A Consumers Guide to Vacation Timeshares
TIMESHARE 101THE BASICS
Started some 35 years ago in the French Alps, vacation ownership started out with the idea of being able to exchange ones vacation accommodations with someone elses. While not everyone could afford that second home at the beach, by owning just a segment of that home, or condo, it now came within most peoples reach. Add an exchange organization to implement trading your beach for someones mountain and bingo, youve got an industry!
By locking in the purchase price of accommodations, vacation ownership (time sharing) helps to ensure future vacations at todays prices at luxurious resorts with amenities, service and ambiance that rival any of the worlds top-rated vacation destinations. The reasons for purchasing most frequently cited by current timeshare owners are the high standards of quality accommodations and service at the resorts at which they own and exchange, followed by the flexibility offered through the vacation exchange opportunities and the cost effectiveness of vacation ownership. Nearly one-third of vacation owners purchase additional intervals after experiencing ownership. This trend is even stronger among long-time owners; 41.2 percent of those who have owned eight years or longer have purchased additional intervals within that time.
Vacation ownership offers consumers the opportunity to purchase fully-furnished vacation accommodations for only a percentage of the cost of full ownership. For a one-time purchase price and payment of a yearly maintenance fee, purchasers own their vacation either in perpetuity or for a predetermined number of years. Owners share both the use and costs of upkeep of their unit and the common grounds of the resort property.
Each condominium, or unit, of a vacation ownership resort is divided into weeks which are sold separately. The weeks are priced according to a variety of factors, including size of the unit, resort amenities, location and season.
Unlike a hotel room or rental cottage, which require payment for each use with rates that usually increase each year, ownership at a timeshare property enables vacationers to enjoy a resort, year after year, for the lifetime of their ownership. Timeshare ownership offers vacationers an opportunity to save on the escalating cost of vacation accommodations over the long term while enjoying all the comforts of home in a resort setting.
Truly a home away from home, vacation ownership provides the space and flexibility to suit the needs of any size family or group. While most vacation ownership condominiums have two bedrooms and two baths, unit sizes range from studios to three or more bedrooms. Unlike hotel rooms, there are no charges for additional guests. Also, unlike hotels, most units include a fully equipped kitchen with dining area, washer and dryer, linens, stereo, televisions, VCR and more.
Timeshare resort amenities rival those of other top-rated resort properties and may include swimming pools, tennis, Jacuzzi, golf, bicycles and exercise facilities. Others feature boating, ski lifts, restaurants and equestrian facilities. Most timeshare resorts offer a full schedule of on-site or nearby sporting, recreational and social activities for adults and children. The resorts are staffed with well-trained hospitality professionals, with many resorts offering concierge services for assistance with visiting area attractions.
So who benefits from owning a timeshare? Well, lets start with you. Do you like to vacation? Do you wish you could someday go on that dream vacation, just once in your life? Have you ever had to tell your family that this year it just was not in the budget? Ever find yourself so immersed in your work that the years tend to slip by, always saying, Next year well take a nice vacation? And how about that second honeymoon, just the two of you, every year? Or how bout those kids, how quick theyve grown! How often do you all get to take off and make those special memories that will last a lifetime? Hey! How about just getting the heck out of Dodge by yourself! A little personal R&R! And finally, would you like to be able to take any vacation you want, go anywhere you want, stay in super luxurious accommodations, and not have to worry about the money? Guess what! This is what timesharing is all about!! And if you answered yes to any of the above, you need to read on.
JUST THE FACTS, PLEASE
So heres how it works. (Finer points coming up). You purchase your week of timeshare. You may use your own resort each year, or you may use a different resort in a different location each year. Your choice, each year. Go to Disney World this summer, take off skiing in Colorado next winter, see Paris the following spring, and watch the leaves turn in New England in the fall. Whoaaaa ..wait a minute! You thought you had to use the same week each and every year? Thats one of the biggest misconceptions about timeshares. Unless you are one of the roughly 2% of timeshare owners who wish to return to the same location each year, at the exact same time each year, youll find yourself making
your own plans each year according to your own schedule.
So youve got your week of timeshare in say, the islands. You own a week in March and decide you want to go someplace closer to home this year, lets say a week down at the beach in the summer.
