My husband and I just bought a timeshare unit in a South African resort that we have never seen and will probably never visit. Sounds like a real boneheaded move, doesn’t it? But before you start expressing your sympathy, let me add that we think we’ve latched onto a great deal.
Unlike most timeshare investors, we didn’t buy directly from the developer. Instead, we purchased our timeshare on the resale market for a fraction of its original cost. Sure, the unit is halfway around the world from our Toronto home and it’s prohibitively expensive for us to get to, but that doesn’t matter. Thanks to a well-developed market for timeshare swaps, we can trade our timeshare for stays in resorts across North America and Europe. The bottom line: years of thrilling vacations for far less than we would spend if we stayed in hotels.
Like us, thousands of other travelers are discovering that resale timeshares can be a great deal. Given the questionable aura that surrounds the timeshare industry, this may surprise you. But let me stress that what I’m talking here are resale timeshares, not ones purchased directly from the developer. In all too many cases, buying directly from the developer means paying far more than you have to. On the other hand, if you do a bit of rummaging through the numerous timeshares put up for sale by their first owners, you can find many mouth-watering buys at big discounts.
What does that mean in practice? Well, my husband and I paid a mere $1,462 for the rights to a two-bedroom unit on a South African beach for a week in high season every year. This summer we are exchanging our week in South Africa for a week in a glam resort in Williamsburg, Va., with three pools, several restaurants, 256 acres of landscaped grounds and mini-golf for the kids. The following year we are exchanging it for a stay in a Stratford-upon-Avon manor house that’s been converted into a timeshare resort with all the amenities. The unit has a full kitchen, an elegant bedroom for the adults and a Murphy bed in the living room for the kids, so we can all relax comfortably when we’ve finished sightseeing in the English countryside.
Any way you slice it, we’re getting a bargain. The week in Virginia will cost us just $380, or about $55 a night, in exchange fees and maintenance fees. The week in England will cost $430, or about $60 a night, as international exchange fees are a little higher than those for North America. (All figures are in Canadian dollars.) That’s far less than the cost of booking a single hotel room for all of us at either location. Yes, I know we had to buy the South African timeshare, but it cost so little that even if we give it away after 10 years, it would only add about $150 to each year’s vacation cost. Even with the cost of the original timeshare factored in, we calculate that we will save thousands over the next few years compared to what it would cost us to stay in hotels. And we will enjoy far more space than we would ever have in a typical hatbox of a hotel room. Most timeshare units feature one or more bedrooms, a living room, a good-sized bathroom and a fully equipped kitchen with its own washer and dryer. That’s convenience you won’t find at even a luxury hotel.
I know what you’re thinking: but don’t timeshares have a dodgy reputation? Yes, in some cases, they do. They’ve earned their reputation because of the hardball tactics employed by some developers. These developers employ sales teams that specialize in luring innocent vacationers into “information seminars” or similar innocent-sounding get-togethers, then pressuring them to sign on the dotted line. The prices are usually astronomical, in part to cover the costs of hiring all those high-pressure salespeople.
But the industry is improving. In the U.S. alone, two million people are now timeshare owners and the growing sector is no longer the sole province of fast-buck operators. Huge brand-name companies including Disney, Marriott and Four Seasons are now involved in the business. Their presence is slowly helping to bring order to the industry, although high-pressure sales tactics and big mark-ups still exist.
Smart shoppers give a cold shoulder to developers’ sales presentations and buy only on the resale market. According to Louis Courte, marketing representative for Century 21’s resale timeshare division, “a timeshare is like a shiny new Cadillac once out of the lot, the car drops in value.” For example, Century 21’s many “hot deals” in resale sell at 30% to 60% off the developer’s price. Timeshares at the big name resorts, like Marriott, Intrawest and Disney, tend to hold more of their value, but appealing deals can be found even in those brand-name resorts. “Resale is where the bargains are,” confirms Bill Rogers, who nine years ago founded Timeshare Users Group (TUG), a volunteer organization of timeshare owners, renters and users.
What’s the difference between a resale timeshare and one that you buy directly from the developer? Other than price, nothing. In either case, you’re purchasing the right to a specific unit at a specific resort for a specific week or two of the year. You can vacation at that resort every year if you choose. Or you can swap your timeshare through an exchange organization for a timeshare somewhere else.
Consider Merge and Al Sunderji, a Toronto couple, who have bought five weeks of timeshares on the resale market over the last four years. For two weeks at the Panorama Resort in B.C., they paid $9,500 less than a third of what they would have spent for those two weeks if they had bought their shares new. The Sunderjis have had no problem exchanging their timeshare for vacations in London, Paris, Mexico and the Caribbean. “We stayed at a fabulous two-bedroom unit in St. Lucia, complete with private pool,” says Merge. “We never would have done so if we’d had to pay the resort’s luxury prices.”
