What would your advice to a friend be on a first purchase of timeshare?

If you had a close friend who wanted your advice on a resale timeshare purchase, knowing how happy you are with your own vacations and travel, what would you advise them to buy that is very inexpensive? You don't have to mention specifics, if you don't want to divulge your secrets.

Fairfield is a good system, especially resale.

RCI Points is an easy one to get, too, especially through the classified ad on Forums. Although I am holding off until the new points information is out there, along with the increase in costs.

What about individual weeks? Would you recommend some of the ones on eBay, just to try out timeshare?

Would you recommend your own resorts, even if they are older, because the trades are pretty good?

This came up because several of our friends, our kids' friends, and the firefighters Rick works with are always asking us what to buy. I tell them to buy something cheap with low MF's and try timeshare on for size. One of our resorts had a MF increase of 50% for five years to cover some updates, and that will end soon, bringing the fees down to under $400 for two bedrooms. That is a fee most could live with, just to try out for a while.

What do you think?

Buy where you want to go, when you want to go and consider trading a bonus

My favorite week is one that would cost us $3k to rent and that I don't mind if we use every year - I put in a request to trade- if I get it, great, if I don't, I'm perfectly happy going there every year..

Everything else is details

Definitely buy where you want to vacation. If you think you will want to trade, make sure it is in a place that others want to go. Something within easy driving distance would be practical.

Cindy,

Since you (and therefore your friend) live in the west, I'd first look into Worldmark ( instead of FF). But, since we love to visit SoCal and have found that our Socal resort is cheap and trades well that is a option.

Jalexander said:

Buy where you want to go, when you want to go and consider trading a bonus

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But this advice is the best. You can't go wrong owning somewhere you want to vacation most of the time.

Rent first.

That's how I was introduced into HGVC & as well as experiencing Gardens of West Maui (at least for one more day) :whoopie: (We leave tomorrow afternoon).

I only bought one sight unseen and that was for $51 on ebay and even that one I didn't bid until I had read the reviews on tug.

Cindy,
I agree with renting first and joining TUG and doing their research. You could always get your friends some last call vacations through RCI and have them pay the fees just to try a few resorts out cheaply if this is even possible in the western part of US.
You know how much money and time you have spent learning what you know, it is just not something you can share with people in a few hours of conversation.
I also would suggest Wyndham/Fairfield pts, but a good amount 154,000 min. This gives people alot of choices and flexibility without paying extra exchange fees if they don't want to exchange.

Buy only what you'd use.

Nothing beats treating a timeshare purchase as you would a summer home. Buy what you like (and can afford), where you like to visit and, for timeshares, the time you would most want to use. If you do that and then also happen to get a trade great. if not - no harm as that wasn't the plan anyway. Now look at the cost of the summer home vs that carefully selected timeshare and you'll see why its a very attractive option especially at resale prices.

Years of hand holding ahead....

I just helped a good friend of mine buy his first timeshare. I found a great deal for him (resale) and he just took possession of the unit. I recommended that he buy a unit at the same resort we own in Park City and he has stayed numerous times before (my treat).

It is a timeshare that he will probably use with his family for at least 10 years. I helped him understand the paperwork, how to call in and make reservations, I’ve spent many hours explaining timeshares and how he might buy one.

I took on a lot of responsibility since we are good friends. However, my advice to a person contemplating buying a timeshare is to buy from Marriott. Your friend will be in good hands and holding the Marriott will have them breaking even in no time. Many times the Marriott Reward Points will bring the net cost of the timeshare close to the 60% mark of resales.

Taking on the responsibility of making a recommendation to a good friend means that you assume all the functions of educating, guiding, advising, reservations, and answering many questions. If you are prepared to do this and are assured that the relationship won’t fall apart then you can recommend a Marriott Resale.

The Marriott will probably be near a location that they want to vacation, and Marriott’s exchange very well in II. Get a Marriott with a lockout and it doesn’t have to be Platinum – it could be much cheaper and in an off season. It will easily exchange into Orlando and at 59-days will snap up any Marriott in II.

Call the National Sales Office of Marriott (800.332.1333) and they can take over and make the sale – your friend simply needs to pick a location and time of year. Use RedWeek and MyResortNetwork for Marriott resales. There are many other top notch Marriott resellers out there to choose from.

Once you assume the role of timeshare mentor you can’t just dump it – it is a multi-year commitment to your friend. Let a developer take over the duties of educating and holding hands. The 2nd and 3rd and so on timeshares can be resale. The learning curve for timeshare ownership is large. Just who is going to take on that burden and still remain good friends?

P.S.
Bill's advice on renting that follows this post is excellent. However, renting never get's a person into actually buying a timeshare. My experience with folks renting is that they pay so much that they just don't want to continue with timeshares - too expensive is their impression. As we all know the secret to timeshares is to leverage your money invested and get 5-star villas for just the MF and break even later on the resale.

