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How do timeshares $work$? - Page 2

post #31 of 58
Quote:
Originally Posted by exracer View Post
At a conservative rate of appreciation for owned resort property of 10% compounded annually
Highly unrealistic assumption, don't you think? Especially considering that the real estate bubble is bursting right now.
post #32 of 58
I have found that the deals I get after I have used my points for the year are the real bargain. I mean $99.00 for a whole week in a big 1 or 2 bedroom condo either on the Mt. or near it is a no brainer.
post #33 of 58
Quote:
Originally Posted by exracer View Post
You sell the property after 10 years. At a conservative rate of appreciation for owned resort property of 10% compounded annually, the property has a future value of $1.3 million (a more realistic value of 15% yields $2.0 million over 10 years.
Hmm....I'd be interested to see where *any* resort property had a 10-15% annual appreciation. :
post #34 of 58
Here is some examples of Timeshare in Whistler I am considering, perhaps you guys can give me some advise.

Ok, Its easy to find Whistler timeshare for resale on the net, which is suprising to me. I figure a week each year is plenty for me and I was looking for the 2010 olympics, low an behold, I found a week 8 in mountainside lodge (whistler village 100 feet from the Gondola)for 10,000US, but the guy does want to sell any more, upon my inquiry.

For some reason I got a feeling that the timeshare resale at whistler is not very liquid because the above example should be pulled long time ago.

I found some thing like this:

Whistler Creekside Lake Placid Lodge: $5000US. Week float Red, annual ski season, Unit float, the maintainence cost is not given but it should be around 400US.

US10,000 Village Gate House Studio Week 12 Fixed date Maintainence 350US

Some of these are deeded some of these has 40 years lease on it. I figure if I do not go I should be able to rent it out to cover my cost and still be able to get some out of it at the time I don't want it any more.
post #35 of 58
Thread Starter 
life isn't always so simple!
A 375K 30 yr 2nd home mortgage is going to run $2400/month, taxes probably 1K/month, fees $500/month, and throw in another $600/month for utilities and miscellanea. That's $4500/month.
Also, is it always this simple. How about all those people that own "investment" condo's in Florida, how are they sitting now?? I've heard not too good whatsoever, they didn't get their 15% annualized did they?

Also, you have to figure that you can get 9% on your investment and your continued payments and then there are the people that buy into these things and then realize after 3-4 trips, same old same old, and they are locked into all these points and "limited choices". Like I have friends who have gotten into these deals and it seems nothing but a PITA! to me. They want me to take their week or go with them, but there are all these conditions and limitations, i just pick up the phone and go wherever, whenever. Not to say that for sure there are folks that likely do very well with vacation ownership, god know, real estate has boomed the last 7 years, but maybe we are at a RE leveling out period, when you look at the real estate funds and see most are up 20% annualized the last 5 years, maybe enough appreciation is enough. And thinking of that, maybe if you wanted to be an RE investor, it would've been MUCH easier to put your bucks in some REIT or RealEstate mutual fund and let it appreciate by 20% annualized without sitting in an airplane or studying your point options. That's a thought for sure.

What about the Solititude condo's, wasn't there a firesale on those units? Don't YOU guys generally overbuilt with your sales pitches and fuzzy math, run off to the next project, leaving an overbuilt area. I'm no real estate guy but I keep reading these Florida stories in the general press and I am sure there are many others throughout the country.

But from the other side, our contries population has gone up from 220K to 300K in not too long a time. Some of this real estate they are just not making any more of, like beaches, and regulation will somewhat limit developement in certain areas for sure. Are they making any more Whistlers or Park Cities, no, but these areas are expanding I guess. And we know the rich are getting richer in this country, the class of people who want these places and can afford them is growing larger, so that balances off for some of the fuzzy math.
post #36 of 58
We bought two weeks at a low-end timeshare in Vail for about $4,000, pay about $1,100 a year in fees. Works out to $79 a night for a prime two weeks in Vail with a fully equipped kitchen (save a lot on eating out that way) can squeeze 6 in, very comfortable for 2, and fine for 4.

Good deal to us. Always know what weeks we're going, so we can buy plane tix way in advance, and rent a car way in advance for about 1/2 what it would cost to rent it closer to the date.

