January 2009 Q & A

Q: My wife and I love to travel and have talked about purchasing a timeshare. The ones we have looked at were expensive, but we make pretty good money so that’s not really an issue. The problem is that with the economy the way it is right now, I’m not sure a timeshare would be a good investment. What are your thoughts? Thanks! –Anthony in New Mexico

A: Anthony, how nice that money is not the issue! Actually, money or no money, you should never think of a timeshare as a real estate investment. A timeshare is nothing more than a (mostly) pre-paid vacation plan or a vacation insurance policy. Understand that there is no such thing as a “new” or “used” timeshare as you are used to in terms of automobiles, etc.

The biggest secret about timeshare that the developers don’t tell you is that you don’t have to buy from them! Although I come from the developer side of the business, I have to say that 99.9% of the time, I advise consumers to purchase from a reputable reseller, such as Holiday. There are just not enough compelling reasons to pay inflated retail prices. If you’d like help guiding you through the vast assortment of timeshares out there, drop me a note and ask for MODULE 2. Have a great holiday season!

Q: I’m interested in two different timeshares, but can buy only one. One of the timeshares is with RCI and the other is with Interval International. Which of these exchange companies would you recommend? –Sylvia in Chicago

A: Sylvia, hello from a fellow Chicagoan. I moved down to Florida 11 years ago and seeing your weather lately, I remember why! But as for your timeshare question, it really depends on what your vacation needs are. RCI is not better, I.I. is not worse, or vice-versa. And I’ll bet you didn’t know that you have more choices than just those two! Without knowing more about your specific situation, I would be doing you a great dis-service by giving you a pat answer. Drop me a note and ask about MODULE 2, “Finding the Best Timeshare For You.” Happy Holidays.

Q: I have some friends who own a timeshare that they enjoy. I’ve talked about it with them, but the one factor that has kept me from buying is, what if I want to sell it in the future? I’ve heard timeshares can be very difficult to sell and I don’t want to be stuck with a timeshare if I no longer want one. –Vic, San Diego

A: Vic, while it is true that some people have trouble selling their timeshare, much depends on what they paid for it originally and what they expect to get for it. Regardless if I agree with it or not (I don’t, by the way), timeshares depreciate in [i]perceived[/i] value over the years. However, there is always a residual value to them . . . unlike a box of hotel receipts that you would have if you never purchased a timeshare.

Let’s look at some basic math. Assume you purchase a resale timeshare from Holiday for, say, $2,500 with annual fees of $400. Let’s say you use it once a year for 10 years. You will have paid a total if $6,500 (plus exchange fees and possibly a modest annual fee increase) for 10 years of vacation. If my math is correct, that comes out to about $93 per night. And if you sell it for even as little as $1,500 that you’ve still had better vacations AND $1,500 in your pocket that you wouldn’t have if you had stayed in hotels.

Vic, if you like to vacation, it’s almost impossible to go wrong with the right timeshare! Happy travels.

Do you have a timeshare-related question for Lisa, “The Timeshare Crusader”? Click here to send your question.

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