Monday, April 11, 2011

The Real Truths About Timeshare

A recent piece floating around the internet lately entitled "The Top Five Reasons Why Timeshares Are A Bad Investment" has me hopping mad. I am SO sick and tired of listening to the same old stuff about how timeshares, whether tied to real estate or not, are poor investments.

If you buy a timeshare, any timeshare, as a real estate investment, shame on you for not understanding what you are buying. And if you sell timeshare, any timeshare, as a real estate investment, you should be fined and prohibited from selling it in the future.

I won't divulge the author of the article in question; he has done enough disservice as it is. However, I will rebut his points one by one.

If someone came up to you 10 years ago and offered you a deal whereby for $5,000 you could receive all the gasoline for all the cars you would ever drive, would you consider this a good deal? The answer for most of us would be a resounding "YES." Back when I started driving (in the Dark Ages), gas was $.74 a gallon. Today, I filled up for $3.76 a gallon.

Timeshare operates on the same premise. You are in fact pre-paying for tomorrow's use at today's prices. If, 10 years ago you were offered an opportunity to pay $5,000 for one week's quality vacation every year, forever, wouldn't you have taken it? If vacations were important to you, then you would have been foolish not to take this offer.


  1. But you don't get that week forever for no extra money. What you get is the week as long as you pay your maintenance each and every year. That could be $1000 or even more each year.

    Did you check the website of the resort? A friend bought a $7500 biannual two weeks in Maui, and his maintenance is nearly $1000. Most times you can rent the very same unit for that same $1000 without buying anything at all.

    Now sure, in 20 years it won't be $1000 to rent, but the maintenance won't be $1000 either.

    Remember the news, all the trouble people had getting their weeks from RCI? Remember why? RCI was renting the heck out of them. Why give them to you when they can get hard cash. Fortunately they got caught. But it wouldn't be great paying your maintenance for a week you couldn't ever get. And there are *always* extra weeks around.

    This is why timeshare is sold with high pressure sales techniques. The proposition mostly won't stand up in the light of day.

    I wish that would get fixed, but I'm not holding my breath.

  2. No doubt there are issues, one of them of course being the seemingly ever-increasing fees.

    There are NO easy answers and I suspect that in five years, timeshare will bear only a slight resemblance to what it is today.

    It is a flawed system---that's what this continued dialoge is for, to change for the better.