How is buying a timeshare EVER a good idea?

[Nicolepa]

My only regret to buying DVC is that we didn't buy it on our honeymoon 7 years earlier. We have family is S. Florida so we will always go to Disney. My family loves Disney World. We only stay in Deluxe and we love having the dining plan. I love that Disney doesn't tie me into specific weeks like a lot of other timeshares. If you like to go to other travel desinations then DVC probably isn't for you.

For us it makes sense. We bought maybe 7 years ago and love it. We love being able to afford an upgraded room. If we had to shell out $3K for a room each time we'd never get a 1 bedroom, nor would we go as often. The extra room and kitchen are a sanity saver for us.

We sort of look at is as we prepay for our Disney vacations.

That being said, I have never looked at another time share that I'd even be remotely interested in buying into.

 

[jodifla]

I was looking into DVC points ( resale only!) and I just can't see why anyone would buy points vs. just renting them. In addition to the astronomical cost of buying them...you have to pay maintenance fees on them for life! I can just rent points and come out ahead!

Also looked at resale points at another timeshare...Bonnet Creek. 200K points get you roughly a week at the resort ( depending on the season). Maintenance fees are approx $125/month, taxes $225 annually. $1,725 a year for that week...plus the initial cost of buying the points. Again....I can just rent the points for cheaper.

So educate me....what am I missing? Why do people buy timeshares? I have several family members who have...and I just can't see how this is ever a good financial decision.

First of all, I hope you realize when you rent points that you have NO control over anything to do with your reservation. Your reservation may or may not be there when you get there. You have to totally trust the owner. And now to add the DDP, you also have to give the owner that money...you can't do it when you get there.

And likely no refunds, either. You book 11 months out, and find you can't go three months out? You are out all of your money most likely, unlike when you own.

So there's a great deal of risk involved when you rent instead of own.

And there are more good reasons to own a timeshare in a place you enjoy going. We bought DVC back when it sold for half of what it's going for now, and we could likely get more than what we paid for it.

Also, we bought back when we had 2 incomes. Now we have 1.5 incomes, and have cut back, but we STILL stay luxury accommodations when we go for just the cost of our dues. We have 206 points, and have figured out how to stretch them to suit us. We normally stay for about 10 days to 2 weeks a year, taking every third year or so off.

 

[kt_mom]

OK....see if I am getting this right

How many points do you use to stay for 7 nights?

Using the numbers from KT, the total cost of the points was $17,280.00 and you want to pay it off in 3 years @ 5% interest ($1,364.28 in interest over 3 years) for a total of $18,644.28 and then add $600 a year for maintenance, over 10 years, the total cost is $24,644 ($2464 a year). That does not sound too bad for 7 nights each year, but what happens if you ever want out or you get tired of Disney or something else? Putting up $24 K in advance is a lot of faith in a single destination. I sure hope you don't ever tire of MCO, as there is a lot of the country to see and enjoy

Our loan just started and we only owe $11,880 at the end of this month. We put $2000 down to DVC and have already paid $2000 on the home equity loan with another $1400 to go on it this month from the rental payment from our friends. I will be putting another $1500 on it in March when I get my bonus and probably another big chunk from our taxes. 3 years is the max my DH wants to be paying on this for. I think we will probably pay it off sooner. So I don't think we'll pay quite as much in interest charges as you are figuring.

We also own this for what was it like 45 or 50 years or something. If we ever quit going we can give it to our children. But we have an 8 year old, a 7 month old and plan to have another so we will be going for many years to come. I see the value for us.

 

[BCV2003]

Another point to mention is that DVC holds its value really well or at least it has up to this point. I purchased 7 years ago and could still sell my ownership for what I paid. You can't say that about many timeshares, if any.

I purchased DVC because I wanted to the best value for staying in a Deluxe resort and I haven't been disppointed. If I was happy staying in a value resort it would not have been as good of a deal.

A few months ago, I looked at a timeshare in Cocoa Beach. I was not interested in purchasing and they knew this upfront. They were really trying to use hard sell tactics but I didn't like the resort at all. The specific one they were trying to sell us was $20k. After we left there I looked online and I could have purchased that exact contract as a resale for about $5k. That's a 75% loss from the time you sign the papers!

DVC is known for holding its value or even increasing. My sister owned at Boardwalk and wanted to sell and rebuy at Animal Kingdom when it became available. She actually made money on the Boardwalk sale from when she had purchased it.

