Yep, years ago we bought a timeshare. Really dumb, probably our dumbest mistake. Very very stupid. Bad idea. Our biggest problem was the annual maintenance fees. I never actually calculated how stupid it was but I am about to here. This is also something stupid we did that we never mentioned to anyone.
First the cost, we bought a timeshare 2003 for $5k for a great week in Daytona Beach. It was Bike Week a motorcycle week. Not a bad idea, but we were never going back to florida to use it. Instead we were just going to trade it in. So that $5k should have gone into my Roth IRA or paid off the house or bought a nicer car. Stupid idiot (me).
Second there were annual maintenance fees of $200. Sure it doesn't sound like a lot, but it adds up if you keep it for years. Idiot! Again it's just a reoccuring cost that adds to what you spent to "vacation."
Third, there is a fee for RCI, a timeshare exchange company of $99/year. Sounds like a great idea. But how will you really trade your timeshare in? We did, and it was great, but when you "exchange" your timeshare then you end up needing to pay another fee of $189/exchange. So annually you are out of pocket spending $600 for a hotel room. Yep it's a nice room, but you also spent the $5k upfront costs.
Thus why people have such trouble giving away timeshares. I believe that we spent $5k + (2x300) + (2x100) + 189 = $6000 in all for our timeshare we never used. Great idea. So there was my brilliant vacation plan.
Yep my stupidity now out in the open for me to look at and cry about. It was such a dumb dumb idea. I hope no one in my family reads this because I can't believe how stupid I am. Or how dumb I was.
But I finally got rid of it this year. Buyer's remorse. I couldn't sell it though we tried. Instead we donated it. Which turned out to be a blessing in disguise. Good thing we did it now when our income was much higher and we get better tax break. You can't undo our stupidity, but you can try to stop the money leak.
All in all, would I change a thing? Not really, I need to make a few money mistakes in my life or else I'll never learn anything. But this was one of my more idiotic lessons.
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10 comments:
L.A.L:
Maybe you weren't as dumb as you thinketh.
Whence I had no children and was 20-something, a timeshare week would've been d.u.m.b. -- now that I'm kidded and need to be 'forced' to take a vacation, timeshares are less dumb. Perhaps not smart, but less dumb.
Kids are more fun to travel with when:
1) you have a kitchen to prepare breakfast & occasional eat-in meal -- mucho cheaper and more relaxing than trudging to a restaurant for every meal
2)you have a living room to stretch out in, play 'bored games' and watch a dvd or three.
3) you have doors on seperate bedroom(s) to have private [ahem] non-kiddified time.
Trading timeshares is a pain for many. Works great for retirees, or folks with more flexy schedules. Not so for us.
Points timeshares with multiple resorts (like the Worldmark outfit here on the left coast) are mucho better, as long-weekend at a drive-to resort is easier to plan than a full-week away.
In short, you may be dumb for owning a timeshare too soon. And perhaps a little dumb for buying in a place you don't travel to often/yearly.
Thanks, though, for the smartly-written article.
It's one of those things that I really regret however. I did manage to unload it last year and not pay for the annual fees. I also get a tax write off but I'm not sure how much. It is better I guess we did it now rather than earlier when we were in a much lower tax bracket.
Also we did use it for trading so it wasn't a complete waste. But it was stupid. I won't be doing it again. Thanks for the note.
You can also rent an apartment or house for a vacation. Don't know how this compares to time shares moneywise.
I think I'll stick to hotels.
DUMB???? I am an RIA (registered invesetment advisor) and I own two weeks. Best investment I ever made. Not that timeshare is an investment but in the money I have saved by not paying hotel prices. Mine are for 30 years and my maintenance is $650 per week and I paid $15,000 per week. Do the math, add inflation and calculate your fixed cost (including RCI ( which sucks II is the way to go with all the brand name properties) add your exchange fees - you cannot travel cheaper at the name brands in the long run - nor dare I say at this moment. I did all that my fixed cost per night - including everything is $112 for thirty years . The average Motel 6 IS $86 per night. You paid $5000 and your MF is $200?? Get out your calculator and do the math.
I've stayed in Switzerland at 4 star hotels at Christmas using priceline and expedia in 2005. It was all less than $80/night. I've also stayed in Japan and China for less than $100 a night. In major cities like Tokyo, Kyoto, and Osaka, Hong Kong, Beijing, etc.
Trust me hotels are way cheaper. The maintenance fee, plus the RCI membership, plus the exchange fee does not make it cheap to travel using a timeshare.
It might be cheaper when we have kids, but for now our flexibility is based on we go where the deals take us. We pick a time, look for great airfare, our tickets to switzerland direct on swiss air was $400 roundtrip including all taxes, etc. Then we went to Zurich, Basel, and Luzern. Overall our trip cost less than $2500 for a week including eat out all meals and not at cheap places.
Our biggest savings were from hotels and airfare. We stay at the NT, la international or something, and a third I can't recognize. They are 4-5 star hotels.
Timeshares have a certain connotation that just the mention of the word makes people shy away. I would say it's justified partly because of sales tactics, but also because of stories like yours which I think just amounts more to misunderstanding about timeshare costs (which also could be from shady sales people). I agree that people should understand all the costs of a timeshare before buying it as well, and that a timeshare isn't for everyone, but I will say we love ours. I'm part of a familiy that owns multiple timeshares and just the fact that it "forces" us to take vacations in our hectic lives is value enough, similar to a reason some people need a personal trainer at the gym: just to force them to stay accountable. But even outside of that reason we've found value in our timeshares worth the cost. Just wanted to offer another viewpoint. Thank you for writing your post! More knowledge and exposure the better people can make decisions.
Timeshares are a poor investment in my eyes. It so hard to find timeshare relief. There are so many hidden fees. It not worth it.
There is no question that purchasing a Timeshare will be a problem. If you really want to avoid Timeshare problems they could always look for timeshare relief
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