I’ve looked at Timeshare resales over the years, but have never bought because the maintenance fees seemed to be nearly as much as paying for a hotel. Now I came across a couple of articles that make me glad I’ve avoided owning a timeshare. The first article discusses resales, Timeshare resellers rarely deliver on promises, usually escape punishment, Times analysis shows. If you have a timeshare you are trying to sell, read this article and beware! Don’t agree to any fees until after a successful sale. If they want upfront fees, quit talking and hangup the phone. If they state they have a buyer lined up, then they won’t mind a contract that pays them after the sale. Don’t give them ANY money upfront for advertising. Their advertising fees may be more than the timeshare will sell for. If they are not legitimate they will be high pressure, and say anything to sell you on paying a fee upfront; hang up on them!
How much is your timeshare worth? According to the CNN Money Help Desk blog article How do I ditch a timeshare?, the IRS values your timeshare at $0.00. Since most timeshare buyers feel they own something of value this is hard to comprehend. This is something they planned to “leave to their children” when they bought it. They are “owners”, and if they are the original owner they paid a great deal of money for the week or two of partial ownership. Most feel that the timeshare would have to be worth at least half what they paid for it, so when faced with legitimate sales for much less they feel it is not legitimate. When a person tells them they can sell it for much more than it is really worth, they don’t assume a scam because they believe the timeshare has that value or more. The difference between reality and perception is what makes timeshare sale/advertising scams possible.
Want to know what your timeshare is probably not quite worth… look at the current listings on what looks like a legitimate timeshare broker site, Timeshare Broker Services. Why do I say what your timeshare is probably not worth? Because these timeshares are still listed. If you are serious about seeing what it is worth, sign up with this site to get a listing of market values based on units that sold. I don’t have a timeshare, and so I did not try out their service. So I am not recommending this site. There are lots of listings here, and testimonials. But I give all that the same value as most things I see on a site I know nothing about on the internet. Not much. So if you fill out the form to list your timeshare and get a call with a high pressure sales pitch, hang up, let me know and I’ll remove them from my posting. The site looks legitimate though.
So why do timeshares exist? Let’s do a little math on an example property. The Marriott Ko Olina Beach Club in Oahu has 949 Suites. Each suite has 52 weeks of ownership. That is 49,348 owners. I don’t know how much each of these owners paid or if Marriott has sold all the possible room/week combinations, but let’s assume full sales and go with a modest $30,000 for one week in a floating 2 bedroom lockout room. That means that Marriott sold this property for $1,480,440,000 or nearly 1.5 billion dollars. On top of that they are collecting more than $1400 in maintenance fees from the owners each year. That’s an annual combined maintenance fee collection of over 69 million dollars. Some how I don’t think the fees all go to maintenance, staff, and property improvements. Do the owners have a say in what the fees will be? What we really have here is a hotel except the construction is capitalized by the guests, who sign a contract requiring that they pay to stay, guaranteeing full occupancy. This is why timeshares exist! To make boat loads of money for the people who build, sell, and maintain them.
Are timeshares an investment in yourself? This is a normal sales pitch. Give yourself a reason to take a nice vacation. Buy into the dream! But is it really necessary for you to give 10s of thousands of dollars to a company, and lock yourself into mandatory fees for life in order to have a nice vacation? No way! Timeshares are a bigger boon to non-owners. I’ve stayed at timeshares at bargain prices because they existed and had space available to sell at bargain prices. Do people who have timeshares really take more vacations? Sometimes, this is true because they are locked in to paying the money, can’t get out of it, and would feel even more ripped off if they don’t use it. Not exactly the way I want to “invest in myself”. The truth is you don’t need to pay up front to “buy” a timeshare in order to have vacations. You just have to take vacations! Plan them, find good deals, use travel sites to get ratings for the places you plan to stay at, and enjoy yourself without having to pay thousands up front. We had a terrific time last year in Kauai and paid less than the maintenance fees on a timeshare for lodging and a rental car.
So, why all the negative talk? You’ve probably also heard good things about timeshare ownership… Most timeshare owners have no choice but to try to make the best of their decision. So they focus on the good parts of it. Vacation is fun. There are good things to talk about. However, if you know a friend, a really good friend, discuss timeshares with them and ask one simple question, “If you could go back and whisper in your own ear right before the timeshare sales person’s close, what would you say?”. If they don’t admit that they would say, “DON’T DO IT!”, they are fooling themselves, they just haven’t owned it long enough to really know what they are in for, or I’ll except the possibility that they are happy with their timeshare (don’t assume you would be).
Note 1: The pictures throughout the post are from my Kauai Vacation in May 2011 (See my 3 posts on this vacation – Kauai! (2011) (Part 1 – Barking Sands, Waimea Canyon, and Waterfalls), Kauai! (2011) (Part 2 – Poipu, Na Pali Coast Catamaran, Ke’e Beach ), and post on planning the vacation Tropical Islands. We stayed in some great places, didn’t spend tons of money, and this year we have the freedom to go anywhere we want or to go nowhere if that is what we want to do.
Note 2: I don’t have a timeshare so I can’t approve comments that include links to sites that appear to be legitimate, but that I can’t check out. Sorry if your site really is legitimate, good for you and I’m sure there are other ways to get business. If you have a timeshare and it’s not working, or you want more info on timeshares, or you are thinking about buying a timeshare on the resale market, then check out this site: TUG – The Timeshare Users Group. Everything I see from legitimate sources state that it is legitimate. It is free for some things, has a low annual fee ($15) to access other things and to list your timeshare for sale/exchange/rent. It has a very large listing of resales, rentals, and exchanges, and claims to have 65,000 users so there are tons of people who know a lot more about timeshares then I do because they own them.
Note 3: If you are considering buying a timeshare directly from a timeshare company (I won’t call it new… you’ll be staying in the same unit as the person who bought through the resale market)… don’t do it! If you just have to have a timeshare… can’t stop yourself, then see Note 2 and consider a resale (or even safer a rental).