 

[2binak]

If you include the annual maintenance, which you should as this is the actual cost of each point:

$10=$10 per point !

How much was your buy in? What are the other annual/monthly fees?

$6 per point is possible:

Buy 160 point contract @ $83 per point = $13,280
$700 (current price) maintenance fees per year for 52 years = $36,400
Contract + 52 years of maintenance fees = $50,000
$50,000 divided by 52 years = $962 per year
$962 divided by 160 points = $6 per point

Maintenance fees will go up, but as they do, so will rental rates.

 

[Nebraska_Disney]

How many "points" do you use for a weeklong stay? Are all the weeks Saturday through Saturday like other timeshares or are they flexible.

 

[nunzia]

It is certainly not for everyone, or, even most people. It works well for us though. We own at VGC and the hotel rooms are expensive to stay in. If they had opened sooner I could have spent the fortune I spent to take 2 of our kids and family on buying points. Of course you can stay off site in a really nice place at DLR so if you are happy doing that then no, DVC at VGC is not for you. We started out buying a 25 point resale at OKW (cash, since sold at break even) to get in the system and be able to buy VGC at smaller than the 160 point buy in. We currently have 4 contracts totaling 225 points. It's really hard to figure value..if you rented a studio villa from Disney it would cost you $850 a night (before taxes) if you rent DVC points for an average of $10 a point you can get that room for maybe $170 a night depending on when you go..you can still beat that off site. It all depends on what you want. We became spoiled at the Grand in 2001 and it's the only place we stay..our big splurge. We can treat family and friends without worrying about cost. My years MF were $856...this year I will use my points for 16 nights. Sure..big outlay but so is a car that won't last nearly 50 years. We love having it and it makes financial sense to US but certainly not to everyone. We have small contracts so we can sell some if need be and also so we can will parts to children..very versatile..and if we ever find we don't need our points for a year we can rent to people like the OP who can cover our MF with extra to spare.
Another HUGE point is complete control over the reservation. I like knowing I have my reservation, getting in at 11 months with the exact dates I want and no worry that I'll arrive at the desk and not have my reservation.

 

[nunzia]

How many "points" do you use for a weeklong stay? Are all the weeks Saturday through Saturday like other timeshares or are they flexible.

no..very flexible...each room is assigned a nightly point value and it can be higher or lower depending on season. Also, weekends are more than weekdays..there is no 'week' with DVC..just however many nights you want to book..just like a regular hotel room.

 

[MrsPete]

So educate me....what am I missing? Why do people buy timeshares? I have several family members who have...and I just can't see how this is ever a good financial decision.

I don't think DVC is a good deal, but some other timeshares can be.

For starters, you have to buy on the re-sale market to make it a good deal. Re-sale timeshares tend to go for 80-90% OFF their original price, so instead of paying $25,000-30,000, you can get a timeshare for more like $2000-3000. Huge difference. So big a difference that I'd ask why anyone would EVER "buy new". It may take a while to luck up on the right deal, but they're out there.

Then you need to investigate all the products before you fall in love with any particular spot. When we learned about the Marriott two-bedroom lock-out units, we knew that was the best deal for us. For a fee of about $100 you can "split" your two-bedroom condo into two one-week stays in a one-bedroom condo. But here's the deal: If you choose a location that has only two-bedrooms, you get a two-bedroom ANYWAY for no additional cost.

Details you can't ignore: You must choose a condo that other people will want to rent; otherwise, you'll never be able to "trade it" for anything else. Unless you're retired, you must choose a floating week during high season. And -- this is my personal opinion -- you should choose a place close enough to drive to; you may not be able to afford airfare every year.

Don't let yourself be swayed emotionally while you're choosing. For example, we absolutely LOVED the Marriott Grande Dunes, and we liked the fact that it's an easy trade -- close to Disney, close to Universal, nice golf course included in the resort. But once we were away from the place, away from all the beautiful stuff and the sales techniques designed to make you want-want-want the place, we discussed it and agreed that 1) we don't golf, and it'd be foolish to pay for the golf course just because it's a good trade, 2) we did want to be on the ocean. We don't want the amusement parks (with expensive tickets) for every vacation, but we do want to be on the ocean. So although Grande Dunes is wonderful, it wasn't the right choice for us. For this reason, I'd say you should never buy on the first day you look.

