So what happens when my life style changes and I dont
want to vacation anymore? HUH?? Are you nuts? No more vacations? O.K., it can
happen. Now heres one of the beautiful things about timeshares.
Youve had it for years. That one time purchase you made so long ago has
paid you back over and over again (were talking money here, not memories
and fun times. Moolah, dinero, the green stuff). Now you have something you can
leave to your kids. They now can continue enjoying the timeshare you bought
years ago. And they can leave it to their kids, and on and on. You wanna
go back and figure how much money you saved over the years? Its mind
boggling. But, you say, Let the kids fend for themselves. I
want the money". IF, IF, you bought it right in the beginning (more on that in
a minute), you now have an asset that you have owned for years that you now can
resell. So youve had all these vacations through the years, stayed in
accommodations fit for a king, and now you get your money back?? What was that
IF, IF up there? And didnt I hear somewhere that these things
were hard to resell.
MOMMA DIDNT RAISE NO DUMMYS
Just as with everything else in life, there are all sorts of
ways to do things. Buying timeshares is no exception. There are two different
ways to purchase a timeshare. Direct from a resort, and a resale or close-out.
And were going to tell you the pros and cons of each.
First, the majority of people who purchase their first
timeshare buy it at a resort. Why? Because they got this letter in the mail
that said, Come look at our timeshare resort and get a free ___________
(fill in the blank). Greed drives them to get the free whatever. They
promise each other on the way to the resort that they wont buy a thing.
And then they meet
.THE SALESPERSON. And this is not just any salesman or
saleswoman, this is THE salesperson. They knows they've got just 90 minutes
with you and they are gonna make it count. They do this three or four times a
day, five days a week, 50 weeks a year. You dont.
Now, lets be fair. There are very many good and
professional sales people working at resorts. They can be very hard working
folks who are decent and trying to earn a good living. We dont fault them
for that and we salute them as a necessary part of the timeshare industry. We
personally know many of them ourselves.
But heres the down and dirty of it. The average
timeshare resort has a marketing overhead of 50 to 60%. In laymans terms
that means this: All those free gifts are going to be paid for by someone. You.
All that staff you see, all those salespeople, all the office personnel have to
be paid by someone. Thats right, you again. So you purchase a timeshare
lets say $15,000. (You know you got a deal cause the price
was much higher. But when you couldnt afford it, they were nice enough to
find you a foreclosure. ahem). 50% marketing overhead means that
$7,500 of that $15,000 went to pay nothing but the cost of getting all those
people together to sell you that timeshare. So whats the true value of
the property? (math quiz here). Thats right! $7,500! So! What happens
when you go to resell that property later on? Can you sell the cost of the
marketing you paid for? NO! So what can you expect to get for your timeshare?
Assuming no appreciation (dont assume it, its rare
truly bought a steal), $7,500.
YOUR NEW VACATION HOME
So you get home with your brand new shiny timeshare.
Youre proud as a peacock with a wax job and you go over to your neighbor
to show it off. What a coincidence!! Your neighbor just bought a timeshare as
well!! You show her yours and she shows you hers. (??) Anyway, you compare
notes. PeggySue now owns a timeshare at a really luxury resort with all the
trimmings. You must have spent some really big bucks for that!, you
exclaim. (You enjoy exclaiming, as opposed to just talking)
PeggySue then tells you how she found a resale for only $6,000. The original
price from the resort had been $14,000. She also shows you her one-year
guarantee that she will love her timeshare. She asks you why youre
Yes, my friends, there are bargains and then there are
bargains. Our strong advice: buy a resale or a developer close-out. Same stuff,
Now we did say there were pros and cons to each. Here they
are. First, buying at a resort will give you a few niceties. You will be able
to view the resort first hand. Youll make new friends with THE
SALESPERSON. You will learn what the term high pressure means.
(Remember when your mom used to cook with that pot called a pressure cooker?
Well, youre the meat.) You will receive a gift of some nature for your
troubles. On the down side, if you succumbed, you will have bought a timeshare
via the most expensive way known to mankind, and possibly the entire universe.
By buying a timeshare as a resale or a developer close-out,
there are also pros and cons. Lets be negative first. A professional
resale company will have a large variety of timeshares for you to choose from.
Thats good. They can take the time with you and discuss your vacationing
habits and what your needs are and all the different ways timeshares can
benefit you. They can make suggestions as to which timeshare resort
would be best suited to you. Did you catch something subtle here? THE SALESMAN
has only one product to sell you, his. Its going to fit you whether you
like it or not. Hell MAKE it fit! The resale company has no such
pressure. So wheres that negativity? Here it is: The only downside is
that you are probably not going to have the benefit of walking the resort
before purchasing it. Youre here, the resale company is there, the resort
is way, way over there. Yep, I know what youre thinking (We work on the
side for the Friends Physic Network). Youll just take a ride down to that
little ole resort and check it out for yourself. Doesnt work. By
the time you get back, if it was any kind of a good bargain at all, its
long gone. What was that? Then youll just wait for the next one? Ever
watch a dog chase its tail?
Now lets discuss for a moment why the above
doesnt matter anyway. Remember early on we talked about how only 2% of
timeshare owners go back to their home resort each year? That means 98% of
timeshare owners are using the exchange system each year. Meaning: the only
time they may have seen the resort they bought was when they were holding hands
with THE SALESPERSON. The resort itself is nothing more than a vehicle to use
the exchange system and let them go where they want each year! In fact, ask
your friend or co-worker who owns that timeshare how often they actually go
back to their own resort! Go ahead. Well wait
. See! Told ya!
Costs of Timeshares