All you do is call your exchange company (more on that in a minute) and tell them what youd like to do! But what are your chances of getting that vacation youre asking for? Probably everyone else gets it but you, right? Well, not actually. For the past eight or nine years, the exchange companies have been able to fulfill properly processed requests 97 to 98 percent of the time!
PATRIOTISM AND TRAFFIC LIGHTS
Aha! Whats that properly processed stuff? Well, its really nothing special, just some common sense. (Youre going to get the feeling in just a second that all this stuff is really pretty simple, no rocket science here). There are two major exchange companies, Resort Condominiums International (RCI); and Interval International (II). Both companies link timeshare resorts together world-wide. When you want to make an exchange, you do not have to find someone who owns that beach resort and ask them if they want to use your ski resort. You simply call your exchange company, RCI or II, and make a request. Think of them as a bank, youre going to make a deposit (give them your timeshare for someone elses use this year) and make a withdrawal (take out a different timeshare for your own use this year). If someone takes out your timeshare later, so be it. If not, you are under no obligation. You still go on your vacation and yours just goes unused that year. This process occurs millions of times each year, so you can see how the rates of confirmation stay so high.
So that means I can take my off-season week at my beach resort and move it to Christmas in Maui? No. Heres where that common sense comes in. There are certain parameters involved to ensure that the system is fair. If you own an off-season week somewhere, expect to exchange it for other off-season weeks, not the most prime time of year at any location you choose. To help you make smart decisions, the exchange systems publish full-color catalogs showing the various timeshare resorts world-wide. They then color code the various weeks of the year for each resort. RCI uses red, white and blue (very patriotic). II uses red, yellow and green. Same designations, just different colors of the rainbow. A red week with either RCI or II designates a week that is highly demanded. This might be winter at a ski resort or summer at a beach resort. A blue, or green, time is the off-season. This would be the opposite of the above example: summer at the ski resort and winter at the beach resort. White or yellow weeks are in between; not really prime season and not really the dead season. Obviously off-season weeks cost less to purchase. Prime season more.
Now heres that common sense. The exchange system works on whats known as a value for value system. Want the best weeks at the nicest resorts in the most sought after locations? Own something similar to exchange. Think this way: off-season gets off-season, prime season (red weeks) get you the best.
LOCATION, LOCATION, LOCATION
Youve heard the phrase that us real estate people use. There are only three things that matter in real estate Location, location, and location. The same is true in timeshares. Now pay attention cause this ones important. If theres one mistake we see people make its this one: Many first-time purchasers purchase a red week thinking that they can now exchange for any red week in the system. WRONG. In addition to the color of the week you own (lets cut to the chase, buy red time and forget the rest), theres another factor that makes the system fair. You not only will exchange red for red, but also the location you own will determine the location you get. Own a nice red week, but its in the middle of nowhere? Dont expect to be getting London or the Caribbean. The best locations get the best locations. Otherwise, why would anyone in their right mind spend the bigger bucks for the really nice places when they could buy something of lesser quality and exchange into the better ones?! See, told you this wasnt rocket science.
TO DEED OR NOT TO DEED THAT IS THE QUESTION
O.K., youve got the color stuff down pat. You know you want to purchase a good location. Now-- what am I buying? Well, in a lot of cases your timeshare will be deeded to you, similar to your home. You may also purchase a timeshare that is a long term lease that you will have for a fixed number of years. Each has its good points and neither one has an outright advantage over the other. In many instances, the local custom or laws will dictate which way you purchase. With both, you will have lots of options. Lets say for instance that a year comes along and you just cant use your timeshare. Now what? Well, not to worry. You can: A) Let a friend use it B) Get greedy and rent it to your friend, or whomever. C) Call up the exchange system and do half of an exchange (give them the week for someone else to use, but do not request something in return. Youll have two years to call back and get that vacation at a more convenient time. This means you can save up, or stack vacations). Other types of plans involve floating time vs fixed time, and fractional membership and points. Were going to skip these last ones for now. Theyre more minor points and were going to keep it simple here. Call us with any questions.
