|Your Location: Timeshare Users Group Advice: Timesharing Revisited |updated: 2/22/08|
Timesharing Revisited: Their Time Has Come by Will Howard
Despite an infamous past reputation, timesharing is the nation's fastest growing vacation industry. With giants such as Marriott, Disney and Hilton having entered the market, timeshares have taken on a new respect. Mention the subject to any of the four million time share owners around today, and you will likely get an enthusiastic description of wondrous vacations at expensive resorts for bargain prices. Realtors selling timeshare resales will tell you of the bargains from those who could not afford the dream.
A timeshare is a unit of time (usually a designated week) in a condominium-style facility at a resort, which may be purchased for an infinite or limited period of time. Timeshares are basically one of two types; either (1) fee simple - a deeded property which can be left in a will to your heirs; or (2) a vacation membership with a "right to use" which has a limited term.
Most states have adopted strict regulations protecting consumers from fraud and other past abuses in the industry, but high pressure marketing techniques still exist from many developers.
Those considering buying a time share - by accepting a free weekend of travel or gift for a 90 minute developers presentation should be careful not to jump at the first offer made by high pressure salespersons.
A weekend at a Virginia Timeshare resort just outside Harrisonburg, Virginia revealed the typical marketing strategy for timeshare ownership. After my 10-year old deposited my name in a box at Fuddrucker's, I received a telemarketer's call hawking a free weekend with lift tickets, two nights lodging, and $25 in travel expenses in exchange for a 90-minute tour of its facilities. I took the bait. My wife, Dorothy, who would rather endure a root canal then attend a timeshare presentation, grudgingly agreed to come along.
After a terrific March weekend experience, my wife and I were met by tour guide "Spike," as he introduced himself, who drove us around the property in his nicotine-tainted sedan. Spike told us how the resort had spent $300 on us to have the opportunity to see his client's property and its amenities. As "box referrals," he told us that the only way we would be able to return to stay at the resort, would be to buy a timeshare, for the reason that our hotel was exclusively reserved for tours or timeshare owners. He told us individual golf lessons from the pro were $5 per hour for timeshare owners, and how we could rent a horse and wander the hills without a guide. It was very tempting.
As it turned out, our charming host had a bit of a problem with the facts. When I checked his statements, they did not agree. The hotel gave me a rate sheet, and was delighted to take a reservation. Individual golf lessons were $45 per hour, or $10 for groups for 45 minutes - whether or not you had a timeshare - and horses could only be taken out in groups with a guide.
After a final sales presentation in a room crowded with other couples sitting at small tables, Spike passed us on to "Mo," who also gave us information which was incorrect. He pressed us to sign a purchase agreement for a $14,000 sale. That's $403 a month for four years. No thanks.
A later check with several timeshare real estate brokers via the internet disclosed that the same week available for $3,000 from Timeshare Travel of Salt Lake City, one of the largest timeshare owners services in the world. At any one time, they have 9,000 timeshare resales listed for sale. Another broker had one for $4,500
"Ninety-nine per-cent of our listings are distress sales," said Betty McKay, a licensed Realtor with Timeshare Travel, who has been selling timeshares for 13 years, "sometimes you can pick up a good timeshare for as little as $1,000."
McKay, a retired school teacher, owns 13 timeshare weeks herself, and spends six weeks each year in Hawaii. "It's the only way to travel these days," she said, "Marriott hasn't built a hotel in 5 years, because they have seen the trend and are now a major developer of timeshares."
Timeshare Users Group, a non-profit association of timeshare owners, provides members with a variety of information to make educated decisions before buying or exchanging a timeshare.
"You can save a lot of money by shopping on the secondary market," said Bill Rogers, founder of Timeshare Users Group. "There are a lot of commissions and high fees packed into the developer's prices." Membership in the organization is $15 for a year, and is open to anyone who would like join. They may be reached via the internet at www.timeshare-users-group.com, or by calling 904-264-3512.
Timeshares provides a much more practical alternative to a vacation home for the person who has only a few weeks to enjoy time off. While vacation homes cost several thousand dollars a year in maintenance, insurance and taxes, the same annual costs for a timeshare are only about $300 per week of ownership.
