Posted by William Charles on June 27, 2017
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Published on June 27th, 2017 | by William Charles

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Benefits Of Owning A Timeshare

This is a guest post written by The Timeshare Guru. He has previously written ‘Complete Guide To Renting Timeshare Properties On The Cheap‘ & ‘An Introduction To Timeshare Offers‘. If you like those posts or this post please check out his site. 

Introduction

In my previous guest post , I discussed various ways to rent timeshares for some pretty incredible deals. Renting timeshares can be a fantastic way to travel while saving money and getting spacious accommodations.
In this post, I wanted to explain some benefits to actually owning a timeshare as opposed to strictly renting timeshares. Purchasing and owning a timeshare is definitely a controversial topic so I do not want to go into detail about whether you should purchase one, whether you should buy strictly resale, which timeshare or timeshare affiliation to buy or any further details on purchasing. If readers are interested, I can post additional articles on these subjects.
The intent of this post is simply to explain why renting timeshares may not always be the most beneficial strategy. Owning a timeshare, despite many negatives, can provide you with the following benefits as opposed to renting:

  1. Owning can be less expensive than renting;
  2. Better availability for desirable weeks or resorts;
  3. Access to Interval International;
  4. Ability to do ongoing requests for weeks and specific resorts;
  5. Use of internal exchanges;
  6. Less than one week stays; and
  7. Discounts on hotel reservations.

Less Expensive

I am a big fan of renting timeshare weeks. There are some fantastic deals to be found. However, most of the cheap weeks tend to be in low season or low demand resorts. While there are diamonds in the rough to be found, many of the prime weeks (Christmas week, ski weeks, Hawaii weeks during the summer) are difficult to find for renting and even if available, they could cost $1,000-$2,000 for a week. While they may still a bargain compared to hotel rates, they can be expensive as compared to owning and exchanging your weeks/points.
If you own a timeshare, the basic idea is that you can exchange a week in a 2-bedroom unit for three weeks in a studio unit. This isn’t always true but I find that it is generally applicable. If you own with a points system or with a hybrid system (weeks/points), you could be able to exchange to a 2 bedroom to 4 or more weeks in a studio, depending on the system and the amount of points and your use of the points.
I use studio units as the point of reference since these are the closest to a hotel unit even though they are generally larger than hotel units and closer to “suites” found in hotels. As an example, one of my 2-bedroom units can be exchanged for 4+ weeks in a studio. If you are able to reserve prime weeks, it is definitely possible to get a tremendous amount of value for your one existing week.

Availability

One of the most important benefits to owning a timeshare is seeing available weeks. There are internal exchanges where you can see weeks offered by the same developer (Marriott, Hyatt, Hilton, etc.) and there are the external exchanges. Usually, weeks are offered internally first and then are offered to the external exchange companies (RCI and Internal International).
Both RCI and Interval International have separate inventories, one for renting and one for exchanging. It is not always the case, but exchanging tends to have better availability since you need to give up your week or points to exchange into something else so they tend to want to encourage the increase in inventory through exchanges.

Access to Interval International

As I mentioned in my article on renting, Interval International requires you to own a timeshare to get access. There are some loopholes to maintain access if you sell your timeshare but they are strict on verifying ownership before giving you access.
I personally prefer Interval International over RCI since Interval International is associated with many of the higher quality timeshares (Marriott, Vistana (formerly Starwood), Hyatt and Four Seasons). The ability to exchange into these timeshares can be very worthwhile since the nightly rental rates, even if offered through the exchange companies, are generally the ones that cost the most.

Ongoing Requests

As stated earlier, by owning a timeshare, you generally get access to inventory earlier than what is offered in the rental pool. Inventory changes by the minute and getting good weeks is difficult but generally, most if not all timeshare systems allow owners to put in ongoing search requests. Reservation windows differ per program but some programs allow you to request a specific week at a specific resort 2 years in advance.
For some people, planning for 2 years in advance is a difficult if not impossible task, but for others who know that they will be traveling for Christmas, Spring Break, Summer vacation, etc. it is not that cumbersome. Basically, by owning, I can put in a request, either internally or externally, for a specific week and resort and if and when it becomes available, it will be automatically reserved before anyone can even see it through any of these systems. Getting good weeks can be difficult but I have had great success as long as I planned early and put in a request.

