Timeshares is good investment or not.

According to these guys www.timeshares.com economic trends in congruence to timeshare investment is good, is there any other like this.

Never buy a timeshare as a monetary investment .... when buying from the developer the minute you sign on the dotted line the value goes down considerably (3/4 in many cases). If you buy resale at a reasonable price, the only investment is future vacations for your family.

I agree with jayjay's post above, but I do think it's possible to consider your timeshare as an investment. For example, I think of my 2-bd/2-ba week 5 condo in Whistler as kind of like a variable annuity (something I invested money in that pays me back every year for the rest of my life). Here's how it works:

What it's worth: checking on-line, I cannot find anything comparable to my unit for less than $15K--so I consider that number as its fair market value--ie, the value of my current investment there. (That also happens to be $2K more than what I paid for it 10 years ago from the developer--but it doesn't often work that way.)

What I'd spend (or receive) renting a comparable unit: again, checking on line, I cannot find anything for less than $200/night. So I'm either going to get that much in rent or pay that much if I wanted to ski there. Let's say I rent the unit out.

So...dividing my net rental income of $900 ($1400 for week - $500 maint fee) by my $15K "investment" gives me an annual return of 6%. Is that great? No, it's not fantastic--but in this economy, it's not too shabby, either-- and this number does not factor in the falling value of the US dollar against the Can dollar (which, I think, largely explains why the condo hasn't gone down appreciably in value in 10 years).

If you start adding in the cost of exchanges ($150-250/yr), the return could drop to 4%. Still better than a CD these days.

I'm not sure why this topic was broached in the "Exchanges" forum in the first place, but.... Laurae9:

You make an interesting case above, but one which overlooks a few critically important and relevant factors:

1. Maintenance fees will generally increase virtually each and every year --- they are NOT going to stay the same. A good rule of thumb is to expect a minimum 6% annual increase, at least in my own experience. Rental costs don't actually seem to keep pace with those mf increases. 2. Special assessments inevitably occur. These are unexpected and unwelcome (but also generally unavoidable) timeshare ownership costs which occur over and above the costs of annual maintenance fees.

Factor the above two items in and your "return on investment" figures weaken considerably. I'm not "naysaying" here; I own several timeshares and I will certainly continue to do so, but I respectfully submit that timeshares can very rarely be honestly regarded as a good "financial" investment. That said, their value for guaranteed vacations at times and places of your advance choice has an intrinsic value of its own which can't easily be quantified --- but which is certainly separate and apart from just that of mere dollars and cents. Just my opinion...

Sorry, but I've got to say that your math is a little screwy. There is something you are not taking into account - yearly fees for the timeshare. Different timeshares have different fees, but I will bet one at Whistler in winter has fairly high fees. Ours are about $950/yr. and all I have to say is, you can get a pretty good hotel room for that money if it is just 2 people. And that doesn't include the fact that if you want to stay elsewhere you have to buy memberships in exchange clubs, pay exchange fees, and the cost (even secondhand) of the timeshare itself. The only reason we have a timeshare is because we were given one by my brother-in-law. Now it is an expense, however at least it forces my husband to go on vacation.

jk105 states: >> Sorry, but I've got to say that your math is a little screwy.<<

Whose math are you referring to? Your post provides no clue at all as to the post to which you are replying.

Let’s try doing the math another way: I just rented my Whistler week for $1500 net and with that money (+ $62 dollars), I rented a comparable week in Jackson Hole. (No exchange company was involved, which might have made me leary in the old days--ie. not being assured of the resort’s quality—but the internet and travel review services have changed all that.) Essentially, for the price of my maintenance fee (about $500), I received $1500 worth of accommodations. A penny saved is a penny earned, so…that’s $1000 earned on my $15K Whistler “annuity.” Or, a return this year of 6.7%.

An aside on maint fees: Yes, I agree, these fees often go up, but check this out: My 2008 maintenance fee for Whistler was $493 Can last year, which at the time equaled $508 US. THIS year, the fee will be $532 Can (an 8% increase), but given the Loonie’s recent dramatic fall against the US dollar this year, that’ll just be $409 US. My effective fee thus dropped over 20%!

Any chance your weeks are in February and you want to rent it in 2010 for that price?

Alas, my week is just one week ahead of the Olympics in 2010. I'm not sure yet what that means for rental prices. I'm still hoping it will command more than the usual rate, but I just don't know yet.

