The word timeshare can clear a room faster than yelling fire. Timeshare has justifiably earned a bad reputation over the last few years. High pressure sales pitches that lead to spur of the moment decisions, followed by 15 years of monthly payments and annual maintenance fees, create a nightmare scenario for any family. What if, however, instead of costing $20,000 to $30,000, a timeshare sold for just a fraction of that? Would a substantially lower price change the equation?
How Timeshare Can Be A Good Deal
A married couple I know from my college days are now in full time ministry and shared with me their foray into the world of timeshare resales. Their story really opened my eyes up to what appears to be quite an amazing opportunity (when the price is right). They purchased two weeks of timeshare through a resale website for just a couple of thousand dollars each. They have exchanged their weeks all throughout the United States (and even Europe) and have nothing but good things to say about their experience.
As a result, I have been quietly looking into timeshare resales over the last couple of years, and my wife and I have decided that we are probably going to buy one in the coming months. A new website has emerged making both buying and selling timeshares easier than ever. Vacatia.com launched in the fall of 2013 and provides an easy to use portal with some great safeguards for buyers and sellers. One feature for sellers that is very attractive is the ability to list your timeshare for sale with no upfront fee. You only pay Vacatia a percentage after your unit is sold. An article I published in 2011 highlighted the growing problem of Timeshare resale scams that require upfront fees from sellers.
What About Those Maintenance Fees?
Any timeshare that you buy will bring with it annual taxes and maintenance fees (which can be a few hundred dollars to even more than $1,000). Some would argue that the maintenance fees alone make timeshare a bad deal. This 'throw the baby out with the bath water approach' may make for a good line on a call in radio show, but can it be supported by the facts? Many that offer this argument will do so comparing one week at a local hotel vs. the cost of the annual maintenance fee. In my view, this does not really represent a true 'apples vs. apples' comparison. A typical timeshare unit is much more than a hotel room. Most timeshare units are multi-bedroom with full kitchens, and are situated in resort complexes that represent a pure five star experience. Check out the Vacatia.com listing below for just $1.
Some accommodations are so roomy that a single unit can be shared by two families. Of course, there are other features of timeshare to also be considered. This would include the ability to trade your week for a week at another resort or even rent out your week if you are unable to use it. In most cases, you can sell your timeshare or even pass it along to your family in your Will (deeded ownership). My friends have become gurus on using the exchange network and have fully exploited the trading feature on numerous occasions.
Another weakness in the hotel vs. timeshare cost comparison neglects to factor in the rising cost of hotels. While I have no statistics to back this up, I would assume that the annual increase in hotel rates are at a steeper incline than that of the annual increase in ownership fees at timeshare resorts (I know for a fact that this has been the case in the Orlando/Disney resort area). This may support the notion that over time the timeshare unit may represent an ever increasing value compared to area hotels.
The Vacatia rep I spoke with explained that in most transactions the buyer is required to pay the closing costs (these are one time costs). With all that includes, including the option of title insurance, and the resort transfer fees, you may be hit with $500 to $1,000 (maybe even slighly more than this) in buyer costs. These costs are fully disclosed and you can factor these into the overall price you are willing to pay.
If you have never vacationed at a timeshare resort, consider renting a unit to experience the difference from a hotel. An article I wrote about vacation rentals highlighted a great website that can be used to rent timeshare units by the night (or the week). While I certainly don't believe that all timeshare resales are good values, some certainly appear to be. When the price gets down to under $3,000 with reasonable maintenance fees, even this cynical financial writer will take a second look.
If you have your own timeshare resale experience to share, please use the comments section below and we can start a conversation.
Helping you make the most of God’s money!