Author Topic: Do timeshares ever make sense?  (Read 7171 times)

Gyosho

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Do timeshares ever make sense?
« on: June 07, 2016, 01:34:41 PM »
I was recently on vacation in Maui at a fancypants resort. One of the couples in our group confessed that they were there on their timeshare points, which were significantly cheaper than what the rest of us had paid for the week. They smirked very nicely about it, and said they take timeshare vacations once or twice a year.

I am pretty high on the Mustachian scale, but I do like nice vacations in Hawaii. Given this fact, would a time share make sense? Are there any Mustachians who own time shares and are happy with them? I can't find any unbiased information anywhere on the Internet, but I know Mustachians can provide a good cost/benefit analysis.

Cassie

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Re: Do timeshares ever make sense?
« Reply #1 on: June 07, 2016, 01:53:58 PM »
The maintenance fees go up every year and are high. Many people will give them away or sell them dirt cheap to get out from under the maintenance fees. They are also sold dirt cheap at tax sales. A few friends own them and have to book a year or 2 in advance to get where they want.  My Dh bought 4 at a tax sale that were in Lake Tahoe for a total of 6k. I wanted to kill him. Eventually I sold 2 on ebay for 350.00 and gave the other 2 away and even had to pay the maintenance fees and transfer fees for the first year to get rid of them.  I never let him go to another tax sale without me:))

boarder42

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Re: Do timeshares ever make sense?
« Reply #2 on: June 07, 2016, 02:04:28 PM »
i've researched this b/c my gparents are giving theirs to a family member and i thought i may be inerested

some reasons people may use them
1. people who have trouble making time for vacation but since they've put the money towards it will use it (basically forces them to take vacations) - NON mustachian reason
2. If you can get it for free or very cheap on the second hand market and use it to its full potential with the last minute bookings and loop holes that come with a flexible schedule basically if you're FIREd - MAY be worth it.
3. if you pay retail they will never be worth the cost - your friends week may have cost them 1000 dollars in dues but that doesnt take into account the 30-50k the likely paid for it.

so lets just stop and think about that 50k for a second.  you invest that 50k and it makes you 3500 at 7% annually.  thats a lot of vacation right there.  Lets go one step further and see you're a mustachian so you dont pay retail prices for vacation you travel hack with credit cards - i went to Maui this march for 10 days with my wife in first class with a jeep rental car and stayed at 5 star resorts (see Grand Wailea)  and my out of pocket cost for that was 0 dollars.  so now you still have 3500 in the bank and you can take another trip.  my wife and i planned a cruise to Europe in December. 11 days includes drinks - balcony cabin.  total out of pocket cost expected to be 500-1k for the whole trip including flights and shore excursions.  so we'll still have 2500 in the bank to compound with for the next year plus any extra gains.  plus we havent even factored in the maint. fees they are paying which is likely another 1500-2k

but as for item 2 when you're FIREd you can do what the retired couple we met on our honey moon in Kauai does every winter.
1. buy a truck with a shell on the back in the states load it with camping gear clothes/beach stuff/bikes - ship it to the islands.
2. camp out on the beach using the truck as your bed if weather is bad while searching CL for a reasonably priced monthly condo
3. rent a condo for 450 a month on the beach and bike everywhere.
4. sell truck in hawaii when you leave for more than the cost plus shipping b/c people pay a premium for vehicles over there

all inall we arent even going to be taking my Gparents FREE time share b/c we dont see the value in it.
« Last Edit: June 07, 2016, 02:11:22 PM by boarder42 »

boarder42

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Re: Do timeshares ever make sense?
« Reply #3 on: June 07, 2016, 02:19:30 PM »
Are there any Mustachians who own time shares and are happy with them?

I inherited the timeshare and it was originally purchased in the early 90's I think. It's not a big fancy resort timeshare, it's a smaller family oriented place on the beach, probably under 200 units all together. This means they don't have the points system I've heard about elsewhere. I have one unit that I can use for a certain week (Saturday 3pm through Saturday 9am) per year, or I can contact the property managers with the standard form saying I'd like to rent it out for the year. They handle the rental and even after their fee and the annual dues I make a little money (not enough for it to be an investment property, IMHO). The years that my family uses it we enjoy the fact that we're already familiar with the area and the (limited) amenities. The property has an ongoing flyer that they hand out to whoever is staying for the week with the units that are currently up for sale (basic info: bedrooms, bathrooms, unit number, price), so it's pretty much the opposite of the sales pitch I've heard about elsewhere. Overall I'm very happy with it, but it's very unlike what most people think of when they hear "timeshare".

i would say what you just described is the original thing most people do think of when they hear time share.  they are way different now and the systems can be worked to your advantage but at the end of the day in most you're stuck with a payment regardless of whether you want to travel or not.   it also greatly decreases spending flexibility in FIRE if you need to back off spending thats a fixed cost that typically goes up slightly faster than inflation.

