Timeshare dilemma

[disneysteve]

Why would anyone rent a unit for less than what it costs them in yearly fees?

I think what the OP is not understanding is that there are essentially two markets for timeshare unit consumption. The first is the timeshare company selling units to people like the OP who want the benefits of ownership. The second is the rental market for timeshare units, owned by buyers or the timeshare company itself, that for some reason would otherwise go unused.

JoeP is spot on here. Skyauction rents unused timeshare units direct from the company. It is not individuals renting out the units they own.

So let's say Tahiti Village has 300 units (just making up numbers). 52 weeks/year x 300 is 15,600 weeks available. Let's say 20% haven't been sold yet. That's 3,120 vacant weeks or 21,840 vacant nights. RCI, the management company, will offer those units for rent through companies like Skyauction at a reduced price because it is better for them to get something than nothing. That's why I've been able to rent timeshares for $37/night when someone who owns an identical unit has to pay $50/night or more just for the annual fee on top of the $20,000 spent to "buy" the unit.

[Petunia 100]

I did a searcha swell and there are people that are selling the same timeshare unit for $25,000. Why would people be selling it for this price it it wasn't what it was worth?

Great, your problem is solved. Sell it for 25k, pay off your 17k loan, and decide what to do with the 8k you have left.

I love a happy ending.

[disneysteve]

Great, your problem is solved. Sell it for 25k, pay off your 17k loan, and decide what to do with the 8k you have left.

I love a happy ending.

Why didn't I think of that?

[EarlyRetirementJoy]

Clearly the OP is a troll. All subsequent OP replies have been simply to keep this thread going.

On a different note, if those of you that have been posting here haven't yet viewed the recent documentary about timeshare king David Siegel, 'Queen of Versailles' you might find it as fascinating as I did. Here's a related quote from the movie on the timeshare 'market' though I'll quote somewhat incorrectly since I don't have the script in front of me:

"Who is the typical timeshare customer? A lower middle-income couple or family that ascribes to a lifestyle they can't really afford. We sell them the dream they couldn't attain otherwise."

[bp019j]

I agree with the "We sell them the dream they couldn't attain otherwise.", but tend to disagree with the lower middle income couple. There are timeshares that attract high net worth families. It all depends on the location of the resort and the brand behind the timeshare.

[disneysteve]

I agree with the "We sell them the dream they couldn't attain otherwise.", but tend to disagree with the lower middle income couple. There are timeshares that attract high net worth families. It all depends on the location of the resort and the brand behind the timeshare.

I also disagree with the income comment. I know many people who own timeshares and many don't fit that description. In fact most are relatively high in the income department. That's why they can afford a timeshare. They aren't cheap. There are much less expensive ways to vacation.

I got another Skyauction email this week. They have several resorts in the Disney World area renting for $15/night. I may actually book one for our summer vacation this year. It's tough to pass up that price for a 2 bedroom unit in a beautiful resort.

[EarlyRetirementJoy]

I also disagree with the income comment. I know many people who own timeshares and many don't fit that description. In fact most are relatively high in the income department. That's why they can afford a timeshare. They aren't cheap. There are much less expensive ways to vacation.

I got another Skyauction email this week. They have several resorts in the Disney World area renting for $15/night. I may actually book one for our summer vacation this year. It's tough to pass up that price for a 2 bedroom unit in a beautiful resort.

Folks - this was the quote from the biggest timeshare corporation owner of all time. I would therefore presume he knows of what he speaks. The truly high income folk buy their vacation homes, they don't 'timeshare' them.

Here's another quote I just located, that supports Mr. Siegel's business model, "The dirty secret of the timeshare industry is that anybody who buys one from a developer has simply been the victim of an aggressive sales seminar. Go online and find thousands of timeshare owners trying to sell their timeshares for a fraction of what they paid—many priced at $1."

As several of you have already done, and confirmed.

What savvy, well to do individuals do you see fitting into this model? They didn't get to be well to do by falling for high pressure sales pitches.

