Are Timeshares a Good Deal? | Nan McKay


Since I have owned, sold, given away, and otherwise disposed of many timeshares, I thought you might like a perspective on timeshares. When we vacation at a property we like, we are usually tempted to buy there, especially when offered $150 towards dinner or free sunset sail or something as enticing.

We are usually in travel euphoria, which means I am in a somewhat unreal zone enjoying freedom from the mundane. This state of mind is not usually conducive to a decision that will cost you thousands of dollars in the future. But I have done it – many times. So in a more rational state of mind, I will help you think out the real pros and cons of timeshare ownership.

What is a typical timeshare? A timeshare is a property with a divided form of ownership or use rights. These properties typically resort condominium units, in which multiple parties hold rights to use the property, and each owner of the same accommodation is allotted a period of time.

You can purchase a specific week at some timeshares. “Red” weeks are classified as highly desirable weeks because of the location or the time of year of use. For example, you could purchase week 48, which would be about the last week of November or the first week of December. In a ski resort or warm weather location, this week would be desirable and would typically cost more as a red week. This would not be a red week in a cold-weather location without a ski hill near. There is an exception. Some places are in such a highly desirable location that the whole year has red weeks.

When you buy in a property-type timeshare, you will pay the purchase price, taking on an annual commitment. You will pay maintenance fees and your share of property tax annually because you have fractional ownership. Annual maintenance fees range widely, depending on the week's classification, location, and “color”. Don’t be surprised if your maintenance fee runs $1200-1500 a year or more. And the more units or weeks you have, the more maintenance fees can add up.

With most timeshares, you can “bank” your unit, either with a trading company owned by the property management company or with a company like Interval or RCI. When you bank your unit, you no longer have access to it for that year. What you do have access to is a variety of units available under the company you banked it with. However, you have to choose from available units, and the unit you want for the timeframe you want it for may not be available. And you will pay a fee to utilize the other unit – usually about $150-200.

At a timeshare “presentation,” you will hear about how much you would pay for a hotel room so that you think it will be a good deal. So let’s talk about timeshare presentations. You think, “I’ll just go listen and collect my reward. I can say no, and it should only take about an hour.”  Ha!

They all start on a friendly basis, but, remember, the salesperson does this repeatedly. They have heard every excuse and form of no and have a counter-attack for each one. The more information you give them, the more they see a chink in your armor and have a response.

The first level takes at least an hour. If they offer breakfast, it could take longer. At that level, you think you are just going to say no, collect your “free stuff,” and walk out. If you survive the first level with a no, you will still go on to a second level, the closer, referred to as their supervisor, their boss, or their customer service representative.

We have been through all kinds of presentations, have purchased timeshares, and have lived to say no only a couple of times. If you have signed up for a presentation, they know you are somewhat interested.

The second level person is tougher, not quite as “nice,” and their objective is to find a chink the first level may have missed or not explored thoroughly enough. Plus, offer you new incentives to purchase. You are now well into your second hour because they let you wait a while in between the levels. We have been through every closure type, including one who yelled and screamed at us. There is usually a third level involving a money person.

You may ask, “Why don’t you just walk out?” If you want your “incentive,” you have to wait it out. And there is a certain level of politeness present – on your part, not necessarily on theirs.

You may be thinking that presentations aren’t a very pleasant experience. In most of the properties, it isn’t. A few have a “no pressure” policy which means they will keep it civil. It doesn’t mean that you will get through the process much faster or that they won’t develop an argument or new incentive for anything you say.

Several properties, such as Marriott Vacation Club, have the option of property timeshares and the purchase of points. Property timeshares can be turned into points annually, but your maintenance fee and taxes on the property will remain on the property timeshare status.

What’s the difference, and why would you want to convert from your timeshare to points for that year? Property timeshares are in a specific geographical location. In the beginning, you may feel you will always want to go to that location. But “always” is a long time. And your needs and desires may change over time. As we described above, you can always trade it, but banking and trading will cost you extra money, and you may not be happy with the results. We have traded many times, and occasionally, it’s spectacular, but often it’s a disappointment.

Points have no geographical location, and I prefer them because of that. However, even though you can use the points at any of the properties, look carefully at the properties. Are they clustered in certain geographical locations like Florida or even Hawaii? Think about airfare and how often you want to visit the same property or even the same general location.

You may say, “I see companies all the time that say they will resell our timeshare.” Yes, you probably do. However, you will pay a marketing fee, and it would be interesting to see the percent of timeshares listed that result in a sale. I think it’s probably a low percentage.

What about renting my timeshare? You can list it with Red Weeks. I have done that. If it is in a desirable location at a desirable time of year, you may be able to have them rent it for you. The chance of you recouping your entire maintenance fee is small after you pay the rental fee. Perhaps you could do it the opposite way – look for a timeshare rental for yourself rather than trying to rent yours.

The last temptation that may swing you into purchasing a property timeshare or points is the siren song of status. You can elevate to the next status level with only a few more “points”. You may think that status level will get you more status appreciation, but typically it doesn’t. You do have a few benefits, but I have not seen the same status benefit you get by checking into a hotel where you have the highest status level.

And now it’s time for the biggest deterrent. Timeshares and points are very difficult to get rid of, especially if you think you want even 50% of your investment out of them to get out from under a maintenance fee or if you have too many of them.

So here’s the bottom line. If the company offers points instead of property timeshares, you have more flexibility in their use. If you go into the purchase knowing you will have maintenance fees forever and that you probably can’t resell the timeshare and get your money out of it, and that you will use it almost every year, then proceed!

We still have a lot of timeshare points and units that we turn into points. We are more likely to travel and use them because we have them. It is an expensive operation, though!

If you can give them to your kids or a friend, the gift is a better deal for them. However, even your kids may say, “I don’t want to be committed to that maintenance fee every year,” or “I don’t want any restrictions on where I go for my vacation.” So, like that Lenox china you saved for all those years, your prized possession that you bought to pass along to the kids may, indeed, end up in a garage sale. Hmm. I don’t think you can even garage sale timeshares.

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