whatever else they are offering (know first if the incentive is given whether you purchase or not).

Now that you have narrowed your selection to a couple preferred companies, start looking at timeshare rentals, and do it: Rent a time share.

At last, you come to the main question: Do I want to OWN a time share? You have determined that if you own in a certain company, you have some benefits worth your investment. This may be control and access to a certain location at a certain time. That's probably the main reason. You may like the (then) affiliation with an exchange company such as Interval International (This can change).

So if you decide to own.. it's time to do it on the resale market for about half the price of a new from the show purchase. How to buy a timeshare on the resale market could be the topic of a whole new article as this one is apporaching 2000 words.. but in summary, let me tell you that you need to know a couple basics: What kind of deed or ownership are you going to get, and is there any back liability of unpaid maintenace fees you will be responsible for?

In conclusion, we'd say that if you are at a point in your life you can look at ownership and use and forecast it out for 10 or so years and you really want a certainty of getting the times and locations you want, that may not be available to you as a renter, and if you can get the unit at an acceptable price, then you may have purchased a great bargain vacation. You may not currently vacation at all, and we all read that a good vacation goes a long way toward good mental health. If you OWN your time share, you may feel you MUST vacation if for no other reason than to get a value on your investment. Go ahead, buy one. But if you only will vacation occasionally; you'd rather have the unknown risk of finding a rental when you want one vs the unknown of what maintenance fees will be; how your investment will appreciate or depreciate, then rent. You'll never have to face the question of "How Do I Dispose of this Timeshare?".