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 SALESMAN. And this is not just any salesman or saleswoman, this is THE salesman. He knows hes got just 90 minutes with you and hes gonna make it count. He does 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 know many of them ourselves personally.
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 for 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 unless you truly bought a steal), $7,500.
YOUR NEW TOY
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 him 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 or not keep it. She asks you why youre crying.
Yes, my friends, there are bargains and then there are bargains. Our strong advice: buy a resale or a developer close-out. Same stuff, lower price.
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 SALESMAN. 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 SALESMAN. 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!
A COMMERCIAL ANNOUNCEMENT
O.K., weve been good. But now for the first time were going to just slightly mention our own particular company, Island Consulting Realty. In over 14 years in this business, we have very, very many of our customers who use their timeshare worldwide and have a blast with it each year. Yet they have never ever seen the actual resort they bought! Blind faith? Nope, we help them do their homework, give them tons on info on the resort they are interested in, and then give them a one year guarantee. Its a no-brainer. They take no risk.
NOW BACK TO THE SHOW ALREADY IN PROGRESS
So we told you the negative of buying a resale. Not all that bad really. Now the positive: YOU SAVE MONEY!! Lots of it! Youll need a wheel barrow just to get it home! But wait, theres more! Remember when we touched on the subject of reselling the timeshare you bought? Thought we forgot didnt you? Heres where buying a resale from a professional resale broker comes back to help you even more later. You may have heard that reselling a timeshare is a tough thing to do. Yes and no. If you own junk (off-season weeks, a resort in a poor location, etc.) there is not much of a market for it. It is a tough thing to sell. Quality sells. A professional resale broker with your best interest in mind will keep you away from the junk. A good red week, in a prime location thats high in demand and properly priced will sell, and sell, and sell. (If not, our company would have been out of business long ago). Buy quality. Buy quality. Buy quality. Youll get the exchanges you want, youll have pride of owning a wonderful resort, and youll have an easily salable timeshare if you ever decide to sell it.
WHATS IT COST FOR ALL THIS ?
Boy, theres a loaded question. Timeshares will cost anywhere from $500 to $40,000 for one week. The industry average for all timeshares sold direct from the resorts (keep in mind: all timeshares sold means blue weeks as well as red weeks, studio units as well as two bedroom units) is $10,080. O.K., heres the scoop. The junk usually hangs out in the real low end of the price range, just hoping for someone to come along and not know any better. The $40,000 stuff is usually something really special like the Christmas/New Years time frame in Vail, Colorado. And, of course, you bought it right at the resort. A professional resale broker will be able to find the bargains for you. But as a rule of thumb, $4000 to $8,000 for a red week will generally buy you a really nice place thats easy to exchange around for other places. Prices go up and down, but thats the general range. Certain very prime locations and certain resorts may command a little higher price, of course.
Youll have a maintenance fee each year. Maintenance fees cover you for: maintenance of the grounds and common areas, interior housekeeping such as maid service, insurance for storm damage or liability, utilities, management, replacing furnishings and appliances every few years, replacing broken items, and a reserve fund set up to cover the time when its time for a new roof, etc. All of these things are necessary to ensure your investment stays up to par. Then, if and when you go to resell it, you have a good looking, well maintained property. One note on maintenance fees: Some people say that this is one disadvantage of owning a timeshare. Not so. Lets say you rent your vacation by staying at a hotel or renting a vacation home. Are you paying for the cost of maintaining that hotel or vacation home? Youd better believe it. Its all built into the rent. Think of maintenance fees the same way as money you spend to maintain your own home. Its money well spent that will come back to you. Maintenance fees will generally run from $200 to $450 once a year, depending on the resort you own, the amenities there and the size of the unit you are purchasing. Also, keep in mind that with timesharing, there are no hidden hotel taxes or occupancy taxes. These taxes alone can add $150 to $250 to the cost of your hotel bill.
If you want to belong to one of the major exchange companies, RCI or II, theres an annual membership fee (about $80) and a fee if you want them to make an exchange for you (about $110).
And thats it.
HOW BIG IS THIS TIMESHARE BUSINESS, ANYWAY?