And I don't think we're supposed to be discussing that on these forums... :)

Just doing the math of what future figures might be ;-)

Hi I don't believe one should buy a timeshare as an investment. However, if you buy resale with the intent to keep the timeshare for at least 15 to 20 years, and choose an outstanding company, you can obtain quality vacations at far less than vacationing at hotels and resorts on a rental basis. I increase my value by doing exchanges since I don't have to travel in the summer as families with children usually do. I have had good luck in making exchanges in the summer for quality locations. I expect to lose about 50% of my initial price if I sell immediately, but will do better in about 10 years I believe. I use RCI's Last Call and get resorts for less than I paid for a hotel room per night in the 70's. I am happy with my timeshares and RCI exchanges, however, I appear to be in the minority of Redweek Members who use these forums. As an examle, I have traded a studio blue plus exchange fee for a huge 2br. with ocean view during "snowbird" time in southern Florida. I have also exchanged 2 studio white weeks plus 2 exchange fees for 6 bedrooms and six baths during the winter months in Florida. Stan.

Sounds like you did your homework prior to buying. You didn't buy from a developer and you know how to work the system with your resale purchases, congratulations ..... knowledge = power.

The reason why you see so many negative posts concerning timesharing is because people didn't take the time to research timesharing backwards and forwards and inside and out before purchasing. In the old days timesharing research was practically nonexistent, but with the internet and all the info concerning timeshare pros and cons and learning to buy resale instead of developer is an easy way to educate oneself thanks to forums such as Redweek and other timeshare related forums.

Hi Jayjay, I did buy one third of my holding from a developer, which was my first purchase. Fortunately, it was at a desirable resort. I would lose money if I sold now, but not as much as the typical 85% to 75% that one usually loses relative to the developer price. The balance of my weeks were bought resale. Except for the accumulated interest I would receive if I invested the money I paid for the timeshares, I keep an accounting of all my vacation accomodation costs to ascertain what value I am obtaining for my purchases. So far, I am happy with the value I receive. Stan.

It's a very useful exercise to keep track of the cost of vacations--doing so would make most timeshare owners quite content about the purchase they made, IMHO. And then there's a lot of incalculable benefits....Like, ever try to get a group of friends to go in on a condo rental with you, sometime somewhere? Everybody's like, Sure...but then it never happens. Instead tell them, Hey, I've got this condo at this place during this time, wanna come? People are more likely to get on board--you'll find grateful friends will even then pick up the tab for things like groceries, a rental car, etc. For me, facilitating the bringing together of friends/family for awesome vacations that they otherwise would not take has been one of the greatest joys I have experienced as a timeshare owner.

Hi I agree, the 6 br, 6 bath that I reserved was to treat my wife's former Bridge group to a Bridge vacation, because they had been kind to us on a number of occasions. I simply reserved the accomodations and invited them to come. Only two of the seven did not come for the visit. Stan.

It is abxolutely a great monetary investment.

It is the BEST investment anyone can ever make IF the right timeshares are bought at the right prices.

Not only do you make money every time you save money... but if you are enjoying life more THAT is the best investment you can ever make in your life. Glenn

ghhww wrote:

It is abxolutely a great monetary investment.

It is the BEST investment anyone can ever make IF the right timeshares are bought at the right prices.

Not only do you make money every time you save money... but if you are enjoying life more THAT is the best investment you can ever make in your life. Glenn

In this economy I don't go along with what you say above. The timeshare industry along with the entire tourism industry is suffering bigtime. I'm afraid the timeshare bubble is in the middle of a huge burst.

Investment by definition is - the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value.

A time share unit is absolutely NOT and should never be viewed as an investment.

Before you sit with a sales associate and sign a sales agreement for a new timeshare unit (being sold by a developer) do yourself a favor and check the resale/secondary market for similar properties. You will be SHOCKED.

If you choose to believe that you are getting something in return that exceeds the amount that you paid for your unit - that is a personal choice - you're probably trying to convince yourself you made a good decision - I did the same thing.

Just some "real world" data here - my wife and I bought a 1 BR unit in Myrtle Beach at an "upscale" resort in 2001. Sale price - $10,000. We sold the unit in 2007 for $1,000. When you factor in the maintenance fees, assessments, membership fees to either RCI or II and the exchange fees - these all add up to well over $1,000/yr.

My wife and I could have banked the original $10,000, and used this amount to take similar vacations over the six year period we owned the TS.

Timeshares are NOT an investment. They are a convenience - and an "encouragement" to try to coordinate an annual vacation - nothing more.

Do not enter into to this type of transaction thinking that you will come close to seeing a return on your investment or a positive NPV should you decide to sell your unit. It just DOES NOT happen that way.

Buying in to the timeshare was the WORSE financial decision i have every made in my life as there is limited site availability in Australia and there seems to be no cap to maintanence fees.Suckered

Timeshares are a good investment until you need or want to sell it. It is a great value as long as you use it or exchange it each year. Problem is when you want to sell it (maybe due to health issues, etc.) you can't find a buyer because there are too many timeshares on the market AND too many rentals. How did you manage to sell yours?