John & Janis…, Real Estate Pro in Encinitas, CA

Would you invest in timeshares today? Are they still a good investment?

Asked by John & Janis Arendsen, Encinitas, CA Wed May 16, 2012

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16
I own more than one timeshare. I do not look at them as investments but as pre-paid vacation locations. Timeshares are to be used and enjoyed and not thought of as investments.
1 vote Thank Flag Link Fri May 18, 2012
Hector, you are also spot on. If you buy into a deeded timeshare property you are buying into RE in it's purist form and are responsible for taxes and maintenance fees just as you would be should you purchase a town home, condo or any other real property.
1 vote Thank Flag Link Thu May 17, 2012
...and if you decide to default on your timeshare loan, it is considered a Mortgage and it counts as a foreclosure in your credit. Read the fine print, and they are not timeshares, the name is vacation ownership package =)

Hope this helps

Hector R. Gastelum
Realty Executives Dillon
REALTOR #01382940
2240 Otay Lakes Rd. #306
Chula Vista, Ca 91915
hectorgastelum@yahoo.com
619-954-2225
125*142*10754
efax 619-270-2516
1 vote Thank Flag Link Wed May 16, 2012
Just a few more thoughts to share..

Unless one is sure they will want to travel to the actual place they are "buying" at the exact same week each year, they need to proceed with caution.

I have friends who bought the last 2 weeks of the year (over the Christmas holidays) in Aruba many years ago.............they "bought" several 2 BR units and they make that their family vacation - grown children, grandchildren and all.Not sure what they paid, but the numbers might work out in their favor.......I don't know......but they have no plans to sell in the future.

I do know resales are really difficult to get rid of these days.

Another friend didn't listen to me when I told her to read the fine print very carefully............she got swept away by a pushy salesperson hanging out in the hotel lobby where we stayed in Puerto Rico, hawking this timeshare thing, offering an financial incentive to sit through his 90 min. pep talk....

Ironically, she signed up just in order to get a free $100 credit in the hotel....she said: " heck, I will listen to him, and wind up with a free massage!!
Hah ha............or so she thought........
Voila............she announced she impulsively bought a week in Feb. .....in Orlando! I said, "Orlando"?? You want to go to Orlando?? She said, "Oh, no", the "man" said I can swap it out for other locations."

That's when I told her to read the fine print !!!
She didn't (and she's no dummy - actually, she is a mortgage rep, but she wasn't thinking clearly - the pep tal worked on her!!)

So now...........it costs her $800 a year, every year, for a "maintenance" fee, whether she goes away or not.............if she wants to swap out her week for another time or location, there are time constraints and limitations on when and where she can go................she can only "bank" (save" ) up to 2 years...otherwise she loses that time if she doesn't use it............there is also some other $150 fee she pays when she actually does go somewhere for a week.
Gee - what a deal!
NOT

I believe she bought through Mariott or some other big name in the business.
There is a lot of fine print to read!!!

all in all...............I'd rather have the freedom to plan my trip according to where I really want to go that year.............another problem - she can't book plane fare too much in advance (to get a better rate perhaps) because the swap can' t take place too far in advance, either..I think she can only book it 60 days in advance, depending on availablility..

Those are some of the pitalls........she paid close to $20,000, about 6 years ago for a winter week in Fl - a location she didn't plan on visiting, but the salesmen told her she could "easily" swap it out..........NOT so! She has only gone away 2 times...........so look at what she has paid in.......amazing....
She found out the hard way that it wasn't the deal she anticipated..and there's no way she can sell it for even half of what she paid for it..
1 vote Thank Flag Link Wed May 16, 2012
John,

That is a very good question. And they are not timeshares, they are vacation ownership packages. =)
Time shares are experiencing a boom right now because folks are not buying as many second homes as they were in the past.
The way I see it, if you cannot afford a second home, but want a decent vacation package for you and your family, is not that bad. Be prepared to pay more fees than what they tell you initially, but in the long run, you should get a steal. With a lot of travel websites, you sometimes are able to get some incredible packages.

If you want to buy a second home in California, let me know, I have a great team of Lenders at my disposal to help you find and finance your second home.

Hope this helps

Hector R. Gastelum
Realty Executives Dillon
REALTOR #01382940
2240 Otay Lakes Rd. #306
Chula Vista, Ca 91915
hectorgastelum@yahoo.com
619-954-2225
125*142*10754
efax 619-270-2516
1 vote Thank Flag Link Wed May 16, 2012
Wouldn't touch it with a ten foot pole!
1 vote Thank Flag Link Wed May 16, 2012
My advice would be the same as the other two agents... with the exception that in my personal opinion you won't even get half of what you paid when you try to sell... I know cause I tried selling a few I owned.

It's a great way to take a vacation each year but don't pay retail. Lots of great deals for resales. Also many people rent their unit at great prices to cover the yearly dues.