Big, really big. The timeshare industry is the fastest growing segment of the travel industry world-wide. More than three million households own vacation intervals at nearly 4,500 resorts located in 81 countries. Vacationers around the world are turning to vacation ownership resorts as their preferred travel destination, with timeshare owners hailing from 174 countries. North America remains the global leader with nearly half of all the resorts and approximately two million owners. Europe is the second most dominant region for vacation ownership, with approximately 22 percent of owners worldwide and more than 1,000 resorts.
The growth rate has been explosive. For the past nine years, the number of timeshare owners has increased an average of 16% per year. And look whos involved: Disney, Marriott, Hyatt, Ramada Suites, Fairfield Properties, Carnival Cruise Line, Royal Caribbean Cruise Line (yes, you may now trade your timeshare for a cruise!). And the list goes on and on.
Timeshare resorts are everywhere. From all over the Caribbean, the U.S., Mexico, Europe, The Far East, China everywhere you can imagine.
AND WHO SHOULD I DO BUSINESS WITH?
Well now you know weve got to recommend ourselves, right? But before we pat ourselves on the back, were going to give you the general info you need to know to pick the right people to do business with.
First, I think you now know that you can do business with the resort directly or you can purchase a resale. Unless you enjoy burning money, buying a resale or resort closeout is definitely the smart way to buy.
You might find an individual selling his or her timeshare. In fact, for people wanting to sell their timeshares, we not only offer full service brokerage services for them but also offer them a plan where we simply help them sell it; providing the necessary advertisement and promotion. If buying from an individual, enlist the help of a title agency or attorney for safety.
Pick a resale broker. Now heres where you also want to be careful. Make sure that the agent you are doing business with is licensed. In almost all states, to sell timeshares you must have a real estate license. You would think that any resale company would only use licensed agents, but they dont. Working with a licensed agent is for your protection. Call the appropriate Better Business Bureau in that state and ask if there have been complaints.
Ask how the resale company operates. Is timesharing their only business, or just something on the side? Do they actively participate in the industry or watch from the sidelines? If you request information, what will they send you? How about just general info, such as a pamphlet like the one you are reading now? And finally, what assurances do you have that you are making the right choice in your timeshare purchase? Is there a guarantee? If not, why not?
THE END IS NEAR
We hope you have benefited from our work. An informed consumer .well, you know. If you permit us just one last little bit of your time, wed like to tell you a little about ourselves and why we think were the only logical choice for your timeshare purchase. PLUS! Remember those developer close-outs we mentioned a few times? Were going to tell you about them as well.
Island Consulting Realty is a full service real estate brokerage dealing only in the timeshare industry. We handle resales of timeshares for individuals as well as handle developer close-outs. So whats a developer close-out? From time to time we are in the unique position to handle blocks of timeshares directly from a resorts inventory. This may be a resort that is almost sold out, and the salespeople have moved on. Or it may be a brand new resort that wants to get the word out fast. It may be a resort in the middle of its sales phase that wants more exposure. Whatever the reason, we may be able to negotiate wholesale prices for blocks of weeks. The resort has no overhead, marketing expenses or commissions on these weeks. We can then pass on very significant savings to you, the public.
For these developer close-outs, we are very picky as to which resorts we choose to work with. We only handle high quality resorts. We only handle red weeks. We only market them if we can sell them at absolute steal prices. We have had ten resorts we have helped in this manner through the years, and are currently marketing three, one in Mexico and two in the Caribbean. All of these can be viewed on our web site at www.TimesharesToGo.com.
For individuals, we offer a full service brokerage that is one of the largest legitimate time share resale companies in the U.S.
Our marketing is extensive. We advertise in major newspapers, billboards, telemarketing, direct mail, travel shows and through our own monthly newsletter, The Timeshare Times, which is available either by mail or email.
We have been interviewed on radio and TV talk shows for our expertise in the field of timeshares. We have given speeches to resort developer think tanks in Washington as to the complexities of off-site marketing. We are a member of the American Resort Developers Associationas well as the Maryland Better Business Bureau (1-900-225-5222). We are well known in our industry as a leader and one whos word is gold.
THATS ALL, FOLKS!! Porky Pig
Please feel free to call us at 1-800-809-6020 with any questions you may have. Were going to leave you with some of the best advertising we have .our customers.
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