Making the most of a timeshare

About 25 years ago, I bought a timeshare.  It was a truly stupid financial decision and one I’ve kicked myself more times over than can be counted.  Now I’m now longer working full time, the moment has come for some serious payback.  Here’s how I’m achieving this …

Here’s the costs

First there’s the initial cost ….

In 1990, a week in a timeshare was worth A$9-10,000.  This amount was enough for a small deposit on a flat or cheaper home.  So to compare with a value in 2016, I figure it’s the equivalent of about A$40,000.

In real terms, the timeshare was worth about $2,400 but timeshare sales people with their magically misleading calculations, infrastructure and incentives to entice you to part with your dough all have to be paid for.

Hence the huge markup and over-the-top profits the industry made (and still do).

Here’s the math, and don’t panic because it’s very simple:

a                             52 weeks x $10,000  = $520,000

So, in 1990, was a 2 bedroom unit in any resort worth $520,000?  Not on your pickled gherkin.  Absolutely not.  In 1990, that unit would’ve been worth about $125,000 on a very sunny day.

Then there’s the maintenance fee …

Each year you get slugged a maintenance fee for your week (or credits or points).  And yes, it’s a disproportionately huge amount to what you actually own.

For example, I own a holiday apartment in Queensland.  The body corporate fee plus additional maintenance is $5,000pa – that’s $96 per week.  But the fee for a week at the timeshare this year was $770.  How can it be worth $674 more?

And the cost to exchange …

You’ve bought the timeshare and now you want to stay in a resort that you don’t own.  Time to fork out some more money to exchange your week.  Generally this costs between $119-150, depending on who you use.

Selling a timeshare

I could sell my week, but unfortunately I will NEVER get back its real value, let alone what I paid for it.  Even now, if you purchase a timeshare (be it points, weeks or credits), I’m incredibly safe in saying you can kiss most of your money goodbye.

Right now, my timeshare is worth A$1,500 – on a very optimistic day.  In reality, I’d be lucky to get $1,000, if I could sell it at all.  It’s been this way for decades and it will not change.

Payback time

So having spent precious money on a timeshare and realising it’s fairly pointless trying to sell it, how do you make the most of it?

Here’s how I’m getting payback for all that lost money.

  1. Use your timeshare – you’ve forked out a maintenance fee so you might as well take your week. You’re wasting that money if you don’t use it. If you can’t use it, rent or sell the week to friends or family members.
  2. Make the most of bonus weeks.  The timeshare company should send you an email with a list of resorts available in the next couple of months at cheap rates. This is easier if you’re not working full time and can be flexible with where you stay. We love bonus weeks.
  3. If you’re invited to a timeshare presentation and you’re promised a good deal for a meal, a cruise or a new dressing gown, take it up.  Assuming you have time.  I occasionally do this for payback and inevitably learn something in the process.
  4. To spend your timeshare week in another resort, put in your exchange request as early as you can.  Timeshare presentations can be sneaky and misleading when it comes to the strength of your resort’s trading power, and so the only real way to get in is to beat everyone else to it.
    It’s annoying because you have to plan so far ahead (2 years or more) but apparently this is the best way to get what you want. Personally we don’t work that far ahead so we frequently miss out … then use AirB&B when caught short.  We love AirB&B.

Consoling yourself

  1. Timeshare companies say you should think of timeshare as a holiday which you’ve paid for in advance.  Personally this doesn’t make me feel better because I pay for all accommodation in advance anyway, but you might find comfort from it.
  2. Timeshare resorts actually provide great amenities such as kitchens, washer/dryers, and are often more spacious than other resorts. Some are even quite luxurious, particularly if they’re new or recently renovated.  When you compare with the cost of a hotel, motel or similar resorts, it often works out you’re getting a good deal.
  3. Use bonus weeks or points offered by your timeshare company. They can be used over a weekend, to house your friends for a period of time, or to add another week to an area you’re visiting.  Now we’re retired, we use bonus weeks as much as possible as we travel around.  It’s great because you get to stay in nice places you didn’t know existed.
  4. If you use points, you can also:
    • exchange for airline tickets, hotels, travel packages, cruises, amusement park tickets
    • rent part of your points
    • rent more points from the exchange company or another owner to get a larger unit, more holiday time or a better location
    • save or move points from one year to another

For more thoughts on timeshare, see my post on timeshare tattle.

Timeshare tattle

I bought a timeshare about 25 years ago.  If you’d like to know my thoughts on this method of having a holiday, read on …

So what’s a timeshare?

I’ll start at square one so those who don’t understand the concept of timeshare can get a grip on it.

I’m not an expert, and although I’ve owned a timeshare for a long time, the industry does change its offerings from time to time in order to suck more people in.

