Is There Such A Thing As A Good Timeshare?

 A reader writes in:

Hi Lisa,

Came across your blog and wondering if you might be able to provide some input?

My in-laws have a timeshare at the Maui Banyan in Kihei Hawaii that they purchased in 2004, paid off in 2014, they bought it for $20K, but with interest over the term, looks like $40k overall.

The maintenance fees about $900 or so, taxes about $200 per month, so figure on $1200/year, = $100/month. For 2 weeks, bankable (i think) and usable at other destinations.

What's the pros and cons of this type of timeshare? Why buy? Why not?

My response:

It’s a complicated question that I can’t answer comprehensively without knowing much more. 

I’ll say this much, the vast majority of timeshares that the developer is attempting to sell, including what your in-laws purchased, is available on the legitimate secondary market, albeit with some usage restrictions, for a small fraction of what the developer is selling it for. Add to that insult the fact that with rare exceptions, the resorts make inventory open to renters who can then get the benefits without the large buy in price and in some cases less than the annual fees. 

So from a purely financial standpoint, buying from the developer doesn’t seem all that wise. 

In my opinion, the industry has a long way to go before the value proposition of owning is back to what it used to be 20 or 25 years ago. 

And while I used to be a big proponent of timeshare points due to their flexibility, I no longer am. For the most part, they are unwieldy, I’m not 100% certain resorts are not overselling inventory and then there’s the fact that while a week in 2020 was a week in 1990 and will be a week in 2040; most point based timeshares offer no inflation protection leading to constant attempts to up sell the owner. 

Sure, the resorts are almost always nicer than a hotel. But as I pointed out, you don’t have to be an owner to stay at the resorts. 

So, while I’m still pro the concept of timeshare, I feel that in order to stay viable, the industry is going to have to do some serious retooling. 

Thoughts?