How is buying a timeshare EVER a good idea?

[Tiger926]

Well, if none of us bought any timeshares, you would have no points to rent.

Tiger

 

[hsmamato2]

oh- with what I already posted I have to say,my Mom's DVC worked well for her, but it was the timing,I think... she bought in when OKW was brand new....got 7 years of free park admission invited LOTS of family down yearly to have some fun together-had 20 years of memories and fun....when she sold last year (no choice) she received almost double what her original cost was (not counting the dues paid over the years)
so she lost nothing,and gained memories.....(not that I could afford to do it now,but the timing was great for her)
those deals are long gone....

 

[hsmamato2]

Well, if none of us bought any timeshares, you would have no points to rent.

Tiger

so true

 

[ssawka]

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.

It's a lot like buying versus renting a home. You can probably pay less to rent a home than to buy (especially in this economy) and not have to worry about maintaining them, but after you've paid all that money in rent every month, what do you have to show for it? Nothing! Sure, you've had a roof over your head, but after that, you don't have a resellable asset.

This is just like DVC. Yes its a large upfront cost and you have to pay maintenance fees, but you can use your contract for 10 years and then recoup most of, if not more than, your initial investment.

Also, risk aside, today you may be renting points at $10 per point, but do you think you'll still be renting them at $10 per point 10 years from now? Timeshares are about long-term investment not for the traveler that wants to go over the next few years.

 

[rnorwo1]

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.

That only applies if you would have taken that initial investment and invested it. Our vacation budget, which our purchase price came out of, is always going to be used on vacations, so the investment earnings argument would not work for us. This only works for people who would be diverting retirement or investment funds to buy it. I am truly not trying to be "cheeky" here, but do you look at the cost of your groceries in terms of what you could have earned on that money in 30 years(I would be devastated if we did, the cost of food these days breaks my heart!)? Of course vacations are not a necessity like groceries, but if you are going to pay for vacations regardless, then why would you look at the investment potential if that money was never earmarked for investments? My previous post outlined why it was a good deal for us... we get nicer rooms for much, much less money, but it's not going to be a value for everyone, because it depends on their vacationing habits. No other timeshare worked for us, for instance.

 

[MrsPete]

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.

yeah, that's another reason I am not enamored with DVC. The initial investment is always going to be so high that the value just isn't there.

 

[MrsPete]

The short explanation is if you pay for deluxe accomodations in Disney parks DVC o.

I personally would not choose to spend on deluxe accommodations at Disney. I don't want to spend $$$ on an expensive room and then spend all day in the parks (with expensive tickets). On the other hand, I don't mind spending on $$$ spaces when we're planning on spending time in the condo.

This may not be in line with everyone's idea of the right way to vacation, but I also doubt I'm alone.

 

[honeydiane1953]

Buying timeshares is a luxury not an investment though they try and convince you otherwise.

 

[rnorwo1]

I personally would not choose to spend on deluxe accommodations at Disney. I don't want to spend $$$ on an expensive room and then spend all day in the parks (with expensive tickets). On the other hand, I don't mind spending on $$$ spaces when we're planning on spending time in the condo.

This may not be in line with everyone's idea of the right way to vacation, but I also doubt I'm alone.

There's no "right way" to vacation, whatever makes your family happy is the right way. I want nice, big rooms with kitchens for disney and beach vacations, other vacations we're much more flexible. No one should try to convince others of the value of a vacation or vacation style, it is so relative.

 

[Judique]

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.

It's a decision based on what the particular individuals situation is.

I've owned for almost 11 years and it was an excellent decision for me for those years as it was a luxury that I could afford that fit my lifestyle.

My lifestyle is changing somewhat and now I have less need for all these points so I am at the time where I can consider selling some. Not all - I still love to go but not as much as I did when the kiddos were younger.

And - prices have held up! I could sell and take my original cash outlay and go in a different direction, or - I could rent to people like you and pocket the profit after I cover my dues - about half the $10 rental would go for my dues.

I don't think timeshares are for everyone. The traditional ones were not for me. DVC points were somehow easier to manage then the 'week' thing.

The one thing to remember is that this is not an investment. It is just like buying any other consumable product. You don't buy it to watch it grow - you buy it to use it. If you can't can't afford it - don't buy it. Rent someone else's points and pay a small premium for basically the same advantage.

