Are Timeshares a good option?
I get asked if timeshares are a good deal. Sure they are! The owner is making a pile of cash. Wouldn’t you sell a $150,000 home for 1.6 million dollars? How could you go wrong? Oh yeah, you don’t pay future maintenance fees because they are passed on.
I had the opportunity to attend a timeshare demonstration this past week. The demonstration started out with the owner spends $18,000 everyday in marketing to attract people like me to their resort. After we received the hour presentation, the salesman took my wife and I on a tour of the resort. My wife and I had already discussed that we didn’t like the resort because it was too far from the main drag of Branson and from Table rock Lake. When we headed back to the sales office, the sales pitch started. For only $32,000, my family and I could enjoy this condo for life for 1 week a year. That is right, for $1.6 million dollars the developer will sacrifice the amenities of the resort to 50 owners to use a condo and the resorts amenities. In this case, the developer will have over 1000 condos and cabins to sell. In a normal market and their given location they would sell for less than $200,000. Checking out the area, I found a couple subdivisions in a better location, with single family homes with larger square footage in the 160’s. Maybe I should buy these homes and sell 50 people 1 week ownerships in the home for $25,000 each. I know, I’ll only have 1 ¼ million dollars to work with, but I’m sure I can turn a profit somehow. I might even let the 50 owners use the yacht, swimming pool and airplane that I would be able to afford after doing this a few times.
When I told the sales man that $32,000 was too much he started talking about I could trade to other locations and that was the real value. He said that people come there from Florida to buy timeshares because they were cheaper and easier to trade to areas like Hawaii. He brought his sales manager over who offered a condo on the water for $16,000; however, it I bought within 24 hours, he could sell for $14,000.
Why would someone spend $32,000 to use a condo 1 week a year, when they could spend $150,000 to use a home for a whole year? OK, if it is financial, form a group of partners and rent the house out when you are not using. Make it a real investment that could be sold. Have you seen the resale value on a timeshare? I saw a timeshare that a person bought last year in the 30K range trying to sell their time share for 12k on e-bay. I even saw some selling for less on ebay. I looked online and I believe most are sold at a lost. If you really want to buy a timeshare, buy a preowned timeshare on ebay or craigslist.com. You get all of the perks like trading to another resort without the high prices of paying retail.
My research found that timeshares are poor investments. They should be strictly bought for pleasure and enjoyment.
Contact the Dowell Taggart Team for your Kansas City real estate needs! www.DowellTaggart.com
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