[BrandyHagz]

Can someone kind of explain this to me in 'layman's' terms?

We're considering a timeshare option but I want make sure I understand how it works.

I am confused about how you pay for one? If you make one lump sum payment, do you have to pay monthly maintenance payments?

Also, is it better to go with a timeshare company to buy or an individual?

We're considering a couple of locations - one of them is Mexico, the others are stateside.

If someone can just give me some basic 'info' on purchasing and using a Timeshare, that'd be fantastic.

[DianeS]

OK, my parents have a timeshare, so I'll take a stab at answering this.

Yes, even if you "pay" for the timeshare all at once, you'll still have maintenance fees. They may charge you monthly or yearly or on some other schedule for them.

You may also have a useage fee, meaning if you actually use the timeshare during the week (or so) that you can use it, they may charge you for that.

You may also have a transfer or exchange fee, meaning if you trade with another family so you use theirs and they use yours, they may charge you for that. (Although that may only be if you're using one of the timeshare companies for that. If you exchange privately it may be different.) Keep in mind that if you have a usage fee, that's on top of the transfer/exchange fee because your timeshare is still being used by someone on that particular week.

In addition to "location", remember to consider the "timing". A week in Mexico in July will cost a lot more than a week in Mexico in October. And a week in Mexico in July will cost a lot more than a week in the middle of Kansas in July. BOTH location and time are important. If you want to go to the same place at the same time of year for the next 5 years, it's less important to you personally. But if you will want to exchange your timeshare for someone else's occasionally (or all the time), then you will have the most options if your location and your time are both popular.

As far as using it, just make sure you have the dates and location correct, and show up! Most of the time, you check in the same way as you would at a hotel, or the same way you'd check in with a landlord to get your key. And then you go enjoy your time. Because of the maintenance staff, your place will be clean and stocked. (although what it is stocked with will vary per your agreement.) If you have a problem, there is usually a front desk or managment person to call.

I've stayed with family at timeshares at both hotel-like places, and at townhome-type places. Both did a lot of "community" stuff, so if you come at the same time every year you often get to know the people around you, for good or for bad. I hear there are stand-alone-house places, but don't have experience with that type.

Timeshares seem to be great for the type of people who WILL take a vacation somewhere nice every year. Or for the type of people who want their own nice place to stay when they visit a particular place (like a relative's town) every year. Not so useful for people like me who don't go anywhere with any sort of consistency. Because if you forget to trade your week, you're out of luck. It'll sit empty while you keep paying.

But that's where timeshare companies come in. There are companies that act just as facilitators for individuals to sell their timeshares. That's fine, you're just dealing with a company instead of an individual. Standardized paperwork and all that. But there are also companies that stock up on weeks at timeshare locations, and they assume that everyone they have is going to trade all the time.

Really those companies are "overbooking" their timeshares. There are 52 weeks per year, but maybe they sell 54 weeks. They count on one or more of those 54 families not being able to come each summer, or forgetting to call in enough time to get the week in July that they want. That sort of thing. They basically operate as paid-in-advance hotels, at which only 54 families have the right to call and reserve weeks. Doing it that way also eliminates a lot of transfer/exchange fees, since they're built in since most of the people do that every year. But you do run the chance of them not having the week you want available, since you didn't pay for a particular calendar week when you bought your timeshare. You may have to settle for a different week, or a different location. ("I'm sorry, ma'am, the third week in July in Mexico is sold out at all our locations. We have the second week in August in Mexico, or the third week in July in Puerto Rico. Would you like either of those?")

Such companies also let you "rent out" your timeshare, without trading to use another one. Say a family member gets sick and you won't use your week one summer. Tell the company, they'll find someone to use your week, and they'll essentially put some credit in the bank for you. Meaning next year you could ask for two weeks instead of your normal one week, and you'd get it. Or next year you could trade your Kansas timeshare for a Mexico one, because maybe one week in Mexico is worth two weeks in Kansas.

