S U P E R C L U E L E S S Newbie !!

[Karebear]

Hello! My name is Karen, and I've stumbled upon this website whilst looking up info on Timeshares. Looks like a great resource for a newbie like me, so I'm here to ask a lot of questions I know extremely little about time share. Thanks in advance for taking the time to answer my questions!

1) Correct me if I'm wrong, but my basic understanding of Timeshares is this: I purchase a time share for a lump sum of money for a property that I get to stay at for a specific time of the year. From then on, for the duration of my contract, I pay maintenance fees for the property? But I've also seen ads and information on timeshares with point systems? How does this work/differ?

2) How long are timeshare contracts, generally? Or do they end? Can I cancel, for a fee?

3) As a 20 something year old who wants to invest in Timeshare purely to travel around the world, can take time off any time of year, and want to aim to vacation 1-2x a year, what kind of Timeshare should I be looking into?

 

[vacationhopeful]

Start reading ... here. This is a new language for you ... there is BOTH/ALL versions as you mentioned about. So search your soul and look at how much you can afford for this luxury now ... in your life NOW.

Most of us have a solid source of income, brought houses (and may now NOT have a mortgage), have a solid retirement account (yes, start NOW, save early... compound those funds), and have funded college funds for the kids.

TS are a luxury vacation item in the GREAT scheme of things ... and if you want to keep TSs in your future ... rent now and decide if this is right for you OR you prefer cruising, 2nd home, tours to foreign lands, or that graduate degree (or change of careers). And I have not asked or mentioned, growing your family.

 

[dioxide45]

Timeshares are not necessarily the best way to travel around and see the world. You can see a small, usually glorified, slice of certain places. Timeshares don't exist in many places and seem to be heavily utilized in American, somewhat in Europe and other parts of the world.

That said, timeshare can give you, as @AwayWeGo would say, "the oportunity to stay in luxury accommodation at Motel 6 prices". NOt sure if that is necessarily true any more, but it can be an affordable way to travel if you can make it work for you. Timeshare doesn't work for everyone. You need to be an advance planner. You usually can't wait until January to start planning your summer vacations like most of the population does. You need to be able to plan a year or more in advance.

 

[Passepartout]

Karen, Welcome to TUG.
1) your first understanding is the 'old' understanding of timeshares, but since at most locations there is a 'high season, plus shoulder and low season. Think winter at the beach, or mud season at a ski resort. In order to sell those weeks- resorts implemented 'points'. everyone pays the same maintenance fees, then has to scramble to reserve those few prime weeks. What this means is that you MUST reserve early. there is essentially NO last minute availability of 'good' weeks.

2) Generally timeshare deeds are 'forever'- as are the ongoing fees.

3)Timeshares in international destinations are generally not in the cities where Americans want to travel. They're predominantly in the countryside. Plus as I said above- the good ones book up early, making timeshares impractical for spur-of-the-moment travel.

We like timeshares, but there are limitations. Think of TSs more as a second home type of vacation experience in exotic locations rather than 'travel' opportunities. They are expensive. Annual fees go up every year. They are hard to sell. In order to exchange to those exotic locations, you MUST belong to an exchange company (roughly $100/yr) and those exchanges cost a couple hundred dollars EACH time you do it.

They should only be bought RESALE! and ONLY with disposable money. NEVER finance a TS!

I don't mean to scare you off, but those are the hard facts. Best wishes on your quest.

Jim

 

[sts1732]

Start reading ... here. This is a new language for you ... there is BOTH/ALL versions as you mentioned about. So search your soul and look at how much you can afford for this luxury now ... in your life NOW.

Most of us have a solid source of income, brought houses (and may now NOT have a mortgage), have a solid retirement account (yes, start NOW, save early... compound those funds), and have funded college funds for the kids.

TS are a luxury vacation item in the GREAT scheme of things ... and if you want to keep TSs in your future ... rent now and decide if this is right for you OR you prefer cruising, 2nd home, tours to foreign lands, or that graduate degree (or change of careers). And I have not asked or mentioned, growing your family.

First off...Welcome and bless you for having the foresight to investigate first, rather than jumping into the pool with nothing but regrets. That being said, the wisdom being passed along so far, comes from those of us who have been at it for awhile. I have quoted the reply in that that pretty much says it all.
Having owned for more than 20 yrs. with multiple TS's, had I put all the monies in a Roth or similar savings I could have gone and done most anything, anywhere. If I had to do it again at the same age I was, I probably would but our children were grown, and fortunately our first one was bought right, a place where everyone else wanted to be(key West), at a time when everyone wanted to be there, and where we would go back YR. after YR.
Save your money, see the world first, buy the big house on the hill, or enjoy life before making a commitment that has possible regrets later.