Yes, the maintenance fees are an expense, and you have to pay them even if you can't use the condo every year . . . but if you're looking at $700-900 for two weeks in a two bedroom condo, that's not a bad price. Including the trade fees and the splitting fee, it's about $500/week for a two-bedroom condo in peak season.

I recommend that anyone who's interested in buying a timeshare read the book Timeshares For Dummies (I think that's the name). It's written by a woman who used to sell timeshares, and it's very informative. She's not trying to sell you anything, so you can trust what she says.

Finally, it seems to me that this is something for which you should never borrow. It's clearly a luxury item.

 

[bumbershoot]

How many "points" do you use for a weeklong stay? Are all the weeks Saturday through Saturday like other timeshares or are they flexible.

Very flexible.




I believe we own at Bay Lake for 50 years. OVERestimating, it was 17K. Overestimating maintenance fees, let's call it 550 per year for our 160 points.

So that's about $890 per year (averaging it out over the course of the 50 years) for all that 160 points per year can get us.

In '08 we spent several days at Disneyland HOtel on the concierge level (you can't use points for that anymore though) with our "incentive" points we got with purchase. In '09 we spent 4 or so days at the Grand Californian Hotel (can't be done anymore on points, can only stay in the Grand's villas on points, not the hotel) for *some* of our '09 points.

Saved/banked the rest of those into 2010, used the normal 2010 points, and took 100 points from '11, and with those points had a big vacation. 4 nights in a gorgeous and HUGE 2 bedroom villa at Old Key West and got to host 5 of my family members. 4 nights in a large 1 bedroom villa also at Old Key West. Then 4 more nights at AKL, at Jambo House, in a 1 bedroom villa.

All for part of the approx $790 from '09 (that wouldn't have even covered the hotel room at the Grand Cal, by the way, that we also did that year), the $790 from 2010, and more than half of the $790 from 2011.



We considered renting, but it seemed so scary. You have to put 100% faith and trust in a stranger that they will do everything correctly and honestly. If you chose wrong or if they make an honest mistake, you're out the money and your vacation is messed up. Not worth it to us!

Comparing costs...we started our vacation at CBR at a big discount, but it was still $280 for the two nights in the pirate room. The value of our full kitchens (we did use them) at the villas made the OKW rooms feel very inexpensive, and made the tiny cramped CBR rooms feel like they cost the earth.

 

[cvjw]

We rented points before we bought, but I was a nervous wreck about our reservation being cancelled by the owner without us knowing. We bought into DVC a year and a half ago and love it. We bought 4 contracts resale at 4 different resorts, and stay at Disney over 3 weeks per year. We stay in a combination of 1 and 2 bedroom villas to maximize our points. We share our love of Disney by bringing friends and family along with us. We only wish we had done it much earlier. When I add up the costs of all of our contracts plus yearly dues, our points cost us about $7 each. So for $4900 per year (695 points X $7), we get 3+ weeks per year at Disney is a large villa - that works for us!!

 

[burnsoc]

I've been a DVC owner for ten years. I've had a decade of great trips at deluxe resorts. If I wanted to sell my points today, I would get more money than I paid for them. So my acommodations would only have cost me maintenance fees. Even better is I can rent out my points if I want to for about twice my maintenance fees. I just rented some points and am using the money to stay at the HRH at Universal. You have to learn how the system works. Too many people who own timeshares don't like them because they've never learned how to get the most value out of their membership. I plan on buying several weeks with Marriott when we get closer to retirement.

 

[Nette]

I don't think DVC is a good deal, but some other timeshares can be.

For starters, you have to buy on the re-sale market to make it a good deal. Re-sale timeshares tend to go for 80-90% OFF their original price, so instead of paying $25,000-30,000, you can get a timeshare for more like $2000-3000. Huge difference. So big a difference that I'd ask why anyone would EVER "buy new". It may take a while to luck up on the right deal, but they're out there.

Then you need to investigate all the products before you fall in love with any particular spot. When we learned about the Marriott two-bedroom lock-out units, we knew that was the best deal for us. For a fee of about $100 you can "split" your two-bedroom condo into two one-week stays in a one-bedroom condo. But here's the deal: If you choose a location that has only two-bedrooms, you get a two-bedroom ANYWAY for no additional cost.