Beriberi

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Re: Do timeshares ever make sense?
« Reply #4 on: June 07, 2016, 02:23:01 PM »
A fun thing to watch is Queen of Versailles -- its a documentary and it is available on Netflix. Is is about a guy who is a time share billionaire who loses a lot in the economic downturn of 2007-8.  It gives a peek into the marketing of time shares, and the crazy excess of his family.  It doesn't paint a pretty picture.

One of the take home messages about time shares was that no one, NO ONE, buys one except on the day that they are pitched. (This applies only to the first-sale market, Westgate propreties).  You never, ever sleep on the idea and then decide you should buy.  Which hardly makes it seem like a good idea.

acroy

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Re: Do timeshares ever make sense?
« Reply #5 on: June 07, 2016, 02:55:05 PM »
A fun thing to watch is Queen of Versailles -- its a documentary and it is available on Netflix.
great show!
Timeshares are not worth it to purchase 'new'
Plenty available for little or nothing 'used'
Or just purchase the rental through VRBO or equivalent.

There are special cases: years back, I got a nice deal for 'points' in one of the timeshare systems. It worked out to about $75/night in Hawaii at a very nice place, $40/night in Branson at an older place.

StarBright

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Re: Do timeshares ever make sense?
« Reply #6 on: June 07, 2016, 03:18:02 PM »
I've mentioned this in another thread but I'll recap here. My parents bought in to a points based timeshare (DVC) and love it and use it several times a year. My brother and I and our families also use it fairly frequently. DVC is also not owned forever, it is like a 55 year lease or something similar ( a good thing).

If you are traveling frequently to the location of the timeshare, and think you will continue to travel there in the future I think it could be worth it if you are able to buy the points/share on the resale market and if there is a good rental market for the property. Other important things to look for are the ability to bank/borrow/roll over points and to make sure they are tradeable. If my parents don't feel like going to any of the disney properties in a year and don't feel like renting them out they can usually roll over points. They can also essentially use like 3 years worth of points to take nicer trips - several years ago they ended up using a couple years worth of points to take an Alaskan cruise and ended up basically paying the same in maintenance fees as they would have if they paid for the cruise outright.

I don't think they are a good deal for most people but I'm not against time shares completely. If you run the numbers and they look good for you then it might be worth thinking about.

ltt

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Re: Do timeshares ever make sense?
« Reply #7 on: June 07, 2016, 03:30:39 PM »
I wouldn't do it--and I considered it, but only briefly after we took a trip to Maui---absolutely gorgeous, but unless you absolutely know for sure that you will be able to travel at a certain time every year for $xxx amount of years, I'm not sure it's worth it.  The maintenance fees would be expensive.  And what if you wanted to sell it??  What then? 

Here's a link to Maui timeshares on ebay:

http://www.ebay.com/sch/i.html?_from=R40&_trksid=p2050601.m570.l1313.TR3.TRC2.A0.H0.Xmaui+timeshare.TRS0&_nkw=maui+timeshare&_sacat=0

Please note on the very first listing, it states "based on availability only." 
« Last Edit: June 07, 2016, 03:33:47 PM by ltt »

paddedhat

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Re: Do timeshares ever make sense?
« Reply #8 on: June 07, 2016, 05:07:40 PM »
My mother had one, and it became part of her estate. It was a difficult "asset" to liquidate. It was also a pretty interesting mess to ponder. It was a legitimate real estate holding, filed in the local courthouse, with a deed showing a percentage of ownership of a specific unit.  It had a negative value, since there was no actual resale market. Local realtors didn't want to touch it, and there was no verifiable evidence that any of the "timeshare re-sellers", could prove that they could liquidate it. Those chucklenuts did however want several hundred, to several thousand, dollars to attempt to find a buyer. In the end the HOA of the resort agreed to take it back, if I paid all the various legal fees and taxes, and the transaction didn't cost them a penny. The most irritating cost was a 2% county transfer tax, based on the county's  judgement that the one dollar transaction was actually worth $8K, LOL.  My estate lawyer was happy to cut a check for a couple of hundred in closing fees and taxes, based on the fact that I was damn lucky to just be rid of it.

