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A Decision to Buy into a Timeshare

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A couple of days ago, I gave some details about our Maui vacation. However, one point that I glossed over was that my wife and I own a timeshare.

Yep, one of those things that the financial professionals tell you never to buy.

I don't know if I've written the back-story to how the timeshare came into our lives, but I think its an interesting story and I hope that someone will learn something.

In early 2004, I experienced a month of unprecedented success. The technology bust was starting to end, and I got a software engineering job with a company filled with people who I had worked with very successfully before. Soon after, I started a very interesting woman. I knew it had potential when she felt the same way about Derek Jeter that I do. (Hey we're both Bostonians!) We had been dating for about 6 weeks when a buddy of mine said to me, "Hey the wife and I have the 2 bedroom timeshare in Aruba reserved for late October. It's too much space for the two of us, perhaps you'd like to come along with your new girlfriend?" I knew it was a little early to ask about vacation plans, but late October was still a good 5 months away. I decided to cautiously approach this woman I had been dating about it, with the idea of, "Hey this offer is clearly contingent on us being together at the time. However, at that point we'll have dated 6 months and it isn't so weird." My friend understood from the outset that it was going to be difficult for us to commit then and there, but he left it as an open invitation.

Fast forward to around July/August timefame and we realized it was time to book the tickets.

The woman I was dating wasn't sure what to make of Aruba. She had heard stories about some places in the Caribbean that aren't as flattering when you leave the resort (I've heard this about Jamaica a few times.) However, Aruba surprised her as just being a great place. It was clean, good beaches, the Marriott where we were staying had a great pool. The weather was fantastic the entire time. Pretty much everyone was from New York or Boston. There were enough Bostonians that we dubbed it, "South, South Boston." It was a homerun of a vacation.

The vacation was going so well, that my girlfriend and I went to the timeshare presentation. They usually give you around $100 in gift certificates for a local restaurant for an hour of your time. That seemed like a good to me so we took it. (Note: this will be analyzed in more detail in a future post.) It was a "WE" because even though my girlfriend and I each earned a good income at the time, they gear the offers to couples... and they heavily prefer them to be married.

We took in the information about the timeshare and, as salesmen are paid to do, they made a good case for timeshare ownership. As we were just dating each of absorbed the information differently. After the technology bust, I didn't have the disposable income for it. However, I had been to the same presentation 4 years earlier with another friend and the property was around $14,000. This time it was $19,000. This made me feel like I was missing out on a good investment which lead me to think that the $19,000 price wasn't too bad and the property would only be worth more in the future.

My girlfriend, on the other hand, was in a different economic situation. As a pharmacist, she didn't go through a technology bust as I had. In fact, her position with the military had quite a bit of job security as well as 6 weeks of vacation. She also had gotten a recent promotion. When you think about it, she was close to the ideal candidate to buy a timeshare. She had the vacation time to use it an the money to buy it. I supported it because it made sense to me.

The question was, "Is it a smart decision to buy a timeshare?" There's a big stigma againt buying timeshares. I think that investors in the 80's got in and were burned. However, with huge companies like the Marriott offering deeded timeshares, it looks more interesting.

In the end, my girlfriend made the call to buy the timeshare.

Slightly more than one year later, my girlfriend and I were on another trip to the Caribbean. The marketing in airports on trips to the Caribbean pitch their jewelry (perhaps in an attempt to appeal to people avoiding use tax). My girlfriend jokingly put those advertisements on my lap a couple of times as a not-so-subtle hint. What she didn't know is that each time she slapped my lap, she hit the engagement ring that I was carrying.

That girlfriend became my wife. And with that we have a timeshare.

Was it a wise decision? In 2004 (years before I would start Lazy Man and Money), it seemed like an appropriate choice. In upcoming posts, we'll break it down in more detail.

Posted on February 24, 2012.