RENT before you buy....this is Rule #1

All too often, people rush into a timeshare deal from the developer or from eBay because they think it is a great deal.

Buy where you LIKE to vacation as trading is never 100% guaranteeded....this is Rule #2

Pay cash and do not finance.....this is Rule #3

If you can't pay cash, then go back and read Rule #1.

I like the idea of renting first to see if they like vacationing in a timeshare. I'd have them attend a few timeshare presentations to determine which systems work best for them. Then, I'd have them buy the system they liked the most if they decided they wanted to own vs. rent.

I agree with the others to suggest they rent. With the internet, it's far easier to rent now then it used to be.

Even though I like our HGVC, I concur that Worldmark has a lot more options for people in the West.

My advice is for them to find a Week for about $500 with MFs of about $400 and closing costs of $300 or less in a location where they want to go, and let me vet it for them. paying particular attention to the ability to dump it if they are unhappy. IMHO they are far better off starting the process with a few hundred dollars than the thousands it will cost them if they start out with the big boys.

This is sort of what I did with my Son. Helped him acquire a Ski Week (Week 9); in a location he likes (Keystone, Breckenridge); for a reasonable cost ($1,000); with a reasonable MF ($350) which will be easy to dispose of if he so chooses.

jalexander said:

Buy where you want to go, when you want to go and consider trading a bonus

My favorite week is one that would cost us $3k to rent and that I don't mind if we use every year - I put in a request to trade- if I get it, great, if I don't, I'm perfectly happy going there every year..

Everything else is details

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Excellent advice! I am with you

But what about those who do not want to go back to the same place every year or even every other year? We are among those in that category. And, renting sounds good but every time we look at it the cost is double or more many annual maintenence fees.

Diane

Perry, I know exactly what you are saying about mentoring. I had a person, a stranger, who inquired about my Redweek listing of my Gardens at West Maui last year. She didn't buy after I gave her tons of advice and told her how to rent the week, how it would trade, etc., then she bought from another person. She paid the same because mine was an annual week and the other one was an EOY, so I was surprised she would pay half my price +full closing costs and transfer fees ($550!). I don't think she made a good business move. She could have rented my week out on years she didn't use it and pay for a plane ticket with the difference. Oh, well. I did sell my week a few months ago. She still asks me advice all the time and I help her. She even calls me on the phone. It is a strange hobby I have, where I advise people all the time and do it happily!

Renting is good advice. I found a rental for one of our friends that turned out to be an RCI exchange. We didn't find out until after the confirmation was faxed and a deposit was made. I was crossing my fingers and worrying the entire time that the exchange would be cancelled upon check-in.

The thing is, there are so many ways to go. I just don't know the perfect way. I know what I like, but I am always thinking about how great Bluegreen is and how flexible Fairfield and RCI points are, but then I think it would be nice for all of our friends to just buy Colorado, where there are so few blue weeks and the proximity is great.

Keep your ideas coming.

Spence, I am going to take your advice myself. I have a few weeks I need to get rid of first.

Buy a mini system

Diane said:

But what about those who do not want to go back to the same place every year or even every other year? We are among those in that category. And, renting sounds good but every time we look at it the cost is double or more many annual maintenence fees.

Diane

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Then you are a perfect candidate for a multi-resort system, usuallyu points based, such as Wyndham, Sunterra or Worldmark among others. With those you can buy a home resort with a deed but each year you are assigned the value in points to be used at any resort in the system or to trade with a third party - usually with a priority an individual owner of a week doesn't get.

Buying into a system like Wyndham at resale prices of 80% or more off the developer price you can go different palces every year as your "home" resort. Buying at resale means you can always sell for the same price if you decide to unload it later. It is the best of both worlds.

depends on the purpose

ex. we bought a low cost beach week that we plan to use for years to come. We bought b/c the price of ownership (resale price plus maint fees) would be lower than renting after a few years.

We bought another place using the logic of above that we use every year that is also nearby, a hard trade and we get day use of facilities.

We bought a more $$ place that is fancier at the beach that includes golf (for also free). The golf package made it worthwhile to buy, plus you can only trade thru RCI every 4 years and we wanted to go more often.
All of above were using "BUY TO USE" strategy--and we have been very happy.

Lastly, just to trade, we bought RCI points---I think I prefer a fixed week, and have not been happy with the selection so far, but have only been looking for a few months.

Timeshares 101

The decision to buy a timeshare is very simple:

1. Buy any timeshare at any price you want

2. Rental rate for the same exact timeshare MUST be at least TWICE the MF

3. Sell timeshare for what you paid for it (or more)


The time needed to make the resale price equal to the purchase price is your risk. <-- Important

If you buy resale then there is ZERO risk.

