Timeshare tales and tipsTimeshare tales and tipsDavid JonesJones, D.
Maui beach resort

It sounded too good to be true: a week in Maui at a Marriott resort, including a rental car, for only $699 for two people. Keep in mind this was pre-Sept. 11 pricing when vacationers still crowded Hawaii’s beaches. My wife and I had enough frequent flyer miles to take care of air fare, so the first day airplanes were flying after the terrorist attack, we were off.

Keta had been the first to suspect something was amiss. “This could be one of those timeshare presentations,” she recalled the night before we left. “Someone called today from the resort and said we must be sure to stop by the welcome center and pick up the packet of free discount coupons they have for us.”

A shiver went up my spine. Several years earlier we had spent an evening in hell having our arms twisted during a timeshare presentation at Lake Conroe. Even the grandfather clock prize everyone was guaranteed to receive turned out to be cardboard.

“Well, at least they will be twisting my arm in paradise,” I thought.

As promised, the rental car was waiting. Of course, getting our luggage into the Toyota Echo required several attempts. We arrived at the hotel both weary and wary.

“Two J-2 welcome packets needed at registration,” the clerk said over the telephone. “Aha!” I thought. “Here it comes.”

“Welcome to Maui,” said the wahine as she placed a lei around our necks​. “The welcome center is open until 8 p.m., so be sure to come by and pick up your packet of free discount coupons,” she said with a smile.

I couldn’t help but wonder why she had not brought the coupons with her. When I looked over my shoulder, I knew.
Across the lobby was the welcome center. It must have been three blocks long with a huge glass storefront. Inside I could see a world map with lights blinking at numerous locations. Above the map a sign proclaimed these were Marriott’s worldwide resort locations. A couple with leis around their necks sat at a desk while a well-dressed young man spoke to them. Avoiding eye contact with anyone in the welcome center, we hurried to our room.

We never did get the sales pitch. Each day we left the hotel early and returned after dinner. But we returned to a daily message on our telephone reminding us that Marriott had a packet of discount coupons waiting for us in the welcome center. Our timeshare experience of years past had left us unnecessarily paranoid. Timeshares have changed.

Brand name companies—Disney, Marriott, and Hilton—​are now active in timeshares or vacation clubs. There’s more flexibility, too. We knew owners can trade their weeks for stays at worldwide properties but only after we returned did we discover you also can trade for services such as plane tickets and cruises.

“Cruises! Did you say cruises? I knew we should have gone to the welcome center,” said Keta. She loves to cruise.

Vacation timeshares give you the right to use a vacation home for a limited, pre-planned period.  Owning a piece of resort property guarantees you an annual vacation and the chance to exchange the privilege for other properties around the world. It is an alluring dream fueling an industry that sold $8.6 billion in 2015.

Timesharing intervals have been sold in condominiums, cruise ships, houseboats, recreational vehicles, campgrounds, buses and airplanes. The latter has really picked up momentum since the terrorist attacks.

Two basic types of timeshare units are sold: fee simple, in which the buyer gets title to a fraction of the unit, and right-to-use, in which the purchaser is entitled to use the unit for a specified period but does not have ownership interest.

In a typical timesharing program, weeks (also called intervals) are offered at a golf, seaside, or ski resort at prices starting in the $16,000-$19,000 range, depending on the season, quality of accommodations, and location. Sales may be financed over several years by the developer or an outside source. Generally buyers pay a percentage of the price down and the remainder in installments. In addition, they must pay annual maintenance fees and the cost of a resort exchange program.

While many timeshare ventures have been successful, there are pitfalls. Under a right-to-use (lease) agreement, you do not have title to the property. Some timeshares are offered before construction has begun or adequate financing has been obtained. Buyers can lose their money if the project fails. Here are some timeshare tips from the Better Business Bureau.

Remember, it’s a vacation. Don’t look at a timeshare strictly as a real estate investment. Look at it like you would an expenditure for an annual vacation.

Visit the site. If you can’t, find someone you trust who can. Make sure it’s an area you like and would enjoy returning to year after year.

If a “free” inducement is offered for you to come and inspect the resort, find out if you will end up having to pay a lot of money for travel expenses and extra charges after your trip. I have been called many times and told I won a free cruise to the Bahamas. Of course, I have to get to Florida first; the cruise lasts one day; and I have to hear about a timeshare.

Remember a timeshare is a major investment. Ask questions. Do not sign anything unless you are fully aware of the consequences. Be particularly wary if salespersons pressure you to sign that day without allowing time for you to consider carefully what the contract involves.

Determine if the unit is offered as fee simple or as a right-to-use unit. Fee simple units usually are more expensive, but they may provide some tax benefits. They also allow buyers to have a voice in the resort’s management. Right-to-use units often have a lower price and less management responsibility, but resale rights may be limited.

A timeshare isn’t a one-shot deal. Find out how long-term management of the resort will be provided and whether the operating budget will meet future needs.

Offers of exchanges for other timeshares are an important consideration. But there may be no assurance the resort can provide you another accommodation that is desirable or available at the time you prefer. The resort may not continue its contract with a given exchange or with any exchange. Don’t buy a timeshare in a less desirable location expecting to “trade up.”

Timeshare owners pay maintenance costs for the resort. These annual fees usually run around $600 but will increase as the property ages. And the fee may not cover major expenses. Make certain your money is held in an escrow account until you have title to the unit.

Lastly, consider the alternatives. Carefully weigh all costs of buying a timeshare, including costs of taking a vacation every year. Can you afford the travel costs and other expenses of a vacation annually, either to your unit or to one you have exchanged for? If your timeshare is in another state or country, recovering your money in the case of a breach of contract may require traveling to the locale where the transaction took place.

For more tips on timeshares, read MarketWatch's article, "6 things to know before you buy a timeshare​."

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