As you may of guessed, when it comes to timeshares, I'm not a fan.

MoonShadow

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Re: Do timeshares ever make sense?
« Reply #9 on: June 07, 2016, 06:56:06 PM »
A timeshare contract is not a liquid asset, and are hard to sell should you need to.  However, if you are 99% certain that you won't be taking vacations anywhere else for the life of the contract, it might be a fine deal.

katsiki

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Re: Do timeshares ever make sense?
« Reply #10 on: June 07, 2016, 07:13:05 PM »
Run!!!  I made a serious mistake of buying when I was young.  (I don't think I was even qualified to buy one but they made it "work" which should give you an idea).  It was a terrible decision and we loss a couple thousand dollars unloading it. 

It might make sense to buy one used very cheaply but I would be sure you understand the annual fees.

albireo13

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Re: Do timeshares ever make sense?
« Reply #11 on: June 07, 2016, 07:45:42 PM »
Nope!

mpg350

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Re: Do timeshares ever make sense?
« Reply #12 on: June 07, 2016, 07:56:29 PM »
Maui was amazing, my avatar is from my Maui trip.

The only way I would think about a timeshare was if the price was dirt cheap like under $500 and the yearly fee was cheaper than the price of visit for a week, if you found that and its place you would consider visiting every year I guess it could make sense for you.
Just gotta find a desperate seller.

Goldielocks

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Re: Do timeshares ever make sense?
« Reply #13 on: June 07, 2016, 08:12:44 PM »
I purchased one about 10 years ago...  during my non MMM phase.  (Could not think of what else to do with my bonus.... grrrr to old me)

Timeshares
1)  The ones with exchange programs are best for people with very flexible schedules (not travelling on holidays), that like travelling "off season".  Many RE people I know love theirs for the same reason I dislike it.  I have not been able to make an exchange for the past 2.5 years, despite leaving things wide open and looking far, far in advance.  I have kids in school.  Summer in the midwest or northern states, anywhere at christmas, summer in the rockies and weekends at ski hills in season are all hard to book.  Europe is a challenge, too , most units are in "cottage country" not near cities...(air BNB and travel hacking is so much better for Europe).

2)  You are better going for an every other week, with the lower annual dues and overall commitment.  After 5 years, you will no longer think you have too many points.   I could easily use mine and alternate with variety vacations each year.  The annual dues keep increasing.  Some people wanting more exchange "points" will buy a second very cheap unit in south america.  Those are the ones that already find they travel a lot and use up all their points quickly and know what they are getting into.

3) Buy used, and treat it like a sunk expense, that you will donate for $0 when you are done with it, just to get rid of the maintenance fee.  (Those start at $600 per year to over $1000/yr for many of the nicer locations like Hawaii or DVC).

4)  Alternate if you know you will never move from your location -- get a week at a place you love, that you can drive to each year.  Those airline fees can really add up, so much so that it makes more sense to airBNB or rent from another timeshare owner.  (

5)  You can airBNB your week, with some (paying a guest certificate) or sell your use points at 75% of your annual maintenance fee, which is a hassle, but a decent backstop.

6)  many of the exchange properties (with RCI, a big outfit) are not high end "resort"...   I am not fancy, and love having separate bedrooms and a full kitchen in a great location, so that is A-OK with me, but to read other reviews, a lot of people out there really want that Disney or Marriot quality experience.

7) COSTS -- It costs $130+ a year for the exchange program registration, $70 to $160 per booking (for a week), sometimes there is a housekeeping or resort fee on top, plus maintenance fees of $500 to $1200 per year (or more).  Exchanging into Hawaii (other than an interior island golf unit) could cost you $1100 for 7 nights, for a unit away from walking to restaurant/tourist areas, that was last renovated in 1986.   Still a deal... if you did not pay much up front to buy your timeshare initially.

7b)  Cheaper cost options -- buy used, keep a fixed week a year, and never exchange it.   $800/yr (est) maintenance fees + initial cost for 7 days per year. 

If it still makes sense, then yeah, go for it.   Just be warned that like a boat or RV with annual costs and storage fees, it can get tiring quickly.


