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Timeshares – Gasp!

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  • Avatar MaxPower 
    Participant
    Status: Physician
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    Joined: 02/22/2016

    I have looked into these a little bit in the past, also on the secondary market. The resource I have used is TUG (Timeshare Users Group). My parents have a few weeks through a Marriott timeshare in Park City and at another nice resort in Southern California.

    The key is to buy them at nice places that you would want to go to every single year if you were unable to trade them. My parents have been able to trade theirs, due to them being in desirable locations, for stays in nice Marriott resorts on Hilton Head Island and for points to stay at some nice Marriott hotels in Sydney and Cairns Australia, amongst other places. My wife and I also were able to use one of their weeks to stay at a great place called Frenchman’s Reef on St Thomas. If you buy them in a terrible, low demand location just to get a good price, don’t plan on being able to trade them ever, because for some trades you have to have an offer on yours to be able to trade into somewhere else.

    I don’t know the specifics of their maintenance fees, nor of the original purchase prices, but they have had the weeks for almost 25 years now and I know they have gotten good use out of theirs. The biggest key is to buy into a great resort in an awesome location in one of the two big players. If you do, you should be able to sell it. The places. that people can’t sell are marginal (or worse) condos in average locations.

    From what I recall the two major players are Interval International and RCI. I think Interval has or at least had the nicer selection of upscale resorts, but that may have changed. I know my parents have been a little unhappy with some of the changes that have occurred to things like resort choice over the years. So don’t plan on everything being the same years into the future.

    The last piece of advice I would give you is to do some research on them and have an idea of timeshares you are interested in, then wait for another recession to hit and buy them then when prices are low. I remember looking at some listings on TUG back in 2008/09 and being shocked at how low some of the prices were for places like Marriott Grande Ocean or Barony Beach on Hilton Head. Unfortunately I was just a resident then and had no money. Then when I got out of fellowship and had some money in 2014/15, the prices were all high again. So wait for the next recession and get a bargain then, if you really want to do it.

    #228567 Reply
    MPMD MPMD 
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    Status: Physician
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    Joined: 05/01/2017

     I think the goal is to get out, not get a return on the “investment.”

    Click to expand…

    I agree. Out of curiosity, what if you just stop paying the yearly fees? I figure the company will try to convince you to pay, but if you turn down all attempt, wouldn’t this ultimately lead to them “repossessing” the asset? What are the downsides other than a credit ding on your record? Essentially jingle mail except on a timeshare instead of a house.

    Click to expand…

    I would be pretty nervous about doing this. First of all this would likely annihilate your credit which is a big deal unless you are truly at FIRE and also not planning on having any other mortgages. I don’t have consumer debt but I can’t pay cash for a house so I still need a credit score — just using the example I don’t own a time share.

    These are basically HOA fees and people on this forum clearly would generally have the money to pay them. If you aren’t planning for/heading towards bankruptcy then you’d just stack penalty on top of late fee etc. If you were sued for this you’d end up having to pay everything you owed and then some. I don’t even know if this kind of thing is bankruptable — late fees to a property you own? If you have the means to pay something in general it seems like a terrible idea not to. You get sued and go before a judge, she sees your $1.6M in retirement and your $240k MD income and says, “um, sorry, you are in my court why? B/c you don’t like your island hotel?”

    #228569 Reply
    Liked by Craigy
    Avatar StarTrekDoc 
    Participant
    Status: Physician
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    Joined: 01/15/2017

    Hello,

    I am new to WCI and so am responding late as pertaining to this thread. My wife and I bought a timeshare at Big Cedar in 2004 as our youngest daughter was attending camp nearby each summer and planned to become a counselor there when she was older. We paid in excess of $28,000 for 2 weeks “Silver” membership. Well, we attended regularly for about 5 years, then life came rushing in. We haven’t been there in 10 years due to caring for our sets of parents, some rebellion of her older sibs, health issues for me, increasing practice responsibilities, weddings, etc, etc. Fee increased every year or two.

    Finally we decided to try to sell, though were discouraged by the low rate of success. We are now listed with a low-cost service but have had no offers after 8 months. We priced it low. I wonder if it can even be given away, much less sold.

    Any suggestions from those with experience in this?

    Appreciatively

    Dr. K

    Click to expand…

    Welcome Derm Guy!   My parents did same as you.  Got a timeshare in Hawaii on secondary market for $12k and used for a few years, then started slipping back and using the trade outs for weeks with RCI for other places, but never really got good returns and ended up as forced vacations in places not always their preferred locations/times despite having a Hawaii Red week.   Ended up selling for $1k via Redweek market IIRC.   If you have a small timeshare property; it can be about letting it go for cost of transfer.

    This is probably less an issue these days with AirBnB to take up timeshare times directly; but still PITA imho.

    We’ve kicked around timeshares since we’re Disney lovers, but still never could get ourselves to pay the amounts since we’re in our hearts travel hackers and stomaching the disney costs is still a bridge too far for the moment.  maybe if Anaheim ever gets their head out of their a$$ and lets disney build another timeshare, we’ll get on that one — California Lodge is way too expensive right now.