Internal Exchanges

As briefly discussed, most timeshare systems allow internal exchanges. If you own a Hyatt, I can reserve other Hyatts through their internal system. The same is true with Marriott, Four Seasons, Hilton, Wyndham, etc. If you do not own, you do not get access to this inventory. Timeshare systems that are points systems or have point components can have very favorable exchange rates. Like hotel points, you can reserve nights using points at various different levels depending on the resort, season, demand, and unit size.
For example, Hyatt, has a category called Mountain time where you can reserve weeks for extremely small amount of Hyatt timeshare points (called Hyatt Residence Club Points). Granted that this is during very off season, but you can reserve almost 2 months in a five star Hyatt property in exchange for a 2 bedroom / one week ownership.

Less than one week stays

If you do not like to travel for less than 7 nights in one location, timeshares are probably not for you but the internal exchange programs and external exchange companies allow you to exchange your week / points for less than seven nights. Some allow exchanges for as little as one night while others have 2, 3, 4, or 7 night stays. Each system has its own rules for the length of stays available.

Discounts on hotel reservations

Most of the major timeshare systems give owners the ability to book hotel reservations with their branded hotel properties at various discounts. You generally need to sign on to the owner portal and you can search availability at their hotel counterparts and see various discounted rates. This varies in terms of the amount of the discount and can vary depending on the level of ownership but I believe that these discounts range somewhere between 10-40% off advertised nightly rates. The discount is not always offered for all resorts or all nights but when it is, I have seen some meaningful discounts.

Conclusion

Timeshare ownership is not for everyone! While I really enjoy our timeshares, I fully understand their limitations, issues, grievances, complaints and hatred towards them.
I personally think that the strong loathing of timeshares is due to the horrible sales system, the misinformation being told by the salespeople simply to make a sale, the tremendous differential in price when comparing developer purchases versus resale, the difficulty or complete inability to sell the timeshare when you want, the ongoing increase in maintenance fees and lack of desirable exchanges – Just to name a few of the many issues!
Despite these real issues, I believe that if you purchase a timeshare with a reputable company at a decent entry price, a lot of the above issues are lessened and it can be a great tool for traveling well. If you understand their limitations, ownership can actually make sense for certain people with certain vacation styles. I am sure that I left out many benefits and I know that I left out more of the negatives but the intent of this article was to address the benefits of owning as compared to renting.
Based on comments from previous posts, there are timeshare owners that are readers so I am interested to hear their thoughts. Make sure to share in the comments below.  Reach out if you have any questions and thanks again to Doctor of Credit for their continued support.

Note from Will: Big thanks again to The Time Share Guru for this series of posts. If you haven’t already, check out their site.



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Mike
Mike

My father-in-law has 4 weeks through RCI. He pays about $700 in maintenance fees per year for each week. He uses two of the weeks, and then rents the other two weeks. It’s a 2 bedroom condo on the beach in Fort Meyers, FL, so it always rents and he nets $1500 per week for it. He has RCI manage everything, so it’s no work at all for him, so his timeshare gets him two weeks of vacation lodging and ~$200 positive cash flow each year. I’m in the crowd that thinks timeshares are always a bad idea, but this is a real life example of a timeshare that works out OK.

billy diller
billy diller

Yep, it can work. It’s all in the entry point paid for those benefits. Some may have paid $50k+ up front for such an arrangement (obviously a ripoff,) while others may have entered the deal for nearly free by taking a resale off someone else’s hands (obviously a screaming deal.)

The Timeshare Guru

Mike,

Thanks for sharing. Timeshares can work out for a lot of people, depending on what you own, how you trade, you far in advance you can book, your flexibility and your vacation style.

Glad that your father-in-law is enjoying his.

TTG

DSP
DSP

How much did he buy it for? And how much could he sell it for? I think when you factor in that math you will quickly find that those 2 weeks per year are quite expensive.