CHECK IT OUT   This is the best website for Resales and Rentals (most are offered directly by owners)

TUG2.NET
tug2.net
« Last Edit: June 07, 2016, 08:17:38 PM by goldielocks »

SimplyMarvie

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Re: Do timeshares ever make sense?
« Reply #14 on: June 08, 2016, 11:48:55 AM »
My mother had one, and it became part of her estate. It was a difficult "asset" to liquidate. It was also a pretty interesting mess to ponder. It was a legitimate real estate holding, filed in the local courthouse, with a deed showing a percentage of ownership of a specific unit.  It had a negative value, since there was no actual resale market. Local realtors didn't want to touch it, and there was no verifiable evidence that any of the "timeshare re-sellers", could prove that they could liquidate it. Those chucklenuts did however want several hundred, to several thousand, dollars to attempt to find a buyer. In the end the HOA of the resort agreed to take it back, if I paid all the various legal fees and taxes, and the transaction didn't cost them a penny. The most irritating cost was a 2% county transfer tax, based on the county's  judgement that the one dollar transaction was actually worth $8K, LOL.  My estate lawyer was happy to cut a check for a couple of hundred in closing fees and taxes, based on the fact that I was damn lucky to just be rid of it.

As you may of guessed, when it comes to timeshares, I'm not a fan.

Ugh, this is like a preview of coming attractions. My inlaws just increased their timeshare 'investment' so that they had enough to leave it equally to Mr. Marvie and his brother. We have no interest, and the brother has no money so I haven't the faintest idea what we're going to do with the damned things.

mm1970

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Re: Do timeshares ever make sense?
« Reply #15 on: June 08, 2016, 12:31:32 PM »
I have friends who have a timeshare in the Bahamas. I guess it works for them - they've done it most years (one year they offered it up to friends...and it was pretty sweet looking, and it happened to coincide with our spring break...but have you looked at the cost of airfare from CA to the Bahamas for four people???)

I can't see it because
1- I can't see going to the same place over and over
2- I can't see trying to use points with places where you have choices
3- I don't always vacation...sometimes we fly to visit family
4- I don't even fly with the family of 4 every year
5- I'm happy to rent other people's timeshares for cheap.  For example, for spring break last year, we camped 2 nts in Joshua Tree and spent 2 nts in a resort in Palm Springs (or was it 3 nights?)  It was a 1BR apt in a resort, with pools and water slides.  The timeshare sales pitches abounded!  But luckily for us we dodged them - after 2 days camping, we really needed a shower.

I don't even travel hack at all, but I manage to get our vacations down to the cost of timeshares or below with airBNB, or renting condos, etc.

norabird

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Re: Do timeshares ever make sense?
« Reply #16 on: June 08, 2016, 12:39:30 PM »
I can never imagine wanting one--I like traveling flexibly and the whole mentality makes no sense to me. If you're a Disney fanatic and know you want to go back every year maybe it makes more sense for you, otherwise I think it's probably never worth it.

solon

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Re: Do timeshares ever make sense?
« Reply #17 on: June 08, 2016, 12:43:13 PM »
i've researched this b/c my gparents are giving theirs to a family member and i thought i may be inerested

some reasons people may use them
1. people who have trouble making time for vacation but since they've put the money towards it will use it (basically forces them to take vacations) - NON mustachian reason
2. If you can get it for free or very cheap on the second hand market and use it to its full potential with the last minute bookings and loop holes that come with a flexible schedule basically if you're FIREd - MAY be worth it.
3. if you pay retail they will never be worth the cost - your friends week may have cost them 1000 dollars in dues but that doesnt take into account the 30-50k the likely paid for it.

so lets just stop and think about that 50k for a second.  you invest that 50k and it makes you 3500 at 7% annually.  thats a lot of vacation right there.  Lets go one step further and see you're a mustachian so you dont pay retail prices for vacation you travel hack with credit cards - i went to Maui this march for 10 days with my wife in first class with a jeep rental car and stayed at 5 star resorts (see Grand Wailea)  and my out of pocket cost for that was 0 dollars.  so now you still have 3500 in the bank and you can take another trip.  my wife and i planned a cruise to Europe in December. 11 days includes drinks - balcony cabin.  total out of pocket cost expected to be 500-1k for the whole trip including flights and shore excursions.  so we'll still have 2500 in the bank to compound with for the next year plus any extra gains.  plus we havent even factored in the maint. fees they are paying which is likely another 1500-2k

but as for item 2 when you're FIREd you can do what the retired couple we met on our honey moon in Kauai does every winter.
1. buy a truck with a shell on the back in the states load it with camping gear clothes/beach stuff/bikes - ship it to the islands.
2. camp out on the beach using the truck as your bed if weather is bad while searching CL for a reasonably priced monthly condo
3. rent a condo for 450 a month on the beach and bike everywhere.
4. sell truck in hawaii when you leave for more than the cost plus shipping b/c people pay a premium for vehicles over there

all inall we arent even going to be taking my Gparents FREE time share b/c we dont see the value in it.