If timeshares could be resold for profit, or even for what was paid originally, they might make investment sense. Since they can't, they don't. It's as simple as that.

[disneysteve]

Folks - this was the quote from the biggest timeshare corporation owner of all time. I would therefore presume he knows of what he speaks. The truly high income folk buy their vacation homes, they don't 'timeshare' them.

Sorry, I was typing on my phone while riding on a school bus so didn't fully express myself.

I know a lot of upper income people who own timeshares, but most (if not all) bought them as resales. They're not stupid enough to pay $20,000 for something that's really only worth $1.

So his quote really should be that the folks who fall victim to the high pressured sales pitch by the developer fall into the lower income group but there are plenty of timeshare customers out there who don't fit that description and chose a much more sensible way to become timeshare owners.

As for buying a vacation home vs. a timeshare, I think those are two totally different things. Someone who buys a vacation home wants to go to the same place year after year, probably for extended visits, and stay in the same exact property each time. Timeshare owners, at least the ones I know, like the flexibility of visiting different resorts around the country and even outside of the country, by trading their ownership interest. Either that or they do want to go to the same place each year but they can only go for 1 week. You don't buy a vacation home to only use it for 1 week per year (unless you want to rent the place out the rest of the year). That would be an incredibly expensive way to vacation compared to owning a resale timeshare unit.

[Like2Plan]

Folks - this was the quote from the biggest timeshare corporation owner of all time. I would therefore presume he knows of what he speaks. The truly high income folk buy their vacation homes, they don't 'timeshare' them.

I thought the 'Queen of Versailles' was a very interesting movie... Perhaps he knows about what he speaks, but didn't that guy go bankrupt?

[EarlyRetirementJoy]

I thought the 'Queen of Versailles' was a very interesting movie... Perhaps he knows about what he speaks, but didn't that guy go bankrupt?

That is actually the biggest irony in the movie, and the one most often discussed by reviewers. Here's an assessment I thought hit the mark pretty well, from NY Magazine:

Consider the source of Siegel’s fortune, Westgate Resorts, the “Rolls-Royce of time-share companies,” its properties designed to appeal to ordinary folks who want to feel “rich and famous” and “vacation like a Rockefeller.” In essence, Siegel was hard-selling subprime mortgages to people who couldn’t afford them—much like the banks that, in the course of the film, swoop down to foreclose on his beloved Versailles and his 52-story Las Vegas hotel, PH Towers Westgate. The irony is delicious.

As of 2013, Mr. Siegel's fortune is back on the rise. I I would presume that timeshare sales will pick up right along with it, although the hot term now being used in the industry is 'Fractional Ownership.' Same old thing, just a different shade of lipstick.

[SeanH]

The OP layered it on a little thick, but I still enjoyed the dialogue. Always have to be on the lookout for salespeople selling complexity.

[JoeP]

The OP layered it on a little thick, but I still enjoyed the dialogue. Always have to be on the lookout for salespeople selling complexity.

Might be a long shot, but I have to wonder if the OP is a timeshare salesman looking for typical responses from those who know better, in order to build a more solid sales pitch.

[disneysteve]

Might be a long shot, but I have to wonder if the OP is a timeshare salesman looking for typical responses from those who know better, in order to build a more solid sales pitch.

I have to say, this is one time when if the OP was a troll, I really don't care because I think it spurred an interesting conversation.

[Nika]

If you don't buy a timeshare, you can use the money, and the maintenance fees you would have paid to get a week in a very nice hotel room anywhere you want, with no hassles, limitations or commitments.

[disneysteve]

If you don't buy a timeshare, you can use the money, and the maintenance fees you would have paid to get a week in a very nice hotel room anywhere you want, with no hassles, limitations or commitments.

And as I've said, you can actually rent the very same units you would have bought typically for less money than it costs to own them. Even if you spend a little more than the ownership cost, you still come out ahead because you have no commitment (and haven't paid any interest on a loan).