    #228577 Reply
    Avatar bobedwards 
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    I had a family reunion in the Gulf of California recently (Puerto Punesco, Mexico just south of Arizona). My sister in law booked it through her handed down timeshare from her in-laws (I did not debate the point(.  I happen to sit through the pitch at the facility we stayed at and it was very aggressive. They gave $1400 worth of vouchers for the facility, but the advertised 60 minute pitch was over 3.5 hours. My wife and cousin nearly walked out several times, but I was sure it was not my deal from the beginning and just listened to the pitch all the way through. The selling point for us was basic: “you spend X on vacations per year, why not own a place and have the luxury of swapping other high end places”. The tactics are aggressive- they want you to anchor to a price, just like when you buy a car. Once you name the number of days you vacation and price, they pitch you on why it makes “sense” to own rather than rent a place. Own vs rent and all the similar arguments. Similar to owning a house vs renting. But they have no good answer for the contract in perpetuity other than “you can swap it out to other people or sell to other people”. The secondary market for timeshares is terrible. I could not imagine a contact that locks someone in for $1400-2200 per year in “fees” and then limits the dates when the facility is available.  Choose AirBNB, VRBO or hotel. Pay the price for dates you want, with no further obligation. Live your life. Stay away from a permanent contract. Done.

    #228578 Reply
    Liked by childay, MPMD
    Avatar ZZZ 
    Participant
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    Timeshares are a great deal — for huckster developers and sleazy salespeople.

    It’s trivially easy to rent these days. Why bother?

    #228581 Reply
    Lordosis Lordosis 
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    Joined: 02/11/2019

    I know some people who sell these for a living. They cannot understand why people buy them. Huge upfront cost. Yearly maintenance fee that can ride unexpectedly. Yearly taxes.
    Disregarding the initial cost the yearly fees and taxes almost are enough to purchase a similar vacation.

    The only reason people say they like their timeshares are to trick themselves into thinking they made a good purchase.

    “Never let your sense of morals prevent you from doing what is right.”

    #228597 Reply
    Avatar jacoavlu 
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    We own a Disney (DVC) timeshare bought on the secondary market for about half retail and I’d do it again no doubt. Enough points to go a week a year and occasionally two. Large family and we stay in a nice 2bed 3bath walking distance to Magic Kingdom and enough space to take friends or family along. Compared to what it would cost to rent a suite or two rooms on property I think it’s been worth it and we use it consistently so I think it’s been a good value for us. Would not be such a value compared to renting similar space off property but then it wouldn’t be the same vacation. Disney is definitely not for everyone but our family continues to enjoy it after geez what must be about 10 weeks there. One of these years we’ll go to the Hawaii property. Or skip a year and bank the points then splurge on a 3br two level condo over Christmas and take several friends.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #228603 Reply
    Liked by SPlum, StarTrekDoc
    Vagabond MD Vagabond MD 
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    Joined: 01/21/2016

    We own a Disney (DVC) timeshare bought on the secondary market for about half retail and I’d do it again no doubt. Enough points to go a week a year and occasionally two. Large family and we stay in a nice 2bed 3bath walking distance to Magic Kingdom and enough space to take friends or family along. Compared to what it would cost to rent a suite or two rooms on property I think it’s been worth it and we use it consistently so I think it’s been a good value for us. Would not be such a value compared to renting similar space off property but then it wouldn’t be the same vacation. Disney is definitely not for everyone but our family continues to enjoy it after geez what must be about 10 weeks there. One of these years we’ll go to the Hawaii property. Or skip a year and bank the points then splurge on a 3br two level condo over Christmas and take several friends.

    Click to expand…

    We owned DVC points for about 12 years, visiting both the Disney Hilton Head property and various Disney Orlando theme park properties (primarily the Beach Club, walking distance to Epcot). We enjoyed large 2 or 3 BR accommodations and always invited friends or family along. Twice, we used the points to stay in a boutique hotel in downtown Chicago. I even gave points to my radiology partners on two occasions for their personal use.

    After a while, we tired of going to Hilton Head and Disney World, and we sold the points for about 80 cents on the dollar, IIRC. (The Beach Club points, my smaller position, were in high demand and actually appreciated in value.) We enjoyed numerous vacations when the family was young, made some great memories, sold it and moved on.

    I have not tortured the numbers to analyze all of the associated costs, compared to the cost of all of us piling it to a Motel 6 or sleeping in a car in the Disney parking lot, etc., but best I can tell, we had fun, and it did not substantially impede our path to wealth. (Admittedly, we would be in modestly better financial condition if we had instead parked the money in an index fund and spent our vacations at home watching CNBC and staring at our Fidelity statement.)

    "Wealth is the slave of the wise man and the master of the fool.” -Seneca the Younger

    #228618 Reply
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
    Posts: 4389
    Joined: 05/13/2011

     I think the goal is to get out, not get a return on the “investment.”

    Click to expand…

    I agree. Out of curiosity, what if you just stop paying the yearly fees? I figure the company will try to convince you to pay, but if you turn down all attempt, wouldn’t this ultimately lead to them “repossessing” the asset? What are the downsides other than a credit ding on your record? Essentially jingle mail except on a timeshare instead of a house.

