Timeshare dilemma

[~bs]

dump it and take the loss. Sad to say, but because of the way the market is, and because of the actual timeshares themselves, some people can't even sell them for $1 to get out from under the financial obligation of the maintenance and other fees associated with owning a time share.

Timeshares are horrible "investments" in general. If you estimate a timeshare costs $20,000, and the room rate is $200/night. You're much better off simply renting a room in Hawaii or las vegas or florida or wherever 100x than buying the timeshare. And many times you can find room rates that are cheaper than that $200.

[disneysteve]

If the resort is selling it for $20,000, then shouldn't it be worth that? Isn't selling something for more than it's worth fraud?

Of course not. New car dealers do it every single day. Go to a dealership today and buy a brand new car. Drive it off the lot and try to resell it and see what happens. I'll bet you lose a minimum of $5,000 on that transaction.

Tahiti Village, 1 bedroom, Las Vegas

A quick search this morning turned up auction listings on ebay starting at $1.00. Buy It Now listings starting at $499.00. At the Timeshare User Group site, sales start at $600.00. At one other resale site, the cheapest was $900.00.

Now the good news is that I also searched for rentals and rentals start at $700/week. I'm pretty sure that is a few hundred dollars more than your annual fee. I don't know how successful folks are at finding renters but if you can rent it out, at least you can make a little money that you can then use to pay down the debt.

[disneysteve]

I realized I only looked at active auctions on ebay so I went back and looked at completed auctions. In the past week, there have been 4 successful auctions. The 4 units sold for $1.00, $102.50, $127.50, and $250.00.

This is a much better indication of what your unit is truly worth since it represents actual sale prices within the past 7 days.

So what should you do? I'd look into any possible option to refinance the debt. Do you own your home? If so, get a home equity loan. If not, maybe you can get a personal loan for a lower rate. In the meantime, try to rent out your week as I said before and use that money toward the debt. And just generally slash your spending to the bare minimum and throw every extra penny you can at this loan and just mark it up as "stupid tax".

[KTP]

I disagree with disneysteve, timeshares are the dumbest of the dumb investments out there.

Fees are in the range of $500 a year or so for a 1bd unit. Even if you get the timeshare free, this is still almost as much as you would pay for a week every other year ($1000) at a resort of your choosing.

There is a reason they sell for $1...and that is paying too much!

[disneysteve]

Fees are in the range of $500 a year or so for a 1bd unit. Even if you get the timeshare free, this is still almost as much as you would pay for a week every other year ($1000) at a resort of your choosing.

There is a reason they sell for $1...and that is paying too much!

It really depends. I just found one auction on ebay for Tahiti Village. The starting bid is $1. According to the listing, the annual fee is $192. If I can buy the week for $1 and pay under $200/year to stay there, that really isn't a bad deal at all. $200 for a week in Vegas? I would be okay with that.

[KTP]

It really depends. I just found one auction on ebay for Tahiti Village. The starting bid is $1. According to the listing, the annual fee is $192. If I can buy the week for $1 and pay under $200/year to stay there, that really isn't a bad deal at all. $200 for a week in Vegas? I would be okay with that.

re-read that ad. The unit you found is only useable once every 2 years. So you are paying $192 a year but can only use it once every 2 years. $400 for a week in Vegas, off strip, and for the rest of your life you have to go to this location or lose the money.

Also sometimes these timeshares will have special one-time fees when there is a big expense, like the whole complex needs a new sewer system or roof.

[disneysteve]

re-read that ad. The unit you found is only useable once every 2 years. So you are paying $192 a year but can only use it once every 2 years. $400 for a week in Vegas, off strip, and for the rest of your life you have to go to this location or lose the money.

Also sometimes these timeshares will have special one-time fees when there is a big expense, like the whole complex needs a new sewer system or roof.

True. My mistake. Yes, $400/week is not worth it to be locked in like that.

I have always advised against timeshares for all of the reasons we've said here. Especially with the internet now, you can almost always rent a week for less than the cost of owning. We've done that ourselves as I said earlier. So if you want to stay in a timeshare, don't buy. Rent instead.

And if you own, I hope you enjoy it because it isn't worth anything to anyone else.

One thing that we haven't mentioned yet is that if you are going to buy a timeshare for some reason despite all of the warnings, you need to pay cash. You shouldn't be financing anything at 17% and you should never finance luxury purchases. If you can't afford to pay for them, you can't afford to buy them.

[JoeP]

My two biggest gripes about timeshares is that they are difficult to sell, and that they demand ongoing payment. If someone has a steady income stream and enjoys "turn-key" convenience, then it probably makes sense.

We tend to think of liquidation ease, particularly in the case of job loss or major expenses. Timeshares can be very difficult to get out from under, as evidenced by the OP.