A condo on a beach in Hawaii for $450/mo? If you have a link, I'd love to explore it.

Le Poisson

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Re: Do timeshares ever make sense?
« Reply #18 on: June 08, 2016, 01:21:13 PM »
Timeshares make great sense - just ask the companies selling them! They are very efficient at moving money from the pockets of the consumer to the pockets of the corp; which is precisely the intended function.

boarder42

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Re: Do timeshares ever make sense?
« Reply #19 on: June 08, 2016, 01:39:34 PM »
i've researched this b/c my gparents are giving theirs to a family member and i thought i may be inerested

some reasons people may use them
1. people who have trouble making time for vacation but since they've put the money towards it will use it (basically forces them to take vacations) - NON mustachian reason
2. If you can get it for free or very cheap on the second hand market and use it to its full potential with the last minute bookings and loop holes that come with a flexible schedule basically if you're FIREd - MAY be worth it.
3. if you pay retail they will never be worth the cost - your friends week may have cost them 1000 dollars in dues but that doesnt take into account the 30-50k the likely paid for it.

so lets just stop and think about that 50k for a second.  you invest that 50k and it makes you 3500 at 7% annually.  thats a lot of vacation right there.  Lets go one step further and see you're a mustachian so you dont pay retail prices for vacation you travel hack with credit cards - i went to Maui this march for 10 days with my wife in first class with a jeep rental car and stayed at 5 star resorts (see Grand Wailea)  and my out of pocket cost for that was 0 dollars.  so now you still have 3500 in the bank and you can take another trip.  my wife and i planned a cruise to Europe in December. 11 days includes drinks - balcony cabin.  total out of pocket cost expected to be 500-1k for the whole trip including flights and shore excursions.  so we'll still have 2500 in the bank to compound with for the next year plus any extra gains.  plus we havent even factored in the maint. fees they are paying which is likely another 1500-2k

but as for item 2 when you're FIREd you can do what the retired couple we met on our honey moon in Kauai does every winter.
1. buy a truck with a shell on the back in the states load it with camping gear clothes/beach stuff/bikes - ship it to the islands.
2. camp out on the beach using the truck as your bed if weather is bad while searching CL for a reasonably priced monthly condo
3. rent a condo for 450 a month on the beach and bike everywhere.
4. sell truck in hawaii when you leave for more than the cost plus shipping b/c people pay a premium for vehicles over there

all inall we arent even going to be taking my Gparents FREE time share b/c we dont see the value in it.

A condo on a beach in Hawaii for $450/mo? If you have a link, I'd love to explore it.

see number 2 above where they look on CL til they find it. and just keep shopping til they find something.  they said it was a studio. could have easily been a studio in someone's house ... it was in the tunnels beach area.  it was 3 years ago when we were there.

frugaliknowit

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Re: Do timeshares ever make sense?
« Reply #20 on: June 08, 2016, 02:03:06 PM »
Timeshares:  Fagetaboudit!!  All smoke and mirrors (you getting ripped off in the smoke). 

Invest your money.  Rent your vacation spot as needed.

Frugal D

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Re: Do timeshares ever make sense?
« Reply #21 on: June 08, 2016, 02:09:44 PM »
Timeshares make me just about as mad as MLMs on Facebook.

If you have to ask if it's a good deal, you can't do math. The typical points system today forces you to prepay your vacations for the next 100 years and cost, on average, $100k. Again, if you can't do the math on the opportunity cost there, well...

The industry itself is absolutely sickening. Just sit through one of their pitches and you'll want to take a shower when it finally ends (3-4 hours later). It's the most high pressure sales situation I've ever been in. And they prey on elderly people, positioning it as an asset that they can pass down to their children and grandchildren. I have never seen an asset that comes with an annual cost that grows in perpetuity.

Luckily, timeshares are going the way of the dinosaur. Like everything else, the internet is flattening the vacation industry. The Expedias of the world fired the first shot and now Airbnb is delivering the final blow. Timeshare company revenues are getting crushed because of the transparency and price discovery that the internet provides. My generation and future ones will never fall for it and I suspect all timeshares will be gone in about 50 years.