Timeshare
Las Vegas Vacation Ownership red week peak season
Westgate Planet Hollywood
TIMESHARE
FREQUENTLY ASKED QUESTIONS
What
is timeshare?
Timeshare is a concept that was started
decades ago. It is a way for people to
own their vacation property for only the amount of time they need it. For instance, if you purchased a vacation
home and only used it 2 weeks per year, what would happen on the other
50 weeks
each year? Well, you would still pay the
expenses and yet have a vacant property.
And you could only use that property in the location you bought
it. So, if you bought it in
Are
there different types of timeshare? Yes
there are. The most common are:
1)
A vacation club. With most vacation clubs you purchase a
limited
number of vacations. Some are for a
limited
number of years. What happens when you
have used up that limited number? You
have to buy one all over again. It’s
just as if you had only rented the property.
Sometimes a developer requires the timeshare to be done as a
vacation club, sometimes it’s a regulation
of the region in
which it is located.
2)
A points system. On a points system, you can purchase a
certain number of points on the promise that those points can then be
exchanged
for different types of vacation activities.
Unfortunately, most owners of points systems find that their
points are
subject to inflation. One couple showed
me how the points they bought had been subject to 50% inflation in only
3
years! So when they bought timeshare in
2001, they were told they would have to pay another 50% in 2004 if they
wanted
to keep the benefits they thought they had originally purchased in 2001. Imagine if you bought a house for $100,000 in
2001, how would you feel if the former owners told you in 2004 that
either you
paid another $50,000 right now or you couldn’t use the home full time
any
more?
3)
Deeded timeshare. Deeded timeshare is most like your home. It’s yours as long as you choose to own
it, and you don’t get charged more if inflation hits, you just have
more
equity. The deed will show you a
specific unit number and a specific week.
That way you know that what you purchased can not be sold to
someone
else. Most people appreciate that because the property is deeded, it
may be
bequeathed to heirs.
Will
a timeshare work for me? That
depends upon your situation. For instance,
if you pay an average of $150 per night for the hotel rooms you stay
in; just
one week means $1050. Now if you plan to vacation the next 30 years, that comes to $31,500.
Even if you thought the cost of rooms would
only triple in 30 years, that still means a
grand
total of $94,500. And you will never
get a penny of that back.
However,
if you found a timeshare that cost
say, $45,000, you immediately notice a savings compared to $94,500. Even more than that savings is the fact that
if you purchased a timeshare that was deeded, it would be tied to a
piece of
real estate and thus subject to increased equity due to inflation. Now obviously, nobody can guarantee a profit
anywhere on any real estate. Anything
can happen to even your home that would make your home a total
unrecoverable
loss. You can buy property in
What
do they mean by a deeded property? True
property ownership with deed recorded in the same county where the
property
exists. This type of property has the same rights of ownership accorded
to it
as other deeded real estate. The owner
can sell, rent, bequeath, or giveaway the property.
Do
they make financial sense? In
answering this question, most folks look to the answer for “Will a
timeshare work for me?” If you
look at that answer above, then look at the fees involved such as
trading fees
and annual maintenance fees. I’ve
heard of some maintenance fees of $1500 a year.
If you have maintenance fees that high, and your week of
timeshare cost
you $80,000, but you ordinarily only spend $100 a night for your
vacation and
you only see yourself vacationing 1 week a year for another 5 years, it
probably will not make financial sense.
True, you may buy in a place that appreciates wildly and you may
end up
doubling your investment. I
wouldn’t count on it in 5 years though.
When
I buy one, what should I buy? When
you buy two things to consider are
1)
Will I
vacation here every year? (most likely
not—you’ll probably want some variety) and
2)
What kind of
places do I want to trade to?
The
old rule of thumb is “You
can only trade down—you can
never trade up.” While there are rare exceptions to that rule,
living by that rule brings much more frequent satisfaction in your
purchase. When you purchase for an
eventual trade (which is over 90% of potential buyers) keep these
factors in
mind:
1)
How many
bedrooms does it have?
2)
Is it a 5 star
or is it less?
3)
Is it red week
(highest season), yellow week (medium season), or green week (lowest
season)?
4) How high is the demand in the area?
After
all if two areas each have 25 million
visitors a year but one area has 90 timeshare resorts and the other
area has 9
timeshare resorts, obviously the area with 9 resorts will have a much higher demand factor. When
you buy a timeshare, you want to start
as close to the top as you can afford in each of those areas. The best option is to buy in a resort that
places you at the top of at least 3 of those areas.
This makes it FAR easier to trade for exactly
what you want when you want it.
When
I buy a timeshare where should I buy? Buy
in an area where everyone wants to travel to.
Especially if that area doesn’t have an
excessive amount of timeshare resorts.
This allows you to much more easily get what you want when you
are
trading your week.
What
are lockouts? Lockouts
are rooms where 2 or more bedrooms can be split into separate
weeks of usage. A 2 bedroom may become 2
weeks of a one bedroom or it may be 1 week in a 2 bedroom unit. In other words, the lockouts can be used in a
modular basis – either together or separately.
How
flexible are they? That
depends on what and where you purchase.
Most people are better off with floating weeks (where you can
stay on
most weeks out of the year and you are not limited to just one
particular
week), and of course if you have purchased a 5 star, red week, high
demand
area, it will allow you greater flexibility on where you can trade to.
Are
there any other benefits? That
depends upon your timeshare that you purchase.
Some give you added benefits like discounts on airfares, rental
cars,
tours, restaurants, movie tickets and more. Even discounts you can use
in your
own home town!
For
any questions, simply email to: rocky@redweektimeshare.com