El Guapo
El Guapo

This was our experience with a relatively high-end timeshare, Marriott Vacation Club International. We inherited one week of “red week” (in season) time at their Palm Desert, California resort at zero cost. We were in our 20s at the time, no kids yet. Palm Desert is mostly high end shopping and golf, neither of which appeal to us very much. So, we paid about 100/yr to join Interval International, the independent company that Marriott uses to let owners trade weeks across facilities. Marriott trades were thought to be the best, but there were other places available from lower-end companies like Westgate. Most of the years we owned the timeshare (about 7 years), we tried to trade it or “bank it” (roll it over for a year) to use elsewhere, but at every step of the process, there were more fees. 100 to bank it, 100 to get it back out and use it, 100 to trade it, oh and the usual 100/yr for the opportunity. All of that on top of about 900/year in timeshare fees to Marriott, and we were lucky not to be hit with any special assessments for repairs at the facility in Palm Desert. We barely got any use out of the thing, but we kept it up to date on fees. We got a letter in the seventh year stating that Marriott had bought a large number (hundreds) of units in our facility from banks who had foreclosed on the original owners due to non-payment of mortgages (the idea that people had taken out small mortgages to pay for a timeshare is amazing). This meant that we had the “opportunity” to buy another week at a bargain price. No thanks! In the seventh year, we finally received an offer to buy back our unit for about 5,000, but that was only possible because we were in good standing on fees and owned it outright. Otherwise, they would have preferred to see us go into foreclosure so they could buy it from the bank for pennies on the dollar. We sold it immediately and were grateful to get away from it. Of course, they will turn it around and sell it to some suckers for 15,000. Look at any timeshare market online and you will see hundreds of people selling theirs for nothing, as long as you take the deed and the responsibility for the fees.… Read more »

Jame B>
Jame B>

Most people I know that bought into timeshares later regretted the investment. There are exceptions like Mike mentions above, but those are exceptions rather than the rule.

The Timeshare Guru

El Guapo,

Thanks for your comment. There are fees, more fees, a few extra fees and then a couple more. I hate these fees.

However, even with these fees, it can still make sense if you know what they are. I hate these fees but I think that the resort fees are even worse.

Generally, the well known timeshares like Marriott Vacation Club are better but there are still a lot of Marriott weeks or resorts that do not make sense to own.

It sounds like you had a bad experience. I’m not surprised as this is common but hopefully with the information, tips and tricks that I am trying to disclose to others, your situation will be atypical. Thanks for sharing!

James B.
James B.

Most people I know that have invested in timeshares later regret the investment. The main regrets: fees, limited locations, availability for international exchanges, little increase in valuation, etc…….

There are a few exceptions, like Mike mentions above.

Chris
Chris

This. Well put.

My advice to 99.9% of people: DO NOT buy a timeshare.

Mimi
Mimi

Very true. The sales agent lie and will tell the potential buyers what they want to hear.

DH and I enjoy accepting timeshare invites where we get free nights and/or cash for our time. Travel club presentations have so far been the easiest for us and very profitable as well. There’s plenty of TS presentations in tourists areas all over the USA. For travel club presentations where we don’t get to check the resorts and they get to the point about telling us how we can get ‘cheap’ vacations, DH and I managed to stay quiet about our CC points/miles/cbs that will get us anywhere we want without having to pay huge membership and maintenance fees. At the end,we just mastered the art of saying “NO, this isn’t for us” and proceed to go to the gifting area. TS presentations are NOT for everyone especially those who have difficulty saying no.

We’re thankful there are buyers who pay for the gifts we get.

Shonuffharlem
Shonuffharlem

What is a travel club presentation?

The Timeshare Guru

Since timeshares have such an awful reputation, most developers now try to stay away from the term “timeshare”. They try to sell “vacation memberships”, “residence clubs”, “fractional ownerships’, ‘travel clubs’, and various other terms.

The mere mention of timeshares conjures up so many negatives that they are trying to change the terminology even though they are selling the same thing with different names.

Mimi
Mimi

The ones we’ve attented at Westgate Resorts offer memberships for outrageous amounts in order to get the ‘privilege’ to log in to a website where you’ll get the lowest price vacation packages. One time, they presented a vacation package to the Caribbean and DH searched bookitdotcom for the same package they were talking about and got it cheaper w/o paying the membership fees and if booked through a portal will give more savings…LOL Of course, I have trained DH to never ever disrupt their presentation and tell them stuff like this because our main objective is to get out of there soon as 90 minutes we signed up for, is up.

With travel club presentations, there is no need to check the resorts they’re trying to sell that’s why we prefer these since we get out of there faster.

Zbigniew the Timeshare Buster
Zbigniew the Timeshare Buster

It’s like being raped but getting a free breakfast first.

Eric
Eric

That’s a pretty sick and incorrect analogy.