So there seems to be a couple of types of timeshares:

  1. Purchase a week or points at a particular resort, then either stay at that resort for no further monies, or pay out more dollars to stay at a different resort.
  2. Purchase points or credits in a timeshare entity, then stay at whatever resort you want for however long your credits allow you to. Some resorts chew up more credits than others, so the length of time varies depending on the quality of the resort.

There’s more permutations to these options.  For example, you can select a particular week in a year (such as in school holidays) – this will inevitably cost you more.

Initial costs

What you fork out is going to vary.  Listen to the sales pitch, then leave and do your research.  A secondhand timeshare is inevitably going to be much better value than a new one.

The credits game

Last week we attended a “Tweed River lunch cruise for $5 if you attend a Wyndham timeshare presentation”.  Over two hours later we walked out a lot wiser and slightly bemused at the hideous prices quoted for ‘credits’ in a timeshare.

For example, they took one look at our travel budget and decided to offer their special Top Quality option – about $80,000 for 4-8 weeks of timeshare.  The trouble with credits is it’s tricky to do the mathematics to find out what a week is actually worth.

Whatever way you look at it, I would never entertain the option of buying brand new credits.  If you’re interested, suggest you buy them secondhand.  You’ll save a lot of dough.

In truth, we only went to get the cheap river cruise – part of my payback scheme!

Maintenance fees

For every week or bunch of credits you own, you’re going to get lumbered with a yearly maintenance fee to cover management costs, maintenance and general upkeep.

The amount varies depending on how new the resort is, so don’t fall for the “it’s only $300 a year” because in a few years as the resort ages and maintenance is required, it’ll miraculously jump to $500, then $600, $700, $800 …

Then surprise surprise, special levies begin to appear to replace the pool shade or broken equipment, or add 16 new air conditioners because management didn’t think about putting funds aside (yes, I’m just a tad bitter).

You can’t get around the maintenance fee or special levies.  You have to pay it or you can’t use your timeshare.

What can you do with a timeshare?

Stay in your resort

Pick an appropriate date, book it and go. Should be no additional costs although I can’t guarantee that.  Some resorts slug you a further amount (eg. $20) to cover utilities such as electricity.  You can probably take a guess as to what I think about that.

Generally you can stay a weekend, mid week or for an entire week – depends on what you’ve bought.

Stay in another resort

For those who own weeks or points, you go through a separate company such as Holiday Concepts, RCI or DAE to stay at a different resort.  In my experience, they charge up from $120-150 for the privilege.

I do not recommend RCI unless you own a timeshare through Wyndham Vacation Resorts.   Wyndham bought out RCI a few years ago, and consequently RCI is valueless to anyone except Wyndham members, who get the pick of resorts and timeframes.  The rest of us get the dregs, and there’s not too much of those left either.  DO NOT buy RCI membership unless you’re with Wyndham – DAE are a better deal.

So be aware you can’t always get into the resort you want at the time you want.  You’ll need to book 2 or more years in advance to even have half a chance.

Bonus weeks

From time to time, you can score a bonus week or weekend for a good price.  These are what make timeshare worthwhile.  More about those in making the most of a timeshare.

How do you purchase a timeshare?

I bought mine through a timeshare company and indeed, you can do that too.  But beware, you’ll be paying through your nose.

Therefore I highly recommend you buy a timeshare secondhand and you’ll save a LOT of money.

Do some research on the internet for companies who deal in used timeshares, and check websites such as eBay or Gumtree to see if owners are selling them directly (even better value).  Instead of paying $20-40,000, you’ll pay a fraction of that cost.

Can you sell one?

Yes, you can.  But this is important … you will NEVER get back its value no matter what the timeshare sales people tell you.  You spend your money on a timeshare, kiss most of it goodbye. Forever.

For example, right now my timeshare might be worth A$1,500 on a very optimistic day.  In reality, I’d be lucky to get $1,000.


So what’s the point of a timeshare?

I’ve probably put you off owning a timeshare, but it does have positives.  If you’ve bought one secondhand, you’re a step ahead of those who’ve kissed away a lot of money buying a brand new one.

The good things about a timeshare are:

  • you’re forced to take a holiday or you lose your week
  • you get to stay in places you never knew about
  • most resorts are very good quality
  • most resorts have kitchens with everything you need in it
  • most resorts have washing machines and dryers
  • most are located near places you’d like to visit
  • many have programs like pancake breakfasts, whale watching walks, games and trivia sessions etc – many are excellent if you have children
  • resorts are built to be child-friendly
  • use bonus weeks to stay longer (available last minute)
  • use bonus weeks to start getting value (see my next blog entry for more information)

There’s probably more positives and I’d love to hear from other owners who benefit from owning a timeshare.  Always good to balance the equation!