Good luck.
Denise Gleavey
Coldwell Banker
858-565-7777
Denise@IHandleRE4U.com
http://www.IHandleRE4U.com
1 vote Thank Flag Link Wed May 16, 2012
Its only my personal opinion, but I believe the only ones who should think of a timeshare as an investment is a timeshare salesperson.

While you may possibly realize vacation savings, you will likely go through the ringer trying to resale your share. Typically, you might expect to resale for half of what you paid...
1 vote Thank Flag Link Wed May 16, 2012
No! They never were a good investment ...

Maybe look into those that have been foreclosed on ... could find some good deals there ...

Google "timeshare resale"

Good Luck,

-- Rod --
Serving San Diego Families for 30 Years!

The Powers HomeSelling Team
PowersRealEstateTeam@gmail.com
1 vote Thank Flag Link Wed May 16, 2012
To be quite honest with you, I never felt Timeshares to be a good place to spend your money on. The Timeshare market has been in turbulence for quite some time now. Take a look on ebay or craigslist. People are practically giving them away, just to unload them. The funny thing is, often they can't find takers. Now that doesn't mean that it’s not the right choice for everyone. If someone were to purchase one on the secondary market at a very low cost and the annual fees were relatively low, it might then make sense. The key thing of importance is that the Timeshare owner actually uses it and takes full advantages of the weeks that he/she has purchased otherwise it’s a complete waste of money regardless of how cheap it was purchased. I hope this helped.
0 votes Thank Flag Link Sat May 19, 2012
GTO, I'm not sure what your comment is all about but I don't think it belongs in this venue.
0 votes Thank Flag Link Sat May 19, 2012
Thumbs up to John Juarez! You're spot on. Timeshare purchases are not an investment but just a way to control your vacation costs and assure you of the availability of a consistent level of quality to your liking and affordability level.
0 votes Thank Flag Link Sat May 19, 2012
Currencies would be an good option to invest in, as there's always something happening that changes the value of the currency.
Web Reference: http://www.gtoptions.com/
0 votes Thank Flag Link Fri May 18, 2012
Debbie, you are also correct in that if you don't utilize your timeshare on a regular basis you're throwing money down the drain. Timeshares aren't for everyone for sure. But if you are one who likes to travel and has the time you can't beat it.
0 votes Thank Flag Link Thu May 17, 2012
Denise, you are absolutely spot on. Don't buy retail and don't buy into this point system biz. It doesn't pencil at all and talk about fine print? Lot's of minutia. 65% of the front end cost is in the marketing and sales costs i.e. marketing (the advertising cost per person to get you to the front door) lead generation (getting you into the front door for the pitch), sales commission (usually 25% of the total cost which is split up between the sales team i.e. liners, closers and managers.

My daughter wanted to buy into the Desert Springs Marriott and I told her to look for a Phase I Villia online. She found one 3 years ago for $6k. That was only $300 more than I paid for mine 18 years earlier.
0 votes Thank Flag Link Thu May 17, 2012
OK, here's the drill.

We purchased our Desert Springs Marriott Villa week in 1991 for $5,700.

Our average annual outlay has been $1000/yr for the past 21 years for annual maintenance
fee and property taxes for a total of $21,000.

We have paid approximately $400/yr for our Interval International membership, deposit fees &
trades for the past 15 years since becoming members of Interval International for a total of $6,000.

Our total outlay for the past 21 years has been $37,000.

For an annual average outlay of $1,760.

or an average per night $250

That stated or 2 bedroom 5 star villa which can be split into two separate trades (two weeks).
cuts our cost in half which means our cost per day is only $125

We've traded our weeks for 5 star waterfront resorts in Marbella, Spain, Los Suenos,
Costa Rica, Puerta Villarta, Mexico, Cabo San Lucas, Mexico,
Kolina Oahu, Lahaina, Maui, Boston Custom House twice, Newport Coast
Marriott Suites 8 times and countless other 5 star world class resorts world wide.

The average rack rate at these 5 star resorts for non timeshare owners is upwards of $500 per night which is $3500 per year. if you spend two weeks in a 5 star 2 bdrm 2 bath villa you would be looking at $7000 per year for a total of 147,000 vs the $37,000 we've spent in the past 21 years.

That's a difference of $110,000. These aren't hypothetical costs. These are the facts based on what we've actually spent during the past 21 years and what we found the daily rack rate to be for a villa in the same resorts we've stayed in.

Mind you these aren't hotel rooms or even suites. These are totally furnished and appointed villas with full all inclusive kitchens, 2 full bathrooms, master bdrm with jacuzzi bath and all the comforts of home. You bring your bathing suits, tooth brushes and groceries and you're right at home.

No, I'm not a timeshare salesperson. I've just heard so many people say that anyone who bought into a timeshare was not a very prudent investor. Personally I'll put that $110k savings into Apple stock which I actually did quite awhile back and listen to all the experts tell me what a mistake I made investing in iPhones, iPads, iPods and Mac Pro's. LOL.

Thanks for all the varied opinions and views. This has been fun.
0 votes Thank Flag Link Thu May 17, 2012
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