El Guapo
El Guapo

I should mention that we did not get much use out of the trading system because all of the desirable facilities were totally booked up all the time. You could try to trade up to one full year before your planned trip, but people with more than one timeshare week had priority. So, even if you called in the first five minutes of eligibility, any of the even mildly desirable facilities were booked for the entire year between existing owners in that facility and the high-priority traders (some people own two or three -months- worth of timeshare weeks).

The Timeshare Guru

The Marriott Vacation System has been materially changed and is now a points based system. There are still legacy weeks but I’m not sure if you were under the older system. My view is that many desirable weeks are external trades actually occur outside in Interval where they generally do not have priority systems in place.

Credit
Credit

My father bought timeshare. The company went kaput and he lost money.

The Timeshare Guru

That is unfortunate. This happens but I think the chance of this occurring with the larger brands is very remote. I would generally stay away from smaller, independent timeshares as this can happen.

Judah Ross

Love the article. Like any system, you can get great value if you understand it and work it.

Most people would say credit cards are a scam but I’m sure everyone here would laugh at them.

I love learning about new loopholes to travel cheap, especially in untapped areas like timeshares. Keep the articles coming!

The Timeshare Guru

Judah,

Thanks for reading and the support. I really believe that timeshares are misunderstood and can be a great way to travel cheap. With Doctor of Credit’s continued support, additional articles will be forthcoming here and on my site!

Deb
Deb

Ok Judah caught my attention with this comment. I’m not going to rush out and get a timeshare, in fact I can’t imagine ever owning one, but the comment about most people and credit cards made me stop. It’s true. Tell someone you applied for 10+ cards this year and they are going to assume you are juggling a high debt balance when we know what is really going on. Maybe, this timeshare thing has something similar going on. So I’m going to try to read and learn. And try to be open to what Guru has to say. Not go by his word only, but give it a chance and perhaps investigate it myself once I better understand what he’s talking about. I am here to learn about opportunities. Whether or not that includes timeshares depends on what I learn and my own situation. I doubt it, but I’m willing to hear him out, just in case. Thanks Judah for putting it in perspective.

The Timeshare Guru

Deb,

Thanks for the comment. Judah’s comment did capture what I am trying to do. You definitely SHOULD NOT go out and buy a timeshare. They definitely have tons of issues but if you understand them, it is essentially a second world of points that is misunderstood. There are sweet spots, loop holes, tricks and tips and you can really get a tremendous amount of value out of a timeshare if you travel every year.

Like the credit card and points game, it can be complicated but I think we all started somewhere on learning how to maximize these systems so I hope that you try to learn with an open mind.

I do not compensated for anything so I am definitely not trying hawk any timeshares. I do not have any ulterior motive besides trying to expose a new avenue for cheap travel.

Zbignew the Timeshare Buster
Zbignew the Timeshare Buster

I’ve never heard anyone say credit cards are a scam. In fact, most people I know want to have at least one of them. Even the most fiscally conservative people I know, like my Depression born grandparents had one. They just were very careful about using it, using it only for necessities and paying it off in its entirety during the billing cycle. Only a nutter was say that cards are a scam.

Dan
Dan

Timeshares prey on people who want to feel as if they own vacation property, but can’t actually afford to do so. The sales tactics of timeshare brokers should tell you enough about the industry. The greatest mistake you can make is feeling as if your timeshare purchase is an “investment”, its not— its consumption. Stay away

The Timeshare Guru

Dan,

I 100% agree. A timeshare is not a financial investment. On my blog, I argue that the purchase price really should be considered as an enrollment fee or membership fee like a country club. You will almost certainly not get that money back but it does provide you access to the systems where, if informed and diligent, you can really maximize their use.

TTG

The Timeshare Guru

Also, take a look at this post: http://www.thetimeshareguru.com/blog/who-should-own-a-timeshare

I thought that this was very interesting in that most timeshare owners are actually affluent, smart and savvy consumers.

The general stereotype is that timeshare purchasers have gotten taken advantage of but many purchasers actually make informed and diligent purchase decisions. Definitely not all of them but the landscape is changing which is one reason that I am attempting to provide information and change these stereotypes and false information.

Dan
Dan

I appreciate what you are doing, don’t mean to say that timeshares are pointless, just that people should be careful not to misconstrue what they are (cause they are sometimes marketed as an investment). If your goal is to better inform people about timeshares and their purpose, I think that information is very much needed and many people could benefit

The Timeshare Guru

Thanks. I really think there is a need for transparency in this area. I hope that people can find this information helpful and potentially start changing their views on timeshares.