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14 Responses to “A Decision to Buy into a Timeshare”

  1. I think it just comes down to whether you like the location enough to go back each year and that you can truly fit a yearly vacation into your budget. My girlfriend and I had attended a timeshare presentation in the past and they actually told us to say we were married so that we could qualify. We weren’t really interested in the timeshare though. We just wanted the freebie they were giving all attendees.

  2. I have thought more than once about buying a time-share. I have been to similar presentations where, I must say, they do a really excellent job of making you feel like you need to buy one!

    I don’t mean to rain on your parade, but $19K sounds a little high for me. And the only reason I say this is because I have seen the time-share properties for the presentations I attended (Starwood) on eBay for almost nothing. Basically if you pay the membership dues, its yours.

    I guess in any circumstance, you have to ask yourself how long it will take to make your money back. For example, if the trip to Aruba cost $4K but you subtract out the cost of flying $1K, then you’ve got just over 6 trips before you’ve broke even. If you were planning to go back that many times, then perhaps the product paid for itself!

  3. Tommy Z says:

    I’m a financial analyst. I’ve been to many timeshare presentations, but I’ve never bought because the numbers never make sense. The whole concept/idea is great! I know I’m going to be doing a lot of vacationing in my life and if I buy my vacations in bulk the same way I buy at Sam’s Club, it makes sense that there is some money to be saved…but there isn’t.

    During my last presentation with a timeshare salesperson, I told the guy I would not take the timeshare for free if he gave it to me because the annual fees are as high as or higher than the cost of staying in a hotel…and the fees can increase every year without limit and you are forced into paying them whether you like it or not.

    The one positive thing about a timeshare is that the accommodations are usually nicer than hotels…but when I go on vacations, I plan to be out and about…not sticking around in some hotel or condo.

    I would do it if the numbers made sense, but they do not. I’m looking forward to your future articles, Lazy Man.

    • Lazy Man says:


      I’m hosting no parade for you to rain on ;-). I get your point entirely. Future articles will take note of the Ebay, or resale market, price. I needed this as a primer for that kind of analysis. Without it, the article would get to be 3000 words and people would just skip it because it is too long.

      Tommy Z,

      I think you have the right idea with focusing on the maintenance fees. For comparison we pay around $1250 in maintenance fees a year. However, it sleeps 8 for 7 nights or 4 for 14 nights. It is the equivalent space of about 3 hotel rooms (counting the kitchen, living room as hotel room). The quality is also much better than most hotels I’ve been in. I’ve never seen another hotel with the types of pools and such of our timeshare. Also, the ability to cook your own food saves money. If you want to stay at a close to equivalent Marriott right next door it is going to cost you around $250 a night. So based on that analysis, take all the free timeshares they give you. (As a preview for the future article, look into the rates you can rent your timeshare out at and the profit that you’d make after maintenance fees.)

      Good point about being “out and about” on vacations. A resort in Aruba might not be a good fit for you. For others, such as myself, too much of “out and about” leaves me needing a vacation from my vacation.

  4. Tommy Z says:

    @Lazy Man:

    I certainly agree with you that the accomodations are nicer/larger than a hotel, but that is just icing on the cake for me because I do not like spending my vacations couped up in some hotel or timeshare condo. As such, there is also not much benefit or cost savings for me to make my own food vs. eating out because I pretty much eat out all the time anyway, even at home. My wife and I simply do not cook.

    Based on your cost of $1250/year for maintenance, you are spending about $90/night (4 person). While hotel rates vary from area to area, I generally have found that I can get them for around $50-65/night for average accomodations…nothing fancy, but nothing too dumpy either. Just basic accomodations (that’s all I really care about anyway). Of course, the $1,250/year in maintenance is not necessarily your only cost, as the time share company I’m sure dings you for other charges as well like the initial purchase price (the big one) plus other fees if you ever wanted to transfer ownership, special assessments, cleaning charges, etc.