 

[bumbershoot]

That only applies if you would have taken that initial investment and invested it. Our vacation budget, which our purchase price came out of, is always going to be used on vacations, so the investment earnings argument would not work for us. This only works for people who would be diverting retirement or investment funds to buy it. I am truly not trying to be "cheeky" here, but do you look at the cost of your groceries in terms of what you could have earned on that money in 30 years(I would be devastated if we did, the cost of food these days breaks my heart!)? Of course vacations are not a necessity like groceries, but if you are going to pay for vacations regardless, then why would you look at the investment potential if that money was never earmarked for investments?

I totally agree.

It's a lot like buying versus renting a home. You can probably pay less to rent a home than to buy (especially in this economy) and not have to worry about maintaining them, but after you've paid all that money in rent every month, what do you have to show for it? Nothing! Sure, you've had a roof over your head, but after that, you don't have a resellable asset.

Now, see, I feel that having a nice roof over my head (nicer than I could buy) and built-in free maintenance is worth quite a lot! At the "end" you have what you had during your rental period. And that's valuable.

As for houses with mortgages, or even paid-off houses, being resellable assets, well...I have a MIL with two houses gone (one entirely owned then FIL put two mortgages on it then lost it b/c of business debts, one with a mortgage that wasn't being paid by the person who shold have been paying on it), I have a father with two houses that nearly lost BOTH, etc etc etc...

And even with all of that, you could have a fully paid-for house with a bank account providing enough interest for upkeep, and another account that pays for others to maintain your home, and all you need is for your city/state to decide a road/highway needs to go right where your house is, and boom, gone.

Renting a home is quite valuable to me. Obviously.

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.

That's a separate issue.

If you want to see what DVC gives you, you don't have to include that calculation at all.

If you want to COMPARE it to what DVC would give you, then you can do that. Of course, you can't have used any of that money for vacations....

 

[disneyfan2kids]

It's not for everyone...but since you asked, here are my reasons why it IS for my family!
1.) I go to WDW when I want, stay where I want, control everything about my reservation, and save LOADS of money with my in-room kitchen!
2.) I plan my trips to get 2 - 3 vacations out of 1 single set of annual passes.
3.) I get approx. a $400 savings (4 ppl) on my annual passes as a result of DVC and thus pay about $25 per person per day for my WDW tickets! Most other people pay for 1 weeks tickets what I pay for 3 trips worth of tickets. I can only visit this often BECAUSE of DVC.
4.) The initial outlay of $$ hurts only for the short moment...the YEARS of memories I've gotten make that the best money I've ever spent.

My 2 cents!

 

[pearlieq]

what? that is some interesting math....

Aside from the fact that the poster used today's dollars to calculate maintenance over the whole contract, therefore letting the final number be unadjusted for inflation, the math is pretty straightforward.

(Total Cost of Contract / Total Points Over Life of Contract) + Maintenance Fees Per Point = Total Cost of Each Point (in the year calculated)

As they pointed out, the maintenance fees will rise, but so will rental rates and CRO rates.

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.

Why would I? The money I allocate for investments is completely separate from the money I allocate for leisure. Do you think we weren't going to WDW before we bought DVC?

Technically you could calculate an "opportunity cost" on everything, down to the sandwich you had for lunch today. But given that the money was going to WDW either way, this is a more efficient way for me to allocate it.

I personally would not choose to spend on deluxe accommodations at Disney. I don't want to spend $$$ on an expensive room and then spend all day in the parks (with expensive tickets).

That's an excellent point. DVC is not generally a good fit for the "I only use the room to sleep and shower" set.

We buy annuals, so while we do go to the parks for a while most days, they're not the total focus of our vacation. We've learned to enjoy WDW as a resort. I spend plenty of time lolling around our room, enjoying the balcony, etc.

 

[disneyfan2kids]

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.

This mentality always blows my mind... If I pay $50 for a new sweater (that will last me 5 years lets say) I don't NOT buy it because the "real" cost of that sweater is actually $62 when you take into account inflation.

It's just not how I decide if something is "worth it" to me. The price is the price is the price.

 

[quentina]

I guess it is a personal choice. In this family, we think it is the best thing we ever did. My maintance fees are $1800 per year however; last year, we did a 4 night cruise, 4 nights at Disney (Animal kingdom) and 6 nights at Hilton Head. Paying cash for these items would be way more than the 1800 I pay in dues.

