Property

Property

words by > Lisa Ann Schreier

LEARN T SHARE

*While the timeshare industry suffers from an oft-deserved bad reputation, the benefits of these accommodations can be perfect for the right buyer.

Does the word “timeshare” conjure up images of being locked in a room for three hours with a hard-edged salesperson? Or, even worse, shelling out thousands of dollars for a tiny hotel room on a beach year after year?

Well, sit back, relax and get the real scoop on why more than 3.5 million Americans already own a timeshare. First, here’s a simple definition of timeshare: It’s a joint ownership or, in some cases, a joint lease of vacation property by several people, who take turns occupying the premises for fixed periods. You can also think of a timeshare as buying your future vacations at today’s prices.

Although many timeshare owners return to their home resort each year, one of the greatest benefits a timeshare off ers owners is the ability to trade or exchange their ownership for comparable accommodations at resorts worldwide.

So why, exactly, would anyone consider buying a timeshare? A timeshare may be for you if:

•You pay $70+ per night for 7-10 days of hotel accommodations each year.
•You plan on maintaining or increasing that level of spending for seven or more years.
•You enjoy returning to the same vacation place every year, or you enjoy seeing different vacation areas every year.
•You want more control of your vacation dollars and your accommodations for those dollars.
•You place long-term value over short-term cost.

Unfortunately, the timeshare industry has done little to improve the generally shoddy reputation that they earned back in the early days. “Bribing” consumers to come into a timeshare presentation by off ering them a cheap vacation package, discounted or free attractions or dinner show tickets, or informing them that they have “won” a vacation are still the only way the majority of timeshare resorts pitch their product.

While timeshare ownership may be a good idea for some people, there are seven things that should scream “Don’t buy!” to any potential purchaser:

1> You don’t understand what the product is, or you are not getting clear-cut answers to your questions.

2> You don’t pay at least $70 a night for your vacation accommodations.

3> You are offered alcohol at any time during the sales presentation.

4> The salesperson glosses over important information by saying things such as “…you just pick up the phone and trade your timeshare for anywhere in the world you want to go.”

5> The salesperson or anyone else involved in the transaction uses the words “free,” “perfect,” “always” or “never.”

6> You are buying your timeshare as a real estate investment. Even if your interest is deeded real estate, never confuse this with other types of real estate that typically increase in value— 99 percent of all timeshare properties DO NOT increase in value. 7> Paying for the timeshare will decrease the quality of your life.

Although the timeshare industry sadly remains locked in an early 1970s sales approach to the product (i.e., bribe the customer to come in, assault them with information for two or more hours, compare rising hotel prices to timeshare prices, ask them to buy now, bring the “closer” in to sweeten the deal or lower the price, talk again about vacation dollars, etc.), all this simply leads to annoyed consumers, who then spread true stories about their bad experiences. Many timeshare salespeople provide excellent examples of how not to sell in any industry.

Business Timeshares

That said, timeshares can be beneficial to businesses as well as vacationers. In one real-life case, Kristina M., regional sales director of a large cosmetics company, each year has four of her top salespeople attend a week-long trade show in Las Vegas and Orlando. Based on an average of $100 per night, the company’s annual accommodation spending looked like this: 10 nights x $100 = $1,000 x 4 salespeople = $4,000 per year.

The firm has been doing this for the past five years and plans on attending these trade shows in the future. Now, compare that with buying two two-bedroom timeshares in both Las Vegas and Orlando at an average cost of $14,000 each, for a total of $56,000. Not surprisingly, it seems that renting hotels would be less costly to the cosmetics company, at least in the short term. But since Kristina and her cosmetics company plan on attending these shows for years to come, owning the two timeshares is the best course.

(For simplicity’s sake, we have eliminated the maintenance and taxes, hotel infl ation and the quality and amenity comparisons between the hotels and the timeshares that Kristina and her staff evaluated before making this purchase.)

What happens if the trade show moves from Las Vegas or Orlando? The vast majority of the 5,700 timeshares around the world will allow owners to trade or exchange to other locations, a reason that 68 percent of all timeshare owners buy to begin with.

Of course, Kristina did not purchase $56,000 worth of timeshares at the end of a two-hour sales pitch. She hired an independent consulting firm to guide her through the complexities of weeks, points, fixed, fl oating, red and blue times.

Timeshares can be a terrific way to vacation and can also provide businesses with a great deal of flexibility to be a potential bottom line cost reducer. But it’s important to do your homework first, and don’t believe everything you hear from people, positive or negative.