 

[WalnutBaron]

Hello! My name is Karen, and I've stumbled upon this website whilst looking up info on Timeshares. Looks like a great resource for a newbie like me, so I'm here to ask a lot of questions I know extremely little about time share. Thanks in advance for taking the time to answer my questions!

1) Correct me if I'm wrong, but my basic understanding of Timeshares is this: I purchase a time share for a lump sum of money for a property that I get to stay at for a specific time of the year. From then on, for the duration of my contract, I pay maintenance fees for the property? But I've also seen ads and information on timeshares with point systems? How does this work/differ?

2) How long are timeshare contracts, generally? Or do they end? Can I cancel, for a fee?

3) As a 20 something year old who wants to invest in Timeshare purely to travel around the world, can take time off any time of year, and want to aim to vacation 1-2x a year, what kind of Timeshare should I be looking into?

Hi Karen, and welcome to TUG! You've already gotten some good advice here, so here is more advice for you (even at the risk of being repetitive), as well as my attempt to try to answer your specific questions:

First, I also commend you for finding TUG before making your first purchase. Many of us here--myself included--made the mistake of buying their first timeshare from the developer--at a sky-high price--and then re-selling it later at a brutal loss. With some exceptions, it is nearly always better to buy timeshares through the resale market with the help of a reputable timeshare broker. Not only will you receive in most cases the same or virtually the same ownership privileges as a retail buyer at a fraction of the retail price, but you will also be protecting yourself from suffering a financial loss when circumstances change and you need to sell that timeshare unit.

Second, I would advise you to buy the highest demand season you can find--even if you plan to travel during lower-demand times of the year. Why? First, if you can't use your ownership in a particular year, renting your ownership for peak demand seasons is not only much easier, but you'll be able to charge more for your rental. Second, while you will most definitely be paying a higher up-front price (even at resale) for your timeshare, the maintenance fees are the same--whether for peak season or low season, which means the low season owners are essentially subsidizing the high season owners. Third, if you buy into systems like Hyatt, Hilton, Marriott, or Vistana (formerly Starwood), you will be able to trade within your system for a nominal fee so that you have flexibility about the time of year when you really want to travel.

I offer this advice assuming you fit the following criteria (especially given you're only in your 20's, which means you still have big financial demands ahead of you such as buying a home, possible future family financial obligations, etc: 1) do NOT borrow money to pay for a timeshare; if you can't pay cash for it, you can't afford to own a timeshare. Much better to just go into the rental market to try a few different properties, without having to pay annual maintenance fees; 2) if you're not a good advance planner or if having to think about where you will vacation 9-12 months from now seems overwhelming, you may not be a good candidate to own a timeshare, since your home week ownership privileges require this kind of advance planning. Again, better to rent in those cases if you can't/won't plan ahead; 3) if you're not already contributing to your future retirement account (a work-sponsored 401k program or a Roth IRA) or if you're not already saving on a down payment for a home, remember that timesharing/vacations are a luxury and not a necessity--and those obligations should be taken care of first.

That said, if you choose well and can afford a timeshare, you will have some very nice vacations in your future, staying in units that are much roomier than a hotel room and typically with kitchen facilities which will allow you to fix your own meals when you want to instead of eating out every day when on vacation.

Now to your questions:

1. Yes, you will be paying for either points or a fixed week, depending on the type of timeshare you choose. Most owners here prefer to own a fixed week if the system allows it, since you are guaranteed your specific unit on a specific week of the year each and every year you own the timeshare. As I mentioned above, many systems will also allow you to surrender that fixed week in order to "trade" (using internal points) for another property within the system in a different location and different time of year to fit your needs/desires. Some systems are points systems only, with no fixed week ownership available. These allow maximum flexibility since the ownership is not fixed, but neither is the unit itself fixed, which means you'd have to maneuver to get a good view when you book your vacation, as opposed to having a guaranteed view/location with a fixed week. My advice is to read thoroughly the TUG section titled "Buying, Selling, Renting" for a lot more information.
2. Timeshare contracts in the USA tend to extend for life since they are deeded property, in most cases. Of course, you can choose to sell your timeshare, giving up your deed, and relieving yourself of the annual maintenance fee obligation, but you should always do so through a reputable timeshare broker (and many are recommended and posted here on TUG). Once you enter into a contract, you cannot cancel the contract later. It's like owning a house--you own it until you sell it (or default on it, in which case you'd be ruining your credit history and FICO score--something you would obviously prefer to avoid).
3. Because you're flexible with time of year and love to travel--and assuming you have the financial means to own--I'd recommend first identifying where you want to travel so you can discover which timeshare systems have properties in those preferred areas. That should lead you to a choice of hopefully two or three different systems, and then you can do your research from there.

In the meantime, keep asking good questions, and your friends here at TUG will be happy to help.