Like many first time buyers, we never intended to purchase a timeshare. In fact, it was the last thing on our minds when we took a weekend trip to Orlando about ten years ago. A last-minute purchase of tires for our car had eaten into our vacation budget, so we signed up for a tour of a local timeshare resort with the idea of getting a free meal and four free tickets to Universal Studios. We promised each other that we wouldn't buy a timeshare, but once we saw the comfortable accommodations at the resort and compared the two-bedroom unit with the less than spectacular run down hotel we were staying in, we reconsidered and listened to the sales pitch with open minds and a large degree of caution.
Yes, we were excited that we would be able to prepare meals in our own kitchen instead of dining out, and we loved the location (near all the parks!), the amenities, and the screened porch overlooking a lake. But there were other more important things to consider before we signed on the dotted line.
Based on our experience, we urge you to do your homework and know what you're buying before you commit to a purchase of a timeshare. Ask yourself these questions:
1) Which destination would I visit most often?
For us, it's Orlando because it is so close to home. No matter how much spending money we have, we always know that we can have a vacation away from home for the price of groceries and gasoline. Before you purchase a timeshare, pick a vacation spot you genuinely like and that you can get to easily.
2) How much would I use the unit?
If you don't want to visit the same resort each year, would you be willing to travel to another destination if a timeshare swap was available? Our resort has multiple destinations across the United States, but we can also trade for units owned by other resorts both in the U.S. and abroad by using our membership in Interval International.
3) Be familiar with the different levels of ownership. Determine exactly what you are buying.
• When you own fixed time, you purchase the unit for use during a specific week of the year.
• If you own a biennial unit, you can only use the resort every other year.
• Floating time allows you to use the unit within a certain season of the year, reserving your time in advance. Confirmation of the unit is usually based on a first-come, first-served basis.
• Fractional ownership means you buy a large share of time, usually up to 26 weeks.
• Are you buying a deeded unit, or are you buying into a points-based vacation plan or vacation club? When you purchase into a vacation club, you purchase a certain number of points that you can exchange for the right to use at one or more resorts. The number of points you need to use for an interval vacation varies according to the length of the stay, the size of the unit, the location of the resort and when you want to use the unit.
• Know what interval you are purchasing. When you purchase a timeshare, you are purchasing the "right to use" a unit for a particular period of time and for a specific number of years. Each unit is divided into intervals (determined either by weeks or the equivalent in points). Sometimes you own a specific unit, but at some resorts you may occupy a different unit every year.
4) What is the trade value of the unit I am purchasing?
When speaking of timeshares (not vacation club membership), location is always the key. If you plan to trade for high demand or international resorts, you need to own in a high demand year-round resort yourself. In example, Orlando and Las Vegas are destinations that are considered "red" all year long. That means they have no problem filling units, so your "red" unit can easily be swapped for "red resorts" worldwide. Some resorts are seasonal, and their highest value is based on the time of year you own the unit. An example of a seasonal unit would be a timeshare at a ski resort. If you own a seasonal unit, you might not be able to trade for a "red unit" during the month you prefer to travel.
5) How many people can this unit accommodate and what kind of facilities does it offer?
A studio or one bedroom unit usually accommodates 2-4 people. Not all of the smaller units have a full kitchen; sometimes they have a kitchenette with a sink, bar refrigerator, and microwave oven. Two, three or four bedroom units usually accommodate 6-10 people. These units usually have a full kitchen, more than one bathroom, and a washer/dryer in the unit.
6) Does the unit have a lock-off?
When you own a lock-off, you can occupy part of the unit and reserve the remaining space for another time of the year (or offer it for rental or exchange).
7) Can I afford this unit and is it big enough for my needs?
Take your time to think about what you are purchasing. Determine the size of unit you'll require, how much your monthly payment will be, what the yearly taxes and maintenance fees are, and how many people will be using the unit. Compare this with how much money you would be spending for the same sized accommodations if you were renting a hotel room/suite for a week, then determine how much savings, if any, you would make if you travel every year. If you like to travel a lot, a timeshare may serve your needs well. If you only travel occasionally, a timeshare may be a waste of your money unless you rent it out during periods when you are not using the unit yourself.
Remember, you have the power to negotiate. You always have control of the deal. Even if you're in love with a property, walk away from the deal if your sales agent is too pushy. You might be surprised by how he'll suddenly start seeing things your way. Be honest with the sales person. Tell him what you need and tell him what items may break the deal. If you're not getting clear answers, you're dealing with the wrong sales representative.
8) Am I allowed to rent my unit if I don't use it?
This is determined by your resort, so ask questions and read your contract. Also consider joining a swap company, like Interval International (for a yearly fee).
9) Is my timeshare interval a set week of the year, or can I purchase a "float" interval?
As mentioned before, while some timeshares are sold for a particular unit on a set week of the year, other resorts also offer float weeks. This means you can use a unit at their resort any time of the year depending on availability, and sometimes you can divide the week into 3-day and 4-day use increments. Ask about this option when you meet with the resort representative. Make sure to ask if you can request a local area exchange if you want to stay at a resort near your home resort. Local home exchanges are usually accommodated through an "internal exchange" with your home resort, but you need to know their requirements.
10) How much is the "swap fee" if I want to trade my timeshare for another week or another resort?
The current exchange rate with our interval resort is $135. That means, we pay $135 if we want to swap for another week, trade into another resort, or if we want to let somebody else use our unit. Although we don't think this is a high price to pay for a trade, you should at least be aware of any costs you will incur should you decide to make an exchange.
A note of caution regarding making your exchange…not all resorts are equal. The timeshare we own is a 5 Star resort. When we trade, we make sure to trade for a resort of equal value (5 Stars!) Recently, we had an opportunity to visit another timeshare resort that was NOT RATED because a new company had purchased the property. We were willing to visit the property to help rate the facilities for our exchange company, and because we were offered an extra week of swap time to be used within a year. For us, it was a win-win situation, because we visited a different destination and we knew we wouldn't be wasting our valuable vacation time (a good thing to know in case we didn't like the resort). Although we enjoyed our trip, we were not overly enthusiastic with the property we visited. They lacked the quality of customer service we have grown accustomed to from our home resort. They put us on the second floor when we'd requested a first floor unit (no elevator, yet we had a handicapped person with us); the room was not ready when we walked into our room; and it was very apparent that the property needed a makeover and facelift. Upon returning home, we sent in our survey card and a few weeks later we received a certificate for another week's exchange time, as promised. Still, we don't plan to visit that property again.
The true value of a timeshare isn't measured just by dollars, but also by customer satisfaction. The American Resort Development Association (ARDA) reports "consistently high satisfaction rates among (timeshare) owners, along with repeat sales to existing owners".* According to the ARDA, owner referrals account for the steady growth of the timeshare industry.
Your level of satisfaction will be influenced by how frequently you use your interval time (either at your home resort or through an exchange), and especially by how much thought you put into the purchasing process. Do your research, including online reviews by people who are familiar with the timeshare you are considering. Although we've had a great timeshare experience, it does not guarantee that you will. We personally recommend purchasing a deeded property, instead of a points-based or vacation club unit. We cannot recommend purchasing a timeshare through a real estate firm or any company that represents a resort, only because we have not had that experience. We purchased our timeshare directly from the developer and we have no complaints. Remember, you don't have to attend a seminar to visit a timeshare, and you aren't required to make any purchase at any time. We also believe that your best bet is to look at high-end properties, not mid-level hotels that represent themselves as a timeshare.
Ask lots of questions, know what you're buying, don't cave into pressure tactics, and make an informed decision before signing a contract.
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Source: * The American Resort Development Association
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