The concept of Timeshares came from Europe in the 1960s, and the first American program began in 1969, according to Mario Collura, President of TRI West, a leader in timeshare resales and rentals. By 1995, there were 4,000 resorts in the U. S. with over four million members.
"People are really just catching on," said Collura, who said that with baby-boomers entering "the market is exploding." The average age of timeshare purchasers is 50, according to him.
Collura, who spends the holidays each year in Hawaii with one
of his four timeshares, publishes a web site
(www.triwest-timeshare.com.) which includes a "blue book," listing the
resale value of 2,000 resorts internationally, and other information
helpful to neophytes as well as to seasoned timeshare traders.
This chart shows the explosive growth that took place in the USA from 1975 to 1985, and worldwide from 1985 to 1995, according to sales data from the American Resort Development Association:
Timeshares purchased carefully on the resale market can save a lot of money. In February, I took my wife and children to Ft. Lauderdale. The Doubletree, directly across the street from the beach, cost $159 per night, plus hotel tax of $17.49, or $1,235 for the week for one room - $2470 with kids in a separate room. A deeded, fee-simple, one-bedroom, prime week, ocean-view timeshare at the Driftwood Resort, directly on the Atlantic Ocean in Vero Beach, recently sold for $1050. Other than the annual maintenance, this is the total cost of your timeshare for a week a year for as many years as you want.
This typical timeshare unit with full kitchen, living room with queen size sleep sofa, deck, and separate bedroom, was in default of several year's maintenance payments according to Jeanne L. Radlet, general manager of The Driftwood Resort. This unit, and several other efficiency units, were sold directly by the resort, without real estate commission or settlement costs. After the initial purchase price, the only expense at the timeshare would be the $291 annual maintenance fee, or $41.57 a night.
If you got tired of going to the Driftwood, and decided to trade your week for let's say, a week during prime season at a timeshare in Ft. Lauderdale (or anywhere else), you would have to add the annual expense of subscribing to an exchange organization such as RCI (Resort Condominium International). This is an organization which provides timeshare owners the opportunity to exchange their weeks in a pool of 3500 resorts with two million other members. RCI membership is $74.50 per year, and the exchange fee is $103 per week traded. Adding the maintenance of $291, your exchanged week would now cost you only $468.50, or $66 per night. Timeshares usually have as much, or more amenities with much more living space than a hotel room at a resort. You can even request a two bedroom unit for the exchange.
Exchanging your timeshare is not automatic, and can be a little tricky. The more desirable the resort and time of year the timeshare you have to trade, the better choice you have. If you make your plans very early, or within 45 days, success is a lot more likely. RCI also sells "instant escapes" at even cheaper prices to its members on 10 days notice without requiring an exchange. Bargains include 7 nights at resorts where they have surplus weeks for, $149 including a two-bedroom, 1100 square foot unit at the 256-acre Powhaten Plantation in Williamsburg. Rack rate for the same unit in April listed at $840, plus $54.60 occupancy tax.
Timeshares are valued by the time of year or week of use. "Red" time is generally the highest in demand, such as winter for a ski-resort, "white" for shoulder time and "blue" is the least desirable, that is the most difficult to trade. While most developers follow this color guide, there are some confusing variations. Cliff's Club Resort in Kauai uses flower names to denote times, such as Orchid as the best time and Protea for the least desirable rainy season - tricky for those not botanically inclined!
Using a licensed Realtor, purchasing a title insurance policy
and closing through a third party escrow agent is the best way of
protecting yourself against most of the pitfalls in the industry.
Leonard Williams, a retired lawyer admitted to practice before the Supreme Court, said timeshares provide a magnificent way of traveling for retired persons or those who are self-employed.
Williams bought eight weeks of timeshare over the years on the resale market and has traveled throughout the United States, and internationally, with his wife. He has given timeshares to each of his four children.
"Timeshares are not for everyone," said Leonard. " If you can
be flexible with your travel plans, they can provide a marvelous
opportunity to see the world."
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