If your purchase price is twice the resale value then 5 – 10 years of ownership is your risk factor.

Take WorldMark for instance. Wyndham (The developer) sells a WM credit for $1.85 and the resale price is about 75¢ each and that price has been constant or has fallen from 80¢ of 4 years ago. Buying from Wyndham can NOT be justified under any circumstances.

Marriott, on the other hand can easily be justified. A Pre-construction Marriott loaded with Marriott Reward Points has about a 3 - 5 year period of time before the resale price is equal to the Marriott sales price. Your risk is 3 - 5 years of ownership.

Measure timeshare ownership like this and it becomes crystal clear if buying from the developer is a good idea.

Buying resale almost always has a ZERO risk of ownership.

P.S.
Buying a cheap timeshare could prove to be a high risk investment!

Why you ask? Simple - special assessments.

Take the South African Sea Pointer as a bad investment (we own 2 of them).

Buy a cheap timeshare for $500, MF of $350, rents for $450, and an special assessment of $2,500 and you have a HIGH RISK timeshare.


P.P.S.
Item #3 includes the resale price + the net of #2.

E.g. you buy a developer timeshare for $35,000 resale is $21,000 and the MF of $1,000 is offset by a rental rate of $2,500 and 5% increase in resales per year and your period of risk is 6 years. This is any old Marriott on any old day of the week.

I would also add Disney Vacation Club to the list.

You can buy directly from Disney, enjoy it for 3 years and sell it and get your money back (usually 100% and possibly more). This of course, is based upon anyone buying since 1991-present, and is not a guarantee for the future, but the track record has been impressive. You can also buy resale and get about 10-15% savings, but if Disney has a special, then I would advise buying driectly from Disney.

Steamboat Bill said:

I would also add Disney Vacation Club to the list.

You can buy directly from Disney, enjoy it for 3 years and sell it and get your money back (usually 100% and possibly more). This of course, is based upon anyone buying since 1991-present, and is not a guarantee for the future, but the track record has been impressive. You can also buy resale and get about 10-15% savings, but if Disney has a special, then I would advise buying driectly from Disney.

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It probably has even less risk (shorter time to break even)

As I understand it, renting the same exact Disney will bring tears to your eyes.

I'd bet buying Disney has a less than 2 year risk. But, that's just a guess.


Don't fall into how the developers measure risk - (they don't have one).

The smallest number of years of exposure is a very desirable goal to timeshare ownership.

P.S.
The idea of buying direct from Disney or Marriott can have less risk than buying a cheap timeshare is counter intuitive - this is to your advantage since many other folks are going down another path and are no competition to you.

I think an important consideration is an honest evaluation of what the buyer's travel needs/expectations are. Marriotts, Disneys, etc. offer a different level of luxury/amenities, etc. than the cheap resales, but the buyer pays for the more luxurious accomodations. To some, that is essential, while to others, just being in the location they want is enough and it is not worth paying for.

I do think if it is affordable (not requiring financing) the Marriott system, like Perry suggests, is a safe investment, providing they buy under the right circumstances in the first place (pre-construction or resale).

PerryM said:

Buying a cheap timeshare could prove to be a high risk investment!

Why you ask? Simple - special assessments.....Buy a cheap timeshare for $500, MF of $350, rents for $450, and an special assessment of $2,500 and you have a HIGH RISK timeshare.

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Perry - I respect your thinking when it deals with the high-end market but I think you have a closed mind about the low end. I can just as easily say....

Buy a cheap timeshare for $1.26, MF of about $300, rents for (I don't know as I use it), and no history of special assessments and you have a BARGAIN.

I've probably had a number of these over the last 6 or 7 years and still have six. I've had two special assessments, both last year, both about $400, both Katrina related. No non-disaster special assessments like I had with my Marriott Monarch or like I have read about with the Marriotts in Vail and Fort Lauderdale.

I'm not trying to say I'm right and you are wrong. I'm just saying there are multiple markets out there to pick and choose from - like to each his own or something like that.

By the way, I got started in the timeshare arena with Marriott way back in the Monarch and Sabal Palms days. I broke about even selling three and made real good money selling my Monarch Crown Suite. It is just that I don't like having a bunch of money tied up in timeshare weeks.

GEORGE

m61376 said:

I think an important consideration is an honest evaluation of what the buyer's travel needs/expectations are. Marriotts, Disneys, etc. offer a different level of luxury/amenities, etc. than the cheap resales, but the buyer pays for the more luxurious accomodations. To some, that is essential, while to others, just being in the location they want is enough.

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Couldn't have said it better myself. To me being able to open my door and walk right out on the beach as I do in North Myrtle Beach or sit on my large 2nd floor corner beachfront deck as I do in Deerfield Beach is a fair trade for the luxury (and cost) I don't have.

GEORGE