Or if you've used your timeshare every year, perhaps you could just throw some extra money at the company and they'll come up with an extra week for you, or a better upgrade. That's unlike buying as an individual, because as an individual you don't always know who has the week before or after you do, and it makes finding them to ask them to "rent" their week to you so you can have a longer vacation rather difficult. You may also not have access to the same variety of places that the large companies do. Although personally-held timeshares can be joined to an existing corporation, too. Not sure how that works, exactly. I just know it's possible.

But I'm starting into the complicated part I don't understand so well. But I was told to be really careful if I ever bought a timeshare, to be certain of whether I was buying an actual physical *week* on a calendar, or whether I was buying a vague piece of time that I'd still have to reserve months in advance or risk not being able to go that particular summer because all the weeks were already spoken for. There are pros and cons to both.

Same with company vs individual. My parents are through a company, so that's the one I sort of understand. Hopefully someone who bought as an individual will post so you can see that from their point of view.

But on the upside, timeshares seem really easy to sell. My parents get offers for theirs every year. Some are good offers, some would only be taken by people wanting to get rid of all the fees. So as long as you don't overpay for what you're getting, it looks like selling is always an option. I wouldn't expect to make much of a profit, but it doesn't look like much of a loss either, considering the hotel bills my parents would have had if they didn't have the timeshare.

Hope that helps!

[gnattylove]

Beware of Timeshares. They make them sound really good at the time they are trying to sell them to you then once you buy you are stuck. Timeshares are NOT easy to sell. We have been trying to sell ours for two years and no bites whatsoever. We have lowered our price several times and at this point we stand to lose quite a bit of money. We have owned our timeshare for 4 years and EVERY year our maintanance fees have gone up considerably and there is nothing you can do about it but pay it. We have a beautiful timeshare in the Bahamas but realistically, we can't afford to go to the Bahamas every year, especially now with the kids, and renting it out will give us about $200 - not even close to paying the maintenance fees. I think timeshares are a scam and they make them sound so good when they are trying to sell them to you but in my experience it is not as good as they make it seem. Just be very careful and make sure you have whatever they are promising in writing.

HTH,

[sdmama]

I have been doing a lot of research on timeshares in the last three weeks. Our family went to Hawaii for the first time this year and fell in love with it.

As a CPA, I recommend that you "run the numbers" to understand how much you will be paying based on the next 10 years, the next 20 year, etc. It may be more than you can honestly see yourself spending on an annual basis. Take into consideration both the initial cost, the financing cost if you are not paying cash up front and the annual maintenance fees.

I would never buy a timeshare new from a company. About 25-50% of what you are paying will go right to the salesperson for their commission. Buy your week on the resale market. Check out resale websites such as Timeshare Rentals, Timeshare Resales, Timeshare Ratings, and Timeshare Reviews - RedWeek.com. These prices are $1,000s less than retail, maybe as much as 50-70% less.

Based on where you purchase a timeshare, you may only get your money's worth by staying there. So look into a every other year timeshare if you think you might tire of an annual vacation in the same spot.

If you want to trade each year, consider a timeshare that is less expensive and is nearby enough that you can get perks just by being an owner. My inlaws have one in a beach town that allows them access to the pool (not that there ever use it.) Sometimes owners can get a good rate on a weekend offseason rental so you can benefit from an occasional weekend getaway an hour or so away.

Make sure that you are buying red time if you will be trading (some resorts are always red time, like Hawaii and some resorts have red, white and blue time like January in Minnesota.)

If you decide on the timeshare in Florida each summer and buy a floating week, figure out the earliest date you can book for your preferred week. You may need to be on the phone at 8am East Coast time exactly 6 months early to book the week you want. Figure that the company sold the same condo/room to 52 families and lots will want to book during summer break, Xmas break and spring break. If you know you want to travel every year in June, you may want to find a fixed week timeshare which promises you the week you want.

Finally, do a lot of online research but understand whose website you are on. There are a lot of real estate agents that have websites but they might not be giving you the straight scoop!