Details you can't ignore: You must choose a condo that other people will want to rent; otherwise, you'll never be able to "trade it" for anything else. Unless you're retired, you must choose a floating week during high season. And -- this is my personal opinion -- you should choose a place close enough to drive to; you may not be able to afford airfare every year.

Don't let yourself be swayed emotionally while you're choosing. For example, we absolutely LOVED the Marriott Grande Dunes, and we liked the fact that it's an easy trade -- close to Disney, close to Universal, nice golf course included in the resort. But once we were away from the place, away from all the beautiful stuff and the sales techniques designed to make you want-want-want the place, we discussed it and agreed that 1) we don't golf, and it'd be foolish to pay for the golf course just because it's a good trade, 2) we did want to be on the ocean. We don't want the amusement parks (with expensive tickets) for every vacation, but we do want to be on the ocean. So although Grande Dunes is wonderful, it wasn't the right choice for us. For this reason, I'd say you should never buy on the first day you look.

Yes, the maintenance fees are an expense, and you have to pay them even if you can't use the condo every year . . . but if you're looking at $700-900 for two weeks in a two bedroom condo, that's not a bad price. Including the trade fees and the splitting fee, it's about $500/week for a two-bedroom condo in peak season.

I recommend that anyone who's interested in buying a timeshare read the book Timeshares For Dummies (I think that's the name). It's written by a woman who used to sell timeshares, and it's very informative. She's not trying to sell you anything, so you can trust what she says.

Finally, it seems to me that this is something for which you should never borrow. It's clearly a luxury item.

The thing with DVC contracts is, that even during a resale DVC retains the "Right of First Refusal" (ROFR). What that means is, that if a buyer makes an offer on a contract, then DVC gets to review it, and if they feel it is a good deal they buy the contract at that rate. That's a win win for the seller... their contract sells either way. However, for the buyer, you have to offer high enough to keep DVC from snagging the contract. That keeps resale point values up.

 

[eliza61]

I was looking into DVC points ( resale only!) and I just can't see why anyone would buy points vs. just renting them. In addition to the astronomical cost of buying them...you have to pay maintenance fees on them for life! I can just rent points and come out ahead!

Also looked at resale points at another timeshare...Bonnet Creek. 200K points get you roughly a week at the resort ( depending on the season). Maintenance fees are approx $125/month, taxes $225 annually. $1,725 a year for that week...plus the initial cost of buying the points. Again....I can just rent the points for cheaper.

So educate me....what am I missing? Why do people buy timeshares? I have several family members who have...and I just can't see how this is ever a good financial decision.

The same way buying a luxury car is ever a good idea or paying $1800 for a louie Vutton pocketbook is ever a good idea.

All of which I recently did.

DVC's was a good idea for me because I routinely spend 4000 dollars on my disney vacation. So after my fourth trip I had paid for my time share. and please don't use the if I had put it in the bank and invested it I would have gotten millions of dollars on it. I would not have put it in the bank because the money I set aside for vacation is used and spent .

I brought into dvc before they had all the discounts that are now popular. I have no interest staying in a moderate or value. been there, hated it.

my dues are 800 bucks a year. So I'm not sure if I can spend 10 days at the BCV's for 10 nights for 800 bucks, I haven't checked the rates lately. but even if I could find some one to rent them at 10 a point that still puts me in the 1000 dollars a night category.

So I'm a bit confused about your question. Are time shares good investments? No. but most luxury items are not. I will have my dvc probably a lot longer than I will have my LV bag but that's another story.

Are they a good idea? For me they were an excellent purchase. We own two disney and Marriott.

 

[rnorwo1]

We bought DVC after 2 years of research. We looked into several different "time share" options and agreed with you that most aren't worth it. DVC did seem to be worth it for us for several reasons:

1) We're limited to travelling at holidays or late May because of school... I'm not taking my kids out of school unnecessarily and I don't want to go in the dead of summer. So usually discounts are not that great (if there are any at all) when we can go.
2) We have 3 kids, so when the baby turns 3 we will have to have to have 2 rooms or a 2 bdr, or one of the special rooms (POR maybe?) that will fit 5, so that's expensive.
3) We only want to stay in deluxe resorts. If we had to, value would be fine, but we spend alot of time at the resorts and therefore the nicer rooms/resorts are preferable.
4) We travel to Disney at least once a year
5) The resort prices go up each year,so this was an "investment" against inflation (dues can go up but not nearly as much as room rates, I don't think they've gone up at all since we've had ours.)

