Whether you crave the caress of a tropical breeze as you lounge on a golden beach in Hawaii or Florida or the bite of fresh snow under your skis in the Rockies or New England, the dream of owning a timeshare week might be closer than ever.
Today’s economic tough times mean that you can find vacation weeks online for less than what you paid for your last cup of coffee, but like the lines that keep you tethered to the parasail above your beach paradise, there are strings attached. You might face unexpected obstacles to swapping your timeshare for another location. And higher fees that are passed along by timeshare operators are the rule of the day.
BUY, BUY, BABY. The worst recession since the Great Depression makes it a buyer’s market for many timeshare locations—particularly those resorts that are in areas that have seen the worst of the real estate downturn, such as Arizona, Florida and Nevada. Deals that are offered online by private owners might save you hundreds of dollars when compared with what you would have paid for similar properties in the resale market just a few years ago. And these deals are thousands of dollars less than what you’d typically pay for a direct purchase from a resort owner.
“I paid less than $1,000 for my timeshare on eBay in 2006,” says Robert Donathan, who is a retiree from Austin, Texas, and has vacationed several times at his one-bedroom, 1-week timeshare in Orlando, Fla. He says owners who live next door might have paid $10,000 or $15,000 for their units. But more-recent buyers can top Donathan’s deal: A glance at eBay in early March listed timeshare weeks in such places as Orlando, Fla., and Branson, Mo., that sold for $1 each—sometimes without closing costs. We also found high-profile vacation weeks in the Rockies and Hawaii that sold for $100 or less.
That’s really an eye-opener when you consider that the average price of a timeshare in 2008 was $20,150, according to a survey by American Resort Development Association (ARDA), which is a trade group for the timeshare industry.
But before you decide to snap up low-price timeshares to sell at a profit, you should keep in mind that the initial purchase is far from the only expense that you’ll encounter. This is why we agree with the routine advice that you should buy a timeshare because it is a vacation spot that you want to revisit regularly and not as an investment.
Pressure Points: The Pitch Remains the Same
No matter how much that you paid, you still will owe the annual maintenance fees (typically from $464 for a studio apartment to $739 for a two-bedroom unit, according to ARDA), and you’re subject to any fee hikes. Maintenance fees aren’t set amounts that you can budget, and they never go down, industry observers say.
“What starts out as a $400 annual fee could grow to over $1,000 in 10 years, at which point, it doesn’t seem so cheap anymore,” says Brian Rogers, who runs tug2.net, which is a Web site that has 41,000 registered users and one that consumer advocates point to as a valuable resource for timeshare owners. The site allows owners to exchange ideas on how to get better deals, call out scams and swap timeshare weeks.
“When you purchase a timeshare, you are under contract, and there is no recourse whatsoever if maintenance fees go up, because it’s contractually legal,” says Martin Brees, who is a timeshare consumer advocate at TimeshareMortgageRelief.com—a broker that will help troubled timeshare owners who want to get out of their contracts to sell their timeshare. (The group charges a fee that totals about 10 percent of the mortgage on the property if it makes a sale.)