Good question. How does a timeshare work? I know all of you have experienced at some point, when on vacation, being approached by someone to attend a presentation about a vacation “opportunity” or receiving in the mail an offer for a vacation at a discounted price with a stipulation you and your spouse attend a 90 minute presentation about the property. (If you are married, the timeshare industry is very strict that both people in the couple must attend the presentation.)
The offers to entice participants in the presentation are often very good. I’ve personally attended over 30 “timeshare talks” and learned something from each of them and also received some very lucrative compensation for our time. I personally like the discounted stays, which often include a car and a hotel credit. Don’t be afraid to accept offers as long as you are strong minded to refuse the final hard sell and Don’t buy! If you like what you hear and see, walk away and start your research to see if the purchase will fit your lifestyle and budget. (You will have another opportunity to buy if you decide no matter what the representative says.)
A timeshare is just that. Selling a share of time into a resort system or at a particular resort. Over the years, the timeshare industry has evolved. (I think in a good way.) I went to my first “timeshare talk” on our honeymoon in Hawaii in 1978. We went because of the “free stuff.” I was hooked on the concept, but didn’t buy our first timeshare until the 90’s. I did everything wrong on my first timeshare purchase. I hope to share what I’ve learned over the years to help you not make the same mistakes, and if you choose, learn how to purchase and use your timeshare and be happy about it. My husband and I now own five timeshares, and bought each one for a specific purpose and are happy about all of them.
Questions to consider when thinking of purchasing a timeshare. Do you enjoy visiting the same vacation resort year after year? Do you enjoy having a kitchen and a larger unit while on vacation? Do you take annual vacations? Do you enjoy planning your vacations? Do you plan your vacations a year in advance? Do you enjoy traveling when you vacation or do you like to stay closer to home? Do you want to fly or drive to your destination? What is your budget?
Timeshare properties sell every year usage as well as sometimes every other year usage in odd or even years. For first time timeshare purchases, I would highly recommend an every other year usage while you figure the system out. You can also fill in the off year as you learn more. Some programs only sell points into a larger timeshare system where you don’t own at a specific resort, but into the system, and in this case, start with fewer points and then add as you figure out how to use this system.
This way you can learn the system without being too overwhelmed.
There are many timeshare corporations which have several properties and there are many timeshare corporations which only have one property. When you’re deciding if timesharing is for you, you will want to consider how you and/or your family like to vacation. WorldMark, for instance, is a point based timeshare system. WorldMark has properties all over the world. Owners pay monthly maintenance fees based on the number of points they own. Owners can add to their points. The more points an owner has, the more vacations. Other timeshares will sell a week at a home resort, but the home resort is in a larger system, such as Marriott, Hilton, or Hyatt. Timeshares will either sell a week in a 7 day block or sell a week that is converted to points, or sell points into the point system of their larger system. It seems confusing as you read this, but the main thing is to know there are differences and when you become interested in becoming an owner, don’t buy the first timeshare you are offered as it may not be the one for you.
I am a proponent of going to many timeshare informational presentations as one can to learn as much as possible before purchasing. Never believe the sales person, that the deal they are offering is the best you will see. It is not! You will have time to make a thoughtful decision at a later date.
We purchased an Hawaiian timeshare from an office in California. We bought one week every other year. We paid $14,000 and financed the purchase with the company selling the timeshare. Bad move on our part, but we didn’t know better. As it turns out, we did pay too much, but learned from the experience. Always buy a resale timeshare from a reputable timeshare resale realtor. You will pay a fraction of the cost.
What did we learn from our first timeshare purchase?
- Bottom line: owning property at a resort where you can get to easily, you can often get more from your money. Hawaii property, we went to once, now only trade.
- When going to a timeshare presentation, make sure your gifts are part of the deal to begin with. For instance, a discounted room rate on your current stay at the property, a visa card, a free something that is tangible right then. We were offered a discount on a flight, and that never amounted to anything we could collect. We’ve also not had any luck in collecting on future discounted rooms. Somehow there is never availability.
- Don’t buy a timeshare from the developer or from a sale presentation. Listen and learn during the presentation. If you like what you hear and see, do more research and buy on the resale market from a reputable timeshare resale realtor. Read reviews on the Internet.
- Buy a unit that is large enough for your whole immediate family. (We did this right. We bought a 2 bedroom, every other year even in Hawaii).
- Buy in a highly desirable vacation location and you will have high trading power. We eventually turned our week into points (for a fee), but still a good move and I am able to turn our Kaui week into 3 weeks of vacation.
- Points, I believe, are better than weeks, for the flexibility. Given the opportunity, buy a unit that offers trading with points.
- Ask what are the maintenance fees and when they are due. Ask if you own every other year are the maintenance fees paid yearly at half price or in full every other year. Are maintenance fees due in full, or do they offer payments.
- Find out how much it cost to join the exchange company and what are the fees to exchange.
- Does the timeshare you are purchasing offer Bonus Time? Bonus time allows for you as an owner to rent rooms at a discounted rate at your timeshare if there is availability. This is a great feature if you live within a 3-4 drive from your home resort. For example, we own four timeshares in Lake Tahoe because we ski and when we lived in the San Francisco Bay Area, most weekends we could utilize Bonus Time availability at one of them for $60 or $70 per night instead of $150.
- Day use privileges at the resort. All our Lake Tahoe properties have day use privileges which provide for use of gym, pool, parking, beach and whatever other amenities they have. We utilize the parking when going downtown where parking is limited, or going to a concert at one of the casinos in Lake Tahoe. We can utilize the private beach at another, as well as even though we are not currently staying at the resort.
Key takeaways:
Timeshares are a method of vacationing in various locations utilizing the time you own at your home resort or utilizing the points you own.
You must be a person who enjoys planning vacations in advance.
Timeshares are a commitment to vacationing for life. Your maintenance fees will be due whether you go on vacation or not.
For example, I booked a two bedroom unit one and a half years in advance for a trading fee of $249.00. My maintenance fees are $1200 per year for the unit I traded for the two bedroom in Lake Tahoe in July. If I were to rent the same two bedroom during the same time period, the hotel booking site lists the unit for $2500 per week. Since, I purchased the trading timeshare resale for $1400, I’ll be money ahead year after year when I vacation.
Timeshares are a way to vacation, not an investment.
Do not pay too much for the timeshare initially! That is the key.