You DO own something with a timeshare, we have a deed, and yes it might be hard to sell, and yes the costs could go up. For example, if the roof collapsed, all of the owners would have to share the cost to replace it.
post #37 of 58
My father sold timeshares for about 2 weeks when he tried to retire a few years back. If I recall correctly, the deed refers to your ability to give your time (and maintenance fee bills) to your heirs, not any real property as a deed generally indicates. It also allows you to sell your time, but once again, not any real property and the appreciation that generally goes along with that.
post #38 of 58
I don't think that is accurate. I have a real deed from the state of colorado, granted I don't own the property entirely, but it looks to me like I OWN 1/52nd of that unit.
post #39 of 58
Quote:
Originally Posted by SnowbirdDevotee View Post
Don't want to buy one, but am curious how they work financially. Why do people buy them? Are they ever a good deal? Let's say there is a resort that has nice hotel rooms for $350/nt with $$75-100 in taxes. I stay there for a week and it cost me $450 times 7 = $3200. How much does a timeshare cost for that $3200 week, what are typical maintenance fees. Why if the "rumour" is they are such a bad deal, why do so many people buy them, what is the sales pitch? (never been to one). I generally like going to different places for vacation all the time, and I like to go when I want to go, half weeks, easter, on my own schedule, so I doubt they would suit me. Just a curious question for the offseason for most of us.
As I think this thread has shown, infortunetely, there is no pat answers to your questions. Too many varibles. For some they worked great, for some not so great. While there are still plenty of time shares out there, just look at the big splashy ads in USA Today, the current trend in ski country has been the fractional share thing for alot of the reasons mentioned.

In general as an investment a fractional share at a quality resort has shown to be a good thing. Usage, rental income are positives, fees and taxes are negs. You just have to weigh it all out to determine if it's a good deal for your particular preferences.

BTW, the current real estate downturn combined with the sub-prime problem might present a buying opportunity at the right resort.
post #40 of 58
Quote:
Originally Posted by SnowbirdDevotee View Post
life isn't always so simple!
Quote:
Originally Posted by SnowbirdDevotee View Post
A 375K 30 yr 2nd home mortgage is going to run $2400/month, taxes probably 1K/month, fees $500/month, and throw in another $600/month for utilities and miscellanea. That's $4500/month.
Also, is it always this simple. How about all those people that own "investment" condo's in Florida, how are they sitting now?? I've heard not too good whatsoever, they didn't get their 15% annualized did they?

Also, you have to figure that you can get 9% on your investment and your continued payments and then there are the people that buy into these things and then realize after 3-4 trips, same old same old, and they are locked into all these points and "limited choices". Like I have friends who have gotten into these deals and it seems nothing but a PITA! to me. They want me to take their week or go with them, but there are all these conditions and limitations, i just pick up the phone and go wherever, whenever. Not to say that for sure there are folks that likely do very well with vacation ownership, god know, real estate has boomed the last 7 years, but maybe we are at a RE leveling out period, when you look at the real estate funds and see most are up 20% annualized the last 5 years, maybe enough appreciation is enough. And thinking of that, maybe if you wanted to be an RE investor, it would've been MUCH easier to put your bucks in some REIT or RealEstate mutual fund and let it appreciate by 20% annualized without sitting in an airplane or studying your point options. That's a thought for sure.

What about the Solititude condo's, wasn't there a firesale on those units? Don't YOU guys generally overbuilt with your sales pitches and fuzzy math, run off to the next project, leaving an overbuilt area. I'm no real estate guy but I keep reading these Florida stories in the general press and I am sure there are many others throughout the country.

But from the other side, our contries population has gone up from 220K to 300K in not too long a time. Some of this real estate they are just not making any more of, like beaches, and regulation will somewhat limit developement in certain areas for sure. Are they making any more Whistlers or Park Cities, no, but these areas are expanding I guess. And we know the rich are getting richer in this country, the class of people who want these places and can afford them is growing larger, so that balances off for some of the fuzzy math.


As everything in Real Estate, location is everything. I also doubt the annualized return numbers any developer is going to quote you, but there are some exceptions, even in a generally down or flat market. PC/Utah for example, is still a shinning beacon of value when compared to other resort areas. Even after appreciations of 50-100% in the last few years, the market remains strong, due to its perceived under value when compared to surrounding Rocky Mt resort towns. This does continue to drive a relentless development cycle that is literally ruining the area, but that's another story. Also, resort towns typically are the second home playground of the utlrariche, and they tend to be less affected by downward RE markets. The saying here in PC is that "the merely rich are being pushed out by the obscenely rich".