    They sell you on the fact that hotel prices go up over time, so they reason to buy a timeshare now is to lock in your price….but they never disclose that the maintenance fees go up over time as well. So, you are not really locking anything in.

    I’m extremely interested in your future article about renting a timeshare for profit…mainly because I didn’t know that was possible. For example, I rented a timeshare for a week from somebody off Craigslist for $200 for the week. It was a great deal for me…but I’m sure the owners of the timeshare had to be paying more in maintenance fees than that.

    Any chance your future article(s) will discuss the secondary (used) market for timeshares?

    • Lazy Man says:

      I think you might have more difficulty getting a hotel on the beach in Aruba for $50-65 a night. I know what you are saying about getting a cheap hotel for $50-65 in general, but there’s a big difference in quality that make it not a fair comparison. You could get basic transportation in 10 year-old Civic, but I don’t know if I’d use that as a benchmark to say that Infinitys are waste of money.

      It’s not really an apples to oranges comparison, so I don’t think we can make a fair price comparison. If you only stayed at Ritz Carltons, the $90 a night would seem like a fantastic deal, right?

      The $1250 a year maintenance does take into account cleaning charges and we’ve never gotten a special assessment. If we want to transfer ownership for a week, I think it is $75 (that’s something that my wife handles). For the most part the $1250 covers it. You are right that it goes up over time and that’s not something they disclose unless you ask. In late 2004, it was $811.

      That said, I believe the books are open to all deeded owners (like us) to see where the maintenance fee money goes. In some ways, I view it as being similar to a condo association. You are paying monthly maintenance fees there too.

      I’ll try to work on the renting a timeshare for profit article, but here’s a little hint if you are super curious… go to redweek.com. You have to sign up (it’s free) to browse the listings, but if you look up the Marriott Aruba timeshares (there’s the Ocean Club and the Surf Club) you’ll see that often weeks are being sold for $2000-$2500.

      I’ll definitely look into the secondary market for timeshares… at least as it applies to Marriott, as I’d write towards what I know.

  5. […] 2. A Decision to Buy into a Timeshare @ Lazy Man and Money. […]

  6. […] Man presents A Decision to Buy Into a Time Share posted at Lazy Man and Money, saying, “A couple of days ago, I gave some details about our […]

  7. […] A Decision to Buy into a Timeshare @ Lazy man and Money […]

  8. saveddijon says:

    Timeshares are not like “normal” commodities.

    If you buy a house, you have a reasonable expectation of selling it for at least as much as you bought it for. In that sense a house can be an investment, although the resale value is not guaranteed. The same can be said for other investments.

    However, timeshares are a little different: the resale values for timeshares range from 40-60% of the value that you can buy from the developer for. True, the “retail price” of that timeshare may have been $14K and is now $19K. Wow! Gains! But when you want out, the resale value will track the “retail” value, only at a 40-60% discount. You need to hold a timeshare for a long time just to get your principal back.

    Therefore, timeshares do not make a good investment from a strict financial sense. They may be “right” for you if they offer you the vacation you want in the location you want for a better price than can be done otherwise.

    Want an investment? Buy a REIT.

    Want a timeshare? Investigate the used market and avoid the sales pitches.

    (Yes, I own a timeshare.)

  9. Eric says:

    Definitely interested in the follow-up post, and I hope the follow-up comments are just as good. Tommy Z and saveddijon make some really good points. I agree with saveddijon, timeshares should never be viewed as investments. I hope Lazy Man can make a good case for renting, and there may be a good case considering the resort and the location. Too many people get caught up in the investment sales pitch and end up with a timeshare that is difficult to rent and impossible to sell.

  10. […] Man and Money’s Decision to Buy a Timeshare years ago. A few friends of mine own timeshares with varying experiences, and it seems to have been […]

  11. […] really important. In November, the family slipped away to Aruba for two weeks. I've written about our timeshare and how to wave money in Aruba not just that once, but twice. I'm still not sure if Marriott […]

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