I love my DVC! It has given us opportunities we would never have if we didn't own it. This year we are doing 6 nights at HHI x 2 as we invited friends. Paying cash for our cruise on the dream and spending 3 nights at AKV. I could have used some points for the cruise but, we chose to invite friends with us instead.

I may do another add on while on that cruise.....we'll see!

 

[disneyfan2kids]

For arguments sake - I'll dissect my actual (albeit "estimated") spend:

DVC Buy In $12,000
Maintenance fees $2800
Annual Passes $5200
Total outlay = $20,000

Total # of trips taken= 9
Cost per trip = $2222 per trip

Which includes deluxe room/park tickets.

I've owned for 6 years. For each future year my total cost per trip will decrease because the initial 12K is spread out even thinner.

This is simplistic.. I know... but still pretty cheap for a deluxe vacation!

 

[ToddyLu]

DH and I both have full time jobs. He does not fish, hunt or boat. I scrapbook a little and do some shopping but not alot IMO. But we do work alot. We go to Disney for 10 days every year and we DO NOT have children.

We stayed in Values for 7 of our 8 yearly trips before buying DVC. My MIL sponsored our one trip in a Moderate at POFQ. So 2006 trip was a freebie so to speak. Every year...10 days...AllStars...Pop Century....lugging ice back to the room when we could find a machine that had some...walking a mile to the bus stop from the gate...standing in the sun waiting on a bus...trucking down, paying for laundry and waiting on the washer/dryer. All these things can get old when this is the place you visit every year. In our 40s dangit we just wanted more.

We purchased 210 points for $93 at point at AKV in June 2009. So far we have had studios (2 each trip since my MIL stays in hers for free) WITH SAVANNA view to the tune of about $14000 when paying cash. We financed for 10 years with Disney at 10.75%, the perferred rate. Our monthly mortgage is $237 and monthly MFs are $80. I tell folks this becasue it is hard to get this sort of info when you are initially looking at DVC and do not want to talk to a guide.

If others have read some of my posts recently I apologize for again rationalizing our purchase. In high school I drove 2 Chevettes. In college my Dad helped me buy a Nissan Sentra. I married DH and I got a Jeep Cherokee (3 times). Then in 2005 DH wanted a Hummer H3. After Being a local fireman during Katrina, the man deserved it. We got one. In 2008 we got a second one.

Why DVC you ask? It changes your trip to Disney like a Hummer changes your drive to work. Put simply, we deserve the luxury and do not mind paying for it.

 

[DawnM]

Were the maintenance fees $2,800 for all 9 trips? Are these one week trips? So, only $311 per week?

Dawn

For arguments sake - I'll dissect my actual (albeit "estimated") spend:

DVC Buy In $12,000
Maintenance fees $2800
Annual Passes $5200
Total outlay = $20,000

Total # of trips taken= 9
Cost per trip = $2222 per trip

Which includes deluxe room/park tickets.

I've owned for 6 years. For each future year my total cost per trip will decrease because the initial 12K is spread out even thinner.

This is simplistic.. I know... but still pretty cheap for a deluxe vacation!

 

[eliza61]

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.

Thats a bogus argument. do you include the money you outlay in vacations in your investment portfolio?
with that argument I need to include the money I spend on the movies in future outlay.

The reason they call it "disposable" income is because you plan on disposing of it.

Your 2K you spend at wdw would also be worth considerable more if you invested it, so at that rate, you're also "wasting" money

 

[eliza61]

I personally would not choose to spend on deluxe accommodations at Disney. I don't want to spend $$$ on an expensive room and then spend all day in the parks (with expensive tickets). On the other hand, I don't mind spending on $$$ spaces when we're planning on spending time in the condo.

This may not be in line with everyone's idea of the right way to vacation, but I also doubt I'm alone.

of course you're not alone. just like I would not waste money on a value that was going to be cramped and uncomfortable. for me that would be a collosal waste of money. and as the deluxes are always full up, we're not alone either.

I think that is what makes disney such a great place it caters to every ones comfort level.

Money is a tool, that simple. It has no value until you subscribe it to some thing. what floats my boat would have no value to others and therefore be a waste of money.

I'll pay ridiculous amounts of money on designer pocketbooks but for some reason the thought of paying more than 20 bucks for a pair of jeans sends me through the roof. go figure. A good friend of mine drops 125 bucks a week on fancy coffee. In my head thats 500 bucks a month. why? but it brings her great joy so who am I to say it's a waste.