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Timeshares - Good, Bad, and Ugly? - Page 2

post #31 of 33
Not a time-share owner, but my dad tried selling time-shares for a while (he was bored with retirement). Here's his advice:

1. Buy only at a resort that you want to vacation in.
2. Trading your week is no reason to buy.
3. If you want to trade, you better have a great week at a desirable resort.
4. Do your homework, don't get sold at a presentation - never buy on impulse.
post #32 of 33
Originally Posted by SnowbirdDevotee
how do you figure?

>$1700USD initial investment
if you invested that at 8%(very possible for 50/50 stock/bond index), that's $1350 interest per year, now you add the $447 and you get $1800. But vice versa, you are probably probably took out a loan to pay the $17000 and are paying 8% on it. At least.
........ one could ever convince me that a signed time share agreement is a benefit, unless you would buy it "aftermarket".
k2rider is correct, it was only $1,700 USD , not $17,000 so did not borrow the money - did not spend much more than replacing some ski gear. If I had invested my capital at 6% the interest would be only $106 per yr, before tax. Any $ I earn in interest in NZ I pay 38c in tax, so ould not get much in the hand to go towards paying for accomodation. I bought in the aftermarket. I think the original buyers in my resort paid over $10,000 USD, ouch, it would not be worthwhile then. And my resort is rated as Gold Crown with RCI so I have good exchange value. I probably got a third of my captial investment back with the money I saved on my first exchange in Jackson Hole.

But I have met a lot of people who have been burnt badly, so it pays to be wary. Some bought through a tele-sales reseller company at $11,000 for the same unit I paid $1700 through the timeshare management company. Some who bought through the reseller did not even get title cause they went bust between paying thier money and getting title, a very expensive mistake. My advice is to buy direct off the management company for resales, and you know you won't get hit with unpaid maintenance fees either. Here in NZ the management companies sell 'repossessed' weeks where owners cannot pay their annual fees.

You also need to consider future cashflows, your situation may change and the annual maintenance fee could hurt. If you can rent it, that should cover it. My annual fee went up $20 this year cause the swimming pool needed refurbishing, but I don't mind as I want the resort to keep it's Gold crown status.
post #33 of 33
Just another number for folks to consider and reinforce not buying direct from the developer ...

Some of the ski areas are developing 'European Style' villages (why not go to Europe ?) and a major portion of the development are, needless to say, accomodations. The developer expects an 18% commission on any, and all, retail sales. They get to set the price in the first place so there's plenty of profit on top of that. We are suspicious about whether the developer will stay in town to collect the maintenance revenue stream or just leave it to a third party.

What I do when looking at fractional ownership and look at the published costs (or even resale values) times 50. So is a $20k condo really worth $1m and the $500/year maintenance really worth $25k (and if it is what are these special assessments for ?). Haven't done it yet but I can imagine that a deal came by that could justify getting involved.
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