So that $375K (good luck finding that in PC/LCC/BCC) investment *may* have some legs and appreciate reasonably (10-15% on average) in the next decade. Then you would get a good ROI. Also, investing in a REIT gives you no use of a place, AND it is spread out over an larger area, with a current downward bias. I personally wouldn't touch one of those and have pulled ALL my money out, before the subprime train wreck hits those too.

Powdr
post #41 of 58
Quote:
Originally Posted by SkiMangoJazz View Post
I don't think that is accurate. I have a real deed from the state of colorado, granted I don't own the property entirely, but it looks to me like I OWN 1/52nd of that unit.
How then, do you explain that you get no real appreciation out of the "deed"? While the real property it sits on continues to appreciate, what can you sell your 1/52nd share for? If you can sell it at all. Certaintly not a profit. That indicates a decoupling from the real value of the land and improvements it sits on, therefore it's not really a deed.

Powdr
post #42 of 58
What about mismanagement issues like the ones at the old Playboy Club up near Mountain Creek? Local paper recently had an article about holes in the wall and falling ceiling tiles in the lobby.

Even the trend toward "buying" residental "condos" here in NJ is in MHO just nuts. My work partner just bought one and he has no control of the property .... he couldn't even answer question I had about who hires the maintenance crews or damages due to faulty design from water incursion. He was paying $700 in rent on an apartment and now he is paying $1400 a month on his "condo" which is no more than a one floor apartment.

What if "The Board", is siphoning off funds from the "maintenance fees" and is skimping on repairs or quality of repairs. Where do the monies from the fees go? Sure, it looks pretty when it's new, but how "purty" will it be in ten years.

Then I listen to his stories of his family, off twice a year to their time shares down in some islands, each of them lugging a suitcase full of frozen food and Ramen noodles for "vacation" cause the prices are so high they can't eat out. Some "vacation" ..... but .... that's me ... I'm odd and don't understand this stuff.
post #43 of 58
Quote:
Originally Posted by SnowbirdDevotee View Post
life isn't always so simple!
A 375K 30 yr 2nd home mortgage is going to run $2400/month, taxes probably 1K/month, fees $500/month, and throw in another $600/month for utilities and miscellanea. That's $4500/month.
Also, is it always this simple. How about all those people that own "investment" condo's in Florida, how are they sitting now?? I've heard not too good whatsoever, they didn't get their 15% annualized did they?
You're also forgetting about the rental management fees, that it only rents out for 15-20 weeks a year, and the fact that you'll have to refurnish, recarpet, repaint, and replace the appliances every 2-3 years. You're probably better off not renting it out. Get a place you can use yourself.

That said, the real estate market is good for buyers right now. Sure, the bubble has burst, but so many people forget the ald addage, buy low, sell high. If you're going to keep it for 10 years, my guess is you can count on 7-10%/yr.
post #44 of 58
I think JohnH is right. My friend bought a beautiful on the lake Lake Tahoe home for 1.5 Mil, they paid 50% down. Last time I asked them the net cash flow can only cover 50% of the mortgage... Go figure when they can recover their investment providing 10% increase in realestate prices.

Using that formula, how about a 3 Mil, 2400 sqf slope side condo in Kirkwood or a 12 Mil 6000 sqft ski in/out villa in Vail.

For vacation homes, it is never an investment. If you are lucky, you break even, if you hit a down turn, you lose money. Better off if you use it yourself, if you can afford it.
post #45 of 58
Quote:
Originally Posted by Powdr View Post
How then, do you explain that you get no real appreciation out of the "deed"? While the real property it sits on continues to appreciate, what can you sell your 1/52nd share for? If you can sell it at all. Certaintly not a profit. That indicates a decoupling from the real value of the land and improvements it sits on, therefore it's not really a deed.

Powdr
I have no idea legally, however I'm fairly confident that we could sell our weeks at a profit. Whether that has anything to do with the land value I don't know.

We got a great deal, and I've seen what other units are selling for, we would make a profit if we sold ours.