To this day I still harbor a small amount of residual anger at my wife who signed us up for a timeshare demo when we visited Vegas. The show tickets were hardly worth the 4 hours blown on high pressure, then soft sell with defeated puppy eyes, then sales manager pressure because we weren't interested, then waiting in line to get our tour deposit back, then being called (whispered) an a-hole by the intimidating and brash sales manager, then standing outside waiting for the courtesy bus to arrive ("it is running a little late, just stand there a few minutes more!"), and then walking 6 blocks back to our hotel.

[KTP]

My two biggest gripes about timeshares is that they are difficult to sell, and that they demand ongoing payment. If someone has a steady income stream and enjoys "turn-key" convenience, then it probably makes sense.

We tend to think of liquidation ease, particularly in the case of job loss or major expenses. Timeshares can be very difficult to get out from under, as evidenced by the OP.

To this day I still harbor a small amount of residual anger at my wife who signed us up for a timeshare demo when we visited Vegas. The show tickets were hardly worth the 4 hours blown on high pressure, then soft sell with defeated puppy eyes, then sales manager pressure because we weren't interested, then waiting in line to get our tour deposit back, then being called (whispered) an a-hole by the intimidating and brash sales manager, then standing outside waiting for the courtesy bus to arrive ("it is running a little late, just stand there a few minutes more!"), and then walking 6 blocks back to our hotel.

Exactly! My sage advice is to take the $20,000 you would spend on a timeshare and buy two tickets to whatever show pleases you in Vegas, take the other $19,800 and burn it in a campfire, enjoying the warmth, and relax by the fire knowing you are better off than the person who actually bought a timeshare.

[Like2Plan]

1. If I can only sell the timeshare for what others say I can, I have to pay that 17% interest anyway because I will still have the loan even without the timeshare

This assumes that you bring $$ to settlement when you transfer your membership. I do not believe you would be able to transfer ownership without the loan being satisfied.
I don't know your overall situation or whether you could afford the payments even if you had a lower interest rate. It would be easy to suggest a refinance to a lower interest rate--if somehow you could do that (Just to be clear, I am not suggesting you do that). I know there are folks who use those 0% interest rates and keep transferring to new offers as they pay down the balance (paying 3% balance transfer fee). But, this strategy could land you worse off than you already are--especially if you run out of 0% offers and you end up paying an even higher interest rate. There are some folks who get a second mortgage on their house for a timeshare. This strategy could land you even worse off. If you couldn't pay, you end up without a house AND bad credit.
That is why you might want to seek counsel with an attorney to see what your options are before you do something that will make things worse.

[disneysteve]

We have gone to 2 timeshare presentations. One was for the Disney Vacation Club. That was a lot of fun and very informative. The staff was excellent, low pressure, didn't insult us or try a hard sell. I was very upfront and explained how we usually do Disney and what we spend and that we were there purely for educational purposes. We did the whole thing, had a great time, got free sundaes at the end and each got a Disney gift card for coming. I would gladly do it over again anytime and would have no trouble recommending that others do the same if they want a fun break from their day at Disney.

The other one we did was for Marriott. I had heard and read that they also were professional and low pressure. That was NOT our experience. The agent we dealt with was a complete idiot. He made very stereotypical assumptions about my wife and I that were at least borderline offensive. Even after I corrected him more than once, he continued to repeat the same comments. Despite me telling him how we vacationed and what we typically spent, he insisted that we were basically being stupid for not seeing the benefit of buying into the Marriott timeshare system. I shot down everything he said, because none of it was true.

Being a loyal Silver Elite Marriott Rewards member, I was so upset with this experience that I fired off a nasty letter to the company and got a nice apology in return. So while I would happily send someone to Disney for a DVC tour, I would never send anyone to Marriott.

[Like2Plan]

... timeshares are the dumbest of the dumb investments out there.

I don't think I would call a timeshare an "investment"... These days, I'm thinking it's more like a liability that follows you even after you die!....

[KTP]

Even this is a better way to spend your money than on a timeshare:

http://news.yahoo.com/blogs/sideshow/carnival-life-savings-135411650.html?vp=1

I mean...hey at least you walk away with banana with dredlocks...

[disneysteve]

Even this is a better way to spend your money than on a timeshare:

http://news.yahoo.com/blogs/sideshow/carnival-life-savings-135411650.html?vp=1

I mean...hey at least you walk away with banana with dredlocks...

LOL. What an idiot. At what point in burning through $2,600 did it occur to him that maybe that wasn't such a great idea. Apparently it never crossed his mind that an Xbox Kinect only costs less than $300 (the amount he lost before going home to collect his "life savings").

Still, I'm sure there is some sleazy lawyer somewhere who will take this case for him.

I do think the carnival should have stopped him at some point, or at least called over a manager to talk to the guy. If they didn't, it would be like a bartender continuing to serve a visibly drunk guest.

[JoeP]

Even this is a better way to spend your money than on a timeshare:

http://news.yahoo.com/blogs/sideshow/carnival-life-savings-135411650.html?vp=1

I mean...hey at least you walk away with banana with dredlocks...

I'll wager $2600 that this isn't true:

“For once in my life I happened to become that sucker,” Gribbohm said.