Personal Budget Management: Buying a Timeshare
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I took advantage of one of those vacation packages offered by a timeshare company. Personal budget management is easier with a free vacation. I had just finished my first year of work and was looking forward to a nice week off. The package included a 2 day stay in Fort Lauderdale, a 3 day cruise, and a 2 day stay in Orlando. I had never been on one of these trips and I had no idea what to expect. I was excited to get away from New York for a while.
On the second day of our arrival, we were loaded on a bus to view one of the properties. It looked nice enough, but I wasn’t really interested in a timeshare at all. During the “sell”, they presented me with various facts and figures in regards to vacation inflation and how I could protect myself if I bought a timeshare now. Not only would I be protecting myself, they said, but I could “bank” my week and vacation almost anywhere else in the world. For one reason or another, I got duped into buying one. They even made me feel better for picking a $14,400 unit as opposed to a $16,900 unit. Whoopdidoo!
My home budget was in for a shock. The interest on the loan was 19.99% and they would bill my credit card — which had already had a balance on it! The monthly amount charged on the card was about $260. I thought that charge was the end of my financial commitment. I was wrong, though: towards the end of the year, I received a bill to pay for real estate taxes as well as maintenance fees, which seemed to have increased every year. My last bill was over $600. Not only that, but today if I want to bank my week and use it someplace else, I have to be a member of a vacation exchange company which has annual fees all unto itself. I also have to plan my vacation nearly a year in advance if I want to go to any remotely popular location.
I’ve paid off the loan (and my credit card) but I am trying to get out of my timeshare. Little did I realize that timeshares are a heavy buyer’s market. My timeshare has been sitting listed at about $4500 and I’m thinking about reducing it again. Next time I take advantage of a “timeshare” marketing ad, I’ll make sure to pass on the sales pitch and most likely will pitch the offer in the garbage.
Mint’s Take Away:
Timeshares are a form of vacation property ownership where the use and costs of running the resort are shared among owners. They can be a suitable purchase for some people and a very poor purchasing decision for many people. It is definitely a purchase consumers should take extra care in, as it can easily be a long term financial commitment! In the story below, our train wreck submitter shares their experiences on buying a timeshare.
Purchasing a timeshare — as with many financial decisions — should require an in-depth research before commitment. If you solely rely on the timeshare salesman’s pitch, you will surely be doing yourself a disservice.
Additional Resources:
- The Pros and Cons of Owning a Timeshare from AskMen.com
- Timeshare Pros and Cons at Redweek.com
Train Wreck Tuesdays are a weekly post of horrible financial mistakes. They are posted anonymously. Submit your story; if you’re selected, you get a free personal finance book. The best comment gets the same prize! Check out past Train Wreck stories.
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3 Comments so far
leave a commentThat is the purpose of the vacations. They do this every year. The ole bait and switch. They give couples free vacations all the time. If they just sell at least one timeshare, they already made their money back.
We did timeshare tours in Vegas, some paying $100 a tour. They was giving this money away every two hours to a new group of people.
Selling one time share a day, they made a 200% return.
I, too, was a victim of the hard-sell tactics of timeshare salespeople. We bought a 2 bedroom unit at the Grandview in Las Vegas in 2005 that we have never used. We were lured in by the Grandview staff with the offer of show tickets, which we were not even able to use that night (our last night in town). I have created a website to warn other potential buyers and help others get out of their timeshare nightmares. You can see the site at http://rcivip.com Hope it can help someone!!
It is always important to remember that buying a timeshare is not an investment in the traditional sense. The value of a timeshare is found when you use it, not simply by holding a deed for one week of ownership.