    Click to expand…

    I suspect they just keep adding fees and ruining your credit. Maybe take you to court eventually. Jingle mail worked because they were no recourse loans in some states.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #228666 Reply
    Liked by Craigy
    The White Coat Investor The White Coat Investor 
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    Joined: 05/13/2011

    I wouldn’t buy a timeshare someplace until I had gone there 2 or 3 years in a row during the same week and was convinced I would continue to do so for a decade or more. And who does that?

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #228667 Reply
    Lordosis Lordosis 
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    Status: Physician
    Posts: 1209
    Joined: 02/11/2019

     I think the goal is to get out, not get a return on the “investment.”

    Click to expand…

    I agree. Out of curiosity, what if you just stop paying the yearly fees? I figure the company will try to convince you to pay, but if you turn down all attempt, wouldn’t this ultimately lead to them “repossessing” the asset? What are the downsides other than a credit ding on your record? Essentially jingle mail except on a timeshare instead of a house.

    Click to expand…

    I suspect they just keep adding fees and ruining your credit. Maybe take you to court eventually. Jingle mail worked because they were no recourse loans in some states.

    Click to expand…

    They of course try to get it out of you but usually it is not worth the time and they just take the unit back and resell it.

    “Never let your sense of morals prevent you from doing what is right.”

    #228673 Reply
    Avatar Tim 
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    Status: Accountant
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    Joined: 09/18/2018

    Admittedly, we were in modestly better financial condition since we had instead parked the money in an index fund and spent our vacations at the Beach Club at Disney World or Dolphin or Contemporary or a Villa.
    Kids grew tired of travel though. “Disney World again?”

    #228678 Reply
    Liked by Lordosis
    Avatar burritos 
    Participant
    Status: Physician
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    Joined: 04/23/2018

    If one is smart enough to use credit card rewards, shouldn’t one be smart enough to use timeshare rewards?

    #228698 Reply
    FIREchief FIREchief 
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    Status: Other Professional
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    Joined: 12/10/2017

    I tell myself that part of his skill was spotting suckers and I am many unfavorable things but not that. I’m sure they have a PPT slide at their conferences that reviews people who just aren’t going to buy no matter what you do.

    Click to expand…

    ^^^ this.  I’ve only been to one timeshare pitch in my life.  DW and I were killing a week in Vegas (easy drive/flight from home) and while checking in we were approached with the old “how would you like some free show tickets??”  We clearly knew what it was.  I was in Vegas to be entertained, and this was easily among the entertainment highlights of that particular trip.  I was hungry from the flight and looking for fun.  They offered free show tickets plus $50 “match play” (i.e. phony money) in the casino.  Let the games begin….

    Short bus ride to the timeshare facility on the South end of the strip.  Nice free lunch (sandwiches and sides).  Looking around the room, I noted that we were likely among the prime targets.  Not so young that we didn’t have money or credit.  Not so old that we had spent all our money.  Maybe professionals with money and stress levels that made us prime bait (true except half the stress and twice the smarts than they slotted us at).

    Then you meet your partner salesman.  I’m 100% confident that, based upon the room, they assigned us their alpha guy.  His father had been a boxer in Vegas in the fifties and our guy had finished a career in the casinos, working his way up to pit boss and likely beyond.  Really nice guy.  Really impressive guy.  Scary guy??  I don’t think so, but I certainly don’t know that world.  He sat with us as we finished our lunch and listened to the introductory, emotional presentation (friends, family, apple pie, America, vacations, vacations….).  He asked me a few questions about what I did and watched us react to the presentation.  In less than an hour, he read us like a book.  Went through the obligatory motions a bit, but clearly understood that we were there only for free stuff, and weren’t going to be pulling our wallets out for anything.

    We spent a few more hours walking through the sales steps (each one was either twice the crap or half the price).  Our guy carried a brief case, but all he pulled out of it (later while we were all just killing time) was an ancient SI showing his father as a boxer.  We actually enjoyed our time with him, and he “let me off the hook” by indirectly acknowledging the game and our total disinterest in playing it.  He told me something like “don’t worry FIREchief, you’re just about done here.”  LOL  I won’t say we felt bad for “wasting his time,” but I really did like the guy.  Like I said, some of the best entertainment memories of that trip!

    Epitath: the free tickets were to that small French review that was at MGM at the time (fun show, now long gone).  I used the $50 match play on video blackjack and actually walked away with $53 real cash!

    Lesson not learned:  timeshares are awful (not learned because we already knew this)

    Lesson learned:  timeshare presentations can be even more fun than just the free stuff they give you

    I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

    #229158 Reply
    Liked by childay, Peds
    childay childay 
    Participant
    Status: Physician
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    Joined: 01/09/2016
    Lesson learned:  timeshare presentations can be even more fun than just the free stuff they give you

    Click to expand…

    I’ll 100% pass but interesting anecdote!

    #229441 Reply
    Liked by FIREchief, Tim

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