This is in Vail during the President's Day vacation week after all.
post #46 of 58
Thread Starter 
i learned a little from this thread. obviously all of these "deals" are not bad deals. every case is different. watch out for fuzzy math and big claims. also, the one timeshare owner above that is so happy that he can get cheap airline tickets way advance, that has never been my experience.(except of course sooner that 2 weeks can increase ticket price) and rental car, doubt time matters much at all.

personally, i have a house, an office, hobbies, that is plenty for me to keep track of and keep decorated. i have no desire whatsoever to have to be Lord and Master over another piece of property that I will use ocassionally. I enjoy the flexiblity of traveling whenever and wherever I want, to my whims. And for sure, after a few years many vacation destinations get stale, (except of course for the luxurious LaQuinta while I ski Salt Lake City, somehow I never get tired of that place!). Of course, I live in the country, so there is not need for me to have a place to escape to, I am already here.
post #47 of 58
Airfare, if you're using Frequent Flier points, only way to get to CO in the Winter is way in advance. Availability of good flights (non-stop) at low prices, only possible way in advance.

Car rental. $652 for a Jeep for two weeks including taxes, fees and pre-paid fillup on return, checked about 2 months before the trip it was almost twice as much, same company, Thrifty. Bought it about 9 months in advance, don't have to pay, just reserve.
post #48 of 58
It never ceases to amaze me what people can get worked up about on this site. I own 1/52 of a unit at Stowe, no it's not real property so that if I wanted to "tear down" my 1/52 of a unit I could do that, but so what? We get great vacations cheaper than we could otherwise in an equivalent unit, and that's exactly why we bought it. If we could afford a vacation home, we'd buy one. Maybe. It is nice to never have to worry about maintaining your vacation property. But no one in their right mind buys a time share expecting a big return on an "investment." Apples and oranges.
post #49 of 58
Quote:
Originally Posted by agent.5 View Post
Highly unrealistic assumption, don't you think? Especially considering that the real estate bubble is bursting right now.
Not at all. 10 year appreciation on Single Family Housing in Park City (84060 Zip Code), on an annualized basis, is approximately 26 %. 10 year appreciation on Multi-Unit dwelling in same zip code is more than 28%.

What is "unrealistic" is the "bubble" mentality of the investment. A smart investor doesn't fret over the ephemeral troughs (nor does she or he unrealistically rejoice over the same ephemeral peaks).

The real problem is capital.
post #50 of 58
Quote:
Originally Posted by pcskier View Post
Not at all. 10 year appreciation on Single Family Housing in Park City (84060 Zip Code), on an annualized basis, is approximately 26 %. 10 year appreciation on Multi-Unit dwelling in same zip code is more than 28%.

What is "unrealistic" is the "bubble" mentality of the investment. A smart investor doesn't fret over the ephemeral troughs (nor does she or he unrealistically rejoice over the same ephemeral peaks).

The real problem is capital.

What are you talking about? 10% going forward is "unrealistic." "bubble" is investing in the future using rear view mirror, and assuming the price can only go -- "up". I have no idea what are you talking about "smart investor"? Maybe you think a "smart investor" should be a gambler who ignores risks and maximizes leverages. The problem is not capital, as the Fed is printing money non stop and causing hyperinflation. Hedge funds have no problem borrowing billions on leveraged bets.

Here in Lake Tahoe, real estate prices are so absurd that the best case scenario is that there will be no capital appreciation in the next 10 - 20 years.
post #51 of 58
Quote:
Originally Posted by agent.5 View Post
What are you talking about? 10% going forward is "unrealistic." "bubble" is investing in the future using rear view mirror, and assuming the price can only go -- "up". I have no idea what are you talking about "smart investor"? Maybe you think a "smart investor" should be a gambler who ignores risks and maximizes leverages. The problem is not capital, as the Fed is printing money non stop and causing hyperinflation. Hedge funds have no problem borrowing billions on leveraged bets.

Here in Lake Tahoe, real estate prices are so absurd that the best case scenario is that there will be no capital appreciation in the next 10 - 20 years.
I'll type slowly to assist you in following along. First, "the Fed" doesn't print money: the United States Treasury prints money. "The Fed," otherwise known as the Federal Reserve System, is a council wholly apart from the Department of the Treasury. "The Fed" affects monetary policy through the establishment of federal lending rates. I am not sure what commodity or consumer good you believe is subect to "hyperinflation." Perhaps in the throes of your ranting you meant to imply that real-estate prices are "hyperinflated."