If there is more transparency, hopefully the industry will change where they won’t keep trying to fleece all purchasers into buying a “real estate investment” and other strictly false information.

Mimi
Mimi

In a lot of timeshare presentations we’ve attended, most agents have not yet come up with good answers to maintenance fees that they cannot guarantee will never go up.This has become our main point when they say it is deeded and can be passed on to our heirs. We tell them our heirs would refuse the responsibility of paying those high maintenance fees especially if they can’t go on vacation! IMO, maintenance fees that keep going up is the main reason why those who own TS are now dumping them.

tina
tina

Be VERY Wary. We bought a timeshare in Hawaii at what is now called Kaanapali Beach Club (old Embassy Suites) through the resale market so at the time we thought we had a great deal–1/3 of the cost of buying at the resort. Maintenance fees ~$400/year. Penciled out nicely. 8 years later they had hiked up costs to ~$1600/year. We also got tired of Maui after 4 years and found it was not so easy to trade for places we liked for on Interval International nor RCI unless you planned way ahead. So we started renting our timeshare. One year it was ok and we rented out fine; the other two years they didn’t rent until the last minute-and since we had a floating week we are talking Christmas prime time partial ocean view and still hard to rent out. We finally GAVE it away to the KBC people just to get from under it. Never again.

James B.
James B.

Tina, do you mind disclosing how much you purchased the timeshare for? How many weeks of timeshare per year?

I second your comment about trading places (especially international) and fees.

The Timeshare Guru

James, May be slightly off topic but here is a post I did on one of my Hyatt units and the economics of using the points. I’m not sure if I mentioned it in this post, but I paid approximately $6,000 for this week. This will inflate the numbers a bit but the additional cost per night for the upfront fee will continue to go down based on my years of use.

http://www.thetimeshareguru.com/blog/economic-analysis-an-overview-of-hyatt-ownership

There are probably various holes in the analysis but may be good to get a better grasp on the financial aspect of ownership.

henrythefourth

I’ve enjoyed all your guest posts and have been following your blog since DoC first featured you.

How are you getting 4 weeks from a 2Br? Are you splitting a lock-off, trading for a 2Br and re-depositing after locking that off for four week action?

I’ve got a 2Br that I always lock-off and deposit as 2 weeks with Interval, a 1Br and Studio. In the past I’ve always traded for a 2Br with both of those. I’ve always found this to be my best value but now with Interval upcharging when you trade into a larger suite.

The Timeshare Guru

Henrythefourth,

Thanks for the compliment. I really appreciate it.

I am able to get 4+ weeks from a 2 bedroom because one of my units is with Hyatt and they are on a hybrid system – meaning I can use my deeded week or I can convert to points. When I convert my week to points, because of the size and demand, I can exchange through Interval to get 4+ weeks in a studio during prime season or even about 7 weeks in low seasons. It is really advantageous.

It sounds like you have a deeded week where generally, the best you can do is trade it like you do with a 1 bedroom week and a studio since it is a lockoff. There is definitely some value to be had with this system but probably not as good as some point systems.

For the next post on Doctor of Credit, I am contemplating doing a similar post where I can break down the mechanics of some of systems so that you can get a better understanding of how they work and how you can get out sized value with some systems as opposed to others. If there is interest in that topic, please post below and hopefully DoC will continue its support.

TTG

scott
scott

Timeshares do work for some of us, I would dare to say even a lot of timeshare owners are happy with their purchase. Not all timeshares are created equal and the buyer needs to really understand what it is they are buying and the market. The sales people are not your friend and they will make minor difficult to use features sound amazing.

I bought my first timeshare 15 years ago, my second 8 years ago and my third almost 4 years ago. I new what I was buying and new going in what I wanted and what I wanted it for. Owning the 3 timeshares has caused me to travel more, take trips I would of never taken like a live aboard trip to Belize, and it hedges travel cost making them more predictable even though it may not be a investment. I am happy with my timeshare but every year they send me a survey asking if I would recommend it to a friend and I answer 7 out of 10 because it really depends on the person.

Rom
Rom

We did two time share presentations. One was very laid back and when we told them no they said next time. (Spg)
the other one -Hilton tried to sell it as a 401V ( retirement , investment , inheritance- vacation ) yeah sounded so odd ….no thank you!

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