Buying A Timeshare
Published by Sean M. Lightfoot on Tagged ReviewsA few weeks ago at a social gathering, a small group including myself began discussing vacations. Everyone seemed to love traveling and had their favorite vacation destinations, so we all shared them and included a few special moments. After everyone shared their memories, we began to discuss the costs of our priceless vacation memories. I couldn’t believe the prices they were paying to go somewhere and stay in a hotel! One couple said that they bargain shopped and found a decent hotel in Hawaii for $95 a night.
That was still outrageous to me. When my turn came to speak, I told them that I pay between $0-$300 for a weeks stay at a top-rated resort with a full kitchen, 1,2 or 3 bedrooms (depending on who the wife and I decide to take with us), living and dining areas, a pool and activities on the premises. They couldn’t believe their ears. Here I am, thinking that everyone either owned a timeshare or knew someone who did.
For those of you that are not familiar with vacation timeshares, I’ll explain it to you. First there are Fixed Weeks or Deeded Weeks. If you have a vacation spot that you like to visit each year then you can purchase partial ownership at a resort in the area and that week will be available to you each and every year that you own the timeshare. The resorts usually offer financing to the owners, which can be at a higher interest rate than an outside source. And then there are the monthly maintenance fees, which range between $350 to $500 a year. Each resort is different in maintenance fees, but they all will deny visitation to the property if the fees aren’t current. You receive the deed for the timeshare just as if it was a piece of real estate and you own it for life and it can be will to your children or a beneficiary. The prices for ownership depends on what time of the year your week falls on and the location of the resort. For most resorts and exchange companies (I’ll get to that in just a sec) the seasons are as follows:
Red time = greater demand White time = average demand Blue time = lessor demand
The better the season that your week is in, the more value and trading power it has.
Vacation Exchange Companies are individual networks of thousands of resorts throughout the world. When you sign up with an Exchange Network, you can exchange (or trade) your deeded week for a week of the same value or less at any of the other resorts that belong to that network. There are over 6,000 resort worldwide so you’ll have a nice list to choose from. Listed below are some of the larger Exchange companies.
San Francisco Exchange Company (SFX)
Travel To Go, Exchanges and Rentals
TIMELINX - Timeshare Database: Exchange, Resale & Rental
Vacationearth Exchange Company
Internet Exchange Services, LLC
I’ve told you about Deeded Weeks, now I’ll explain the other option for vacation resort ownership. Points (or Clubs program). Points are the new and sometimes more favorable type of ownership to have. The points give you more options as far as what you can use them towards and when you can use them. Most resorts offering points not only let you use the points towards vacation destinations, you can also use them towards airfare, car rentals and to upgrade your unit size. This type of ownership is called Floating Weeks, meaning you can use it any time of the year. The size of the unit that you want to stay in, the resort location and the time of year that you want to visit all determines how many points it will cost you for that stay. Any remaining points usually can be saved for the next trip. All resorts have different rules as far as carrying points over to the next year. I have ownership with a Deed Week resort and a Points resort. Personally, I prefer the Points ownership. The benefits of both resorts can be used in conjunction with the other to make your vacation a truly memorable one.
Each company has their own fees, rules and ways doing business. The only exchange company that I have used is RCI. They have a yearly membership that’s a little less than $100 and they charge $150 to $200 to exchange a week. Most of the exchange companies offer bonus vacations that you can purchase at a discounted rate instead of using your week. I’ve been told that Timex is pretty good to use due to them not having membership or exchange fees. The exchanges done on Timex are handled one-on-one between the week owners.
Owning a timeshare at a reputable resort can be very rewarding. When you purchase, do not let your salesperson try to convince you that your timeshare will be an investment. The value of timeshares depreciate drastically right after purchase. So, keep in mind that the equity that you’ll gain from owning a timeshare will be in the form of the wonderful memories created from having a nicer and also less expensive vacation.
“In all my years of working in this industry, I’ve never heard anybody say they were not satisfied with the product — new or used,” says Howard Nusbaum, president and chief executive officer of American Resort Development Association, or ARDA, the trade organization for the time share industry. “There’s about a 90 percent satisfaction rate from the people who own the product.”
Over six million families own timeshare worldwide - the majority are well satisfied with their ownership.
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