Timeshare shopping?

Being a real estate investor, and an avid traveller myself, I am perpetually looking for vacation deals- deals for flights, hotels, car rentals, etc. And yes, I had considered owning a timeshare once upon a time. I did a lot of research to understand this unique market, and found it very interesting, how its changed over the years. This concept started in Europe in the 1960s, and came to the US around the late 1960s. This inspired me to write this blog to explain what timeshares are and whether or not it makes sense to buy them.

If you are reading this blog, then you have probably heard about one; and may be even planning to invest in one or looking at selling yours. Well, if you haven't heard of timeshares before, here is a short story. You are on a vacation and arrive in Cancun, Mexico with your spouse/ partner/ family. You are approched by a well-dressed gentleman, who introduces himself as an employee of a resort XYZ, greets you, welcomes you to his country, asks where you're from & how
your flight was, etc.- thats a nice gesture, right?

Well, then he asks you where's you're staying, and if you need a ride to your hotel. Well, since most of us have got up at wee hours of the morning of travel, travelled a few hours by air, a ride to the hotel in a private van is would be nice, as compared to sitting in a local airport shuttle that takes 2 hours to reach you hotel.

By this time you probably have an idea of whats to come, but well, "lets see", you say. On the way to the airport, this nice gentleman offers a "free" breakfast next morning at his resort (and ofcourse there will be a private van to pick you up for breakfast), and "free" tickets to see Chichen Itza (a tourist spot near Cancun). "After breakfast", he says, "you only need to spend a few minutes looking at our property, and then you are on your way to Chichen Itza". Hmmm.. you think... not bad... you can save some money on food & tickets. "Sure" you say.

Next day, as promised you are picked up, arrive at the resort for breakfast, have a brief "chat" about the property, and then head to the property tour. Now, you definitely know whats coming, and you're just waiting for this to get over, and drive off to Chichen Itza, but wait.. this is not over. For the next 3 hours, you tour the property, watch videos, sit in a room full of "shark" salesman and their "super-shark" managers who are desperate to sell you timeshare or 'ownership' in their resort for a 'minimal' fee and great benefits- "its the best investment you can ever make" or "why rent when you can own for cheaper"- they say. By the end of it all, you pobably want to cry out loud or jump off the Chichen Itza tower.

True story, and victims were my my spouse & me. This is a typical scenario how people are wooed into "owning" a property, lease, condominium, apartment etc. either standalone or as a part of resort or club membership. for a limited number of days in a year for a certain membership fee. I am not stating that all timeshare owners have been through this experience; I'm just saying this is a typical scenario. These types of arrangements usually exist at tourist hotspots, like Las Vegas, Florida, Hawaii, Mexico, Carribean, etc.

From a sellers point of view, this arrangement works well, since they get paid membership fees for something that you may or may not use. Its like a gym membership fee, the gym makes money from you whether or not you are interested in toning your muscles. And the catch is even if you are an 'owner' of the property, you may not get what you are looking for at a time you want to go visit. For example, if you want to travel to Alaska in ther summer, or Florida in the winter, you might have to book way in advance to ensure availability, which you may or may not get.

If you are part of a club membership which has a bunch of different properties, you can choose from different hotels, but again if you don't book way in advance, or if you're travelling at the peak season, you might have to settle for something more expensive or further away from the main town. Nothing comes free!

Does this mean it does not make sense to own a timeshares? Well, I think it does not, but there are some arguments that support such an investment. I do not agree with all of them, but I just wanted to put it out there.

Stay tuned in for later posts describing types of timeshares, differences between ownership & other forms of vacation rentals, benefits & pains of owning one, how it may not be the best use of money if you are a bargain hunter like I am.