However, the scarcity of real property ("scarcity" in the macro-economic sense) dictates that the value of real property is largely market driven. Historically, the variable that causes discrete periods of oscillation in the real property market, and disrupts the market, is speculation. Speculative investing is precisely the type of investing that does rely on leverage and is betting on the come. Not the type of investor I was lauding at all.

Your measure of "absurdity" with respect to real estate prices in Lake Tahoe may have less to do with the prospect for such real estate to rise in value in the future, than it does with your inability to afford such real estate. In other words, the real problem is capital.
post #52 of 58
Quote:
Originally Posted by pcskier View Post
I'll type slowly to assist you in following along.
Quote:
your inability to afford such real estate. In other words, the real problem is capital.


So anyone that disagreed with your are either stupid or poor. You do not appear to be a nice person.

Thanks for showing us who you truly is.

In fact, your last paragraph is truly ridiculous, assuming that it is not a personal attack (I do believe it is). Even though no one can afford to pay for the price of real estate, the price of real estate will keep going up, because it is not a problem of affordability (just capital -- whatever capital means).


Furthermore, using Lake Tahoe as an example to predict real estate market price is bad, but using Park City (and just one zip code) to support your thesis of real estate price going to the moon is valid. Sounds like you are cherry picking data to fit your propaganda and need to expand your dataset a bit too, don't you think?
post #53 of 58
Quote:
Originally Posted by agent.5 View Post
So anyone that disagreed with your are either stupid or poor. You do not appear to be a nice person.

Thanks for showing us who you truly is.
Who I truly "is?" You hardly need me to illustrate one of the charcteristics hypothesized in your first sentence. Oops, that wasn't very nice.
post #54 of 58
Quote:
Originally Posted by SkiMangoJazz View Post
I don't think that is accurate. I have a real deed from the state of colorado, granted I don't own the property entirely, but it looks to me like I OWN 1/52nd of that unit.
Sorry, I checked out for a while. To answer you, I think it is accurate, so there .

Really, the deed part is only hype. I checked on the internet. Honest.
post #55 of 58
Quote:
Originally Posted by bjohansson View Post
Sorry, I checked out for a while. To answer you, I think it is accurate, so there .

Really, the deed part is only hype. I checked on the internet. Honest.
OK, like I said I don't really know about the legal part.

Bottom line is so far we're happy with it. We'll see what happens if and when we need/want to sell it. I do think we should be able to sell a unit in Feb. in Vail.
post #56 of 58
Quote:
Originally Posted by Ice Queen View Post
I think anyone considering buying one should buy one where they want to go, rather than buying with the intention of trading, and buy one where there aren't a million of them already (like there are in Florida.)
You're right on. Don't buy as an real estate investment but a travelling one. That is, you must have every intent to go to the same place most of the time. Ability to swap is a bonus and it works well but it's not free and you have to be flexible. With that in mind, whether it's worth it to buy or not becomes a pretty simply equation. An extra bonus is to be able to hook up with other owners and swap for free, and to take advantage of your benefits while return there outside of your week.
post #57 of 58
Quote:
Originally Posted by bjohansson View Post
My father sold timeshares for about 2 weeks when he tried to retire a few years back. If I recall correctly, the deed refers to your ability to give your time (and maintenance fee bills) to your heirs, not any real property as a deed generally indicates. It also allows you to sell your time, but once again, not any real property and the appreciation that generally goes along with that.
That's correct. A timeshare is nothing more than a 'pre-paid rental' of a resort property. It's paying for your hotel use up front, at a discounted rate, whether you use it for the time you paid for or not.
post #58 of 58
Quote:
Originally Posted by Powdr View Post
Hmm....I'd be interested to see where *any* resort property had a 10-15% annual appreciation. :
Quote:
Originally Posted by agent.5 View Post
Highly unrealistic assumption, don't you think? Especially considering that the real estate bubble is bursting right now.
It all depends where you buy, don't you think? Where we're developing, appreciation has averaged 25% annually over the past four years, with no end in sight. As PCSkier implied, appreciation is driven by demand and supply. If you purchase in an area where supply is limited but demand is high and not limited to the local market, then you can be assured that values will appreciate consistently regardless of what is happening in the rest of the market.

Real estate may be cratering in the U.S., but that's not the case in Canada, and especially not in the Banff/Canmore region where demand from buyers around the world drastically outstrips supply.
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