This Devil’s Advocate post comes from my friend Lazy Man of Lazy Man and Money , owner of a timeshare in Aruba .
Almost every personal finance guru will tell you that it rarely makes sense to buy a timeshare. They often cite scary fine print, travel inflexibility, and difficulty in selling the timeshare. These are legitimate concerns for some timeshare owners, but not all. Back before I was heavily into personal finance, I considered a timeshare. And my girlfriend (now my wife) on a trip to Aruba actually bought one. Was it a bad decision? I don’t think so. Why? Well here are a few details that make our purchase seem “worth it.”
Four Reasons Why Timeshares Rock!
- The numbers work out – I’ve run the numbers over ten times to be sure. If we took the money and put it in some safer investments earning 5-7%, we would be able to afford the same accommodations that we have now. No more, no less. The last time that we used our timeshare, I asked how much we could sell it back to Marriott for and it was more than what we paid for it four years ago, even after Marriott’s cut. Marriott has a similar unit listed at a price that, if were to sell ours, represents a 15% compounded annual gain on our original investment in 2004.
- We have plenty of time to go away – My wife gets six weeks of vacation from her military job. I work from home. We know we are going to be using this vacation.
- It forces us to take a vacation – Sometimes people get in a “work, work, work” mode and that’s simply not healthy. By having a timeshare, we are “forced” to take a vacation each year, which is enough of an excuse to get us planning and out the door. And if you’re a work junkie, consider this: You’ll be more productive when you get back after a week of fun in the sun.
- It drives us to see the world – If you asked me two years ago if I ever wanted to go Thailand, I would have said it wasn’t in my list of top ten vacation spots. However, last year, as luck would have it, we had an opportunity to visit Thailand in an affordable way and we took it. Travel to Thailand was down and we were given an opportunity we didn’t want to pass up. We traded half of our timeshare (we have two rooms) for a suite fit for an emperor. One memorable experience my wife and I will never forget was Yambo, a baby elephant, playing with his log like a child with a new Wii.
These reasons make owning a timeshare right for us. However, that’s doesn’t mean you should run out and buy a timeshare right this second. Like any purchase, a little research and a few smart buying decisions goes a long way.
Timeshare Buying Tips
- Buy on the Resale Market – You can usually save 30% or more by looking for timeshares on sites like Ebay  or Red Week . Buying directly from the builder means you’re paying for all the marketing and freebies they’re offering people just to listen to their pitch. It’s estimated that 50% of the price of a timeshare goes to cover marketing costs. This is the one big mistake that we made.
- Pick a Property with Staying Power – You want to pick a name that’s going to be around. We didn’t think Marriott was going bankrupt any time soon so we trusted the brand name. In this economy, you can never tell, but we had more confidence in Marriott, since it’s a widely recognized brand, over some other lesser known companies.
- Choose a Deeded Timeshare Property – We own the Marriott timeshare for life. We can pass it on to our kids and their kids’ kids. There are some timeshares that are only “right to use” and expire after a set number of years. We like the fact that we own property in Aruba. Many people would argue that real estate ownership is an investment.
- Pick One with Flexible Weeks – Some timeshares are for specific weeks of the year and only that week. If you buy week 42 and you can’t go on that week, you have to trade it, sell it, or lose it. With the Marriott timeshare, we can choose any week within a 6 month window and that flexibility is crucial. We pick when we go, not Marriott or some contract.
- Buy Now If You Can – The economy is in the dumps. People should be looking to dump them because they simply can’t afford to go on vacation or pay the yearly maintenance fees. This gives you a ton of negotiating power. Use it.
What do you think of timeshares? Good value or a waste of money and time?
(Photo: VideoVik )