We live a relatively frugal life so we can vacation frequently... we do at least one disney trip a year and we take at least one other vacation somewhere else (last year we did Hilton Head, England, and Germany... we live to travel!) I want nice vacations, but I also try to get the best prices for those nice vacations, so DVC was definitely the way to go for these reasons above. We bought resale, paid cash, and did two small contracts at SSR, so our dues are only $498 a year... according to my calculations we will have come out even with our purchase price in 7 trips (have already taken 3) and then we get 7-10 days worth of deluxe accommodations for less than $500/year. One day we may not be visiting disney so often (I doubt it, but who knows), and if that day comes we'll just sell and we should be able to get quite a bit of the up-front cost back if not all... Disney keeps the right to buy-back contracts first (ROFR), so they will not let resales go for incredibly low prices, which keeps the resale value relatively high. For us this is a really good deal.

It will not be a good deal for anyone who would not go to Disney regularly anyway (at least every other year) or who do not want to stay moderate or deluxe. I also would never have bought it if we had to finance b/c then you'll need to add interest to your calculations, but it could probably still be a value... just do the calculations for yourself. Compare what you normally spend to this and see how it comes out. For us, it was definitely a savings.

 

[eliza61]

people also for some reason think folks who purchase timeshares are some what "stupid" for buying them, which amazes me.

When my dh brought a boat, I was surprised at howmany people said how great and "investment" that stupid thing would be.

Well let me tell you, if you think time shares have high maintence fees, don't even think about boating.

shall I start with insurance fees? or how about slip fees? then god help you if the thing breaks or the nice tab you can get from the coast guard if they have to render assistance. lol.

We couldn't sell that thing fast enough, yet every one assured us how "boating" in the long run would save us vacation money. we got all kinds of kudos for that whopper. yet tell those same people you're buying a time share and you get these looks ....

 

[kirstenb1]

We bought 200 pts at OKW back in 1993, for I think, right around 11k.

We got park passes free for 7 yrs. DH ran the numbers, and calculated that year 7, it would begin to pay off (he didn't factor in the passes, since that wasn't a permanent incentive).

Would we buy again, right now? I don't know. There wasn't all the info out that the internet gives you now, lots of deals out there for rentals in Windsor Hills. The park passes were a crazy great incentive, which obviously doesn't exist now.

I'm glad we bought, and enjoy our dvc. However, nowadays, I would probably rent offsite. We've gotten spoiled, and I know I NEED a kitchen and washer/dryer.

 

[doubletrouble_vb]

The short explanation is if you pay for deluxe accomodations in Disney parks DVC can easily be a value for you. I sold my DVC at a profit (...more than I paid for it). While I had it I manipulated the heck out of it (avoiding weekends, doing studios, the occasional rental) so I came out quite nicely.

Presumably one would purchase other timeshares using the same reasoning. I do own a Westgate but the reasoning I used back then (1994) wouldn't apply now. I feel I got my monies worth out of it mainly because I bought it so long ago.

 

[hsmamato2]

$6 per point is possible:

Buy 160 point contract @ $83 per point = $13,280
$700 (current price) maintenance fees per year for 52 years = $36,400
Contract + 52 years of maintenance fees = $50,000
$50,000 divided by 52 years = $962 per year
$962 divided by 160 points = $6 per point

Maintenance fees will go up, but as they do, so will rental rates.

what? that is some interesting math....
the buy in price is still the buy in price. dues are still dues. Now,at the end of of 50 years, it would make sense to look back,divide all the time you spent on actual vacation using your points,from the cost of upfront cost,fees,etc-etc.
any other way is just sort of ...wishful. And I love DVC ... the only true way to look at DVC is,it's a luxury item,not a big discount on Disney.
Now,some other timeshare programs, bought secondhand,can be used wisely and are a good deal,but that's the problem with the others,once you buy in-they're worth so little......
DVC does hold a good value for resale,this I know for sure!

 

[snowywhite89]

No, you must have missed it when reading my post, but $6/point includes my buy in and my maintenance. It says that right in the bit you quoted.

$6 is the total annual cost of each point.

You are wrong. You are not including the future cost of the original buy in. That original investment of $20K would be worth $200K in 30 years. So you need to include the $180K in your calculation.