A good place to start looking for similar deals is a Web site run by the Timeshare Users Group. It’s packed with articles, advice and a list of timeshare units for sale or rent by owners. EBay also has extensive listings of timeshares for sale, as does timeshares.com, timesharecheap.com and timeshare-guru.com.
A visit to any of these sites will show you a wide variety of timeshares across a range of prices. The prices reflect the time of year you want, the luxuriousness of the resort and the size of your unit. Recently an off-season week in a South Florida studio was going for $952 on the TUG site while a popular winter-season week in a two-bathroom and two-bedroom unit at a deluxe Fort Lauderdale resort was going for $6,900. Plenty of Canadian resales were available for prices beginning at about $2,795. Particularly tempting was a peak-season summer week at a one-bedroom unit in a Whistler resort for $4,900.
You should factor in some additional costs. Maintenance fees will set you back $200 to $600 a year. You will also pay a fee, in the $120 to $200 range, to join an exchange organization such as RCI or Interval International. These groups make it possible for you to exchange your unit for others all over the world. Each time you swap, you will pay an additional fee of about $200 to $250.
The precise math depends upon the specifics of the timeshare you choose, but let’s say that you’ve purchased a two-bedroom timeshare for $3,000 that you plan to use for ten years. Your cost per year is therefore $300. Typical maintenance fees, an exchange club membership and an exchange fee will add up to about $675 a year. So if you swap your unit for another equally nice unit at the location of your choice, the total cost of the week to you and your family will be $975, or $139 a night. There’s a huge saving compared to the cost of renting two bedrooms in a swanky resort hotel for the same period.
To get the best deal possible, you have to shop wisely. Here are some tips:
Time of year. The prices for timeshares at the same resort can be much lower in the low season than in the high season. If you’re in love with a given location and don’t plan to swap your timeshare during summer vacation or peak ski weeks, you may want to consider buying a week during the resort’s low season to get the lowest possible price. But if you’re planning to exchange your timeshare, it makes more sense to pay the extra and buy during high season since that gives you the greatest trading potential.
Size. Don’t buy a studio if what you really need is a two-bedroom unit. Not only will you be uncomfortable if you actually have to stay in your unit, but you’re also limiting your trading possibilities. “When it comes time to make a trade, you may rarely get offered a bigger unit than your own,” says Angelika Bullis, a timeshare owner from Winkler, Man. “But you probably won’t get it if you ask for it.”
Reputation. Resorts vary widely in the level of luxury and service they offer. Check out TUG to see if the resort you are interested in has won high praise from other timeshare owners. Top-drawer resorts receive a special designation from RCI: Gold Crown or Resort of International Distinction (RID). Also, most timeshare resales are sold by companies (rather than individuals) devoted to that particular part of the timeshare market. You can check out those companies with the Better Business Bureau or you can also post a notice on the TUG bulletin board, asking those who have had dealings with the reseller to let you know whether they were satisfied.
Location. Timeshares tend to be heavily concentrated in North American and the Caribbean, but other areas deserve your attention, especially if you are looking for a bargain. Remember that even if a timeshare is located far from your home, it can still be valuable as trading material. Timeshares in Australia, for instance, are relatively cheap and are in high demand for exchanges. That makes them attractive buys even if you can’t see yourself flying across the Pacific every year. Europe, too, has some reasonably priced timeshares that are good for trading purposes. On the TUG site, I found a week timeshare in Spain for $1,586 and a week in Holland for $2,062.
If you want to venture even further off the beaten path, South Africa is the current global champ for low-priced timeshares. Guy and Shannon Crittenden, of Toronto, are just two of the many buyers who have taken advantage of the country’s bargain-basement prices and low currency to scoop up deals on the resale market. “Do I ever intend to go to South Africa?” asks Crittenden. “No. But I can exchange my weeks there to get to the places I do want to go.”
The Crittendens bought three timeshare weeks one in a resort 15 km from Durban and the other two in a resort near Kruger National Park as well as an RCI membership for a total cost of $3,000. Maintenance and exchange fees for all three weeks come to $1,200 a year. So far, the couple and their two young sons have exchanged their South African timeshare for a summer week in New York State’s Catskills and three winter weeks in Florida at the five-star Sheraton Vistana, just minutes from Disney World. To put that into perspective, if they had booked a regular hotel room at the Vistana resort for three weeks, it would have cost them more than $6,000.
Thanks to their inexpensive timeshare, the Crittendens have said good-bye to hat-box rooms in commonplace hotels. Instead, they’re saying hello to spacious quarters in first-rate resorts. You can too. Just do your homework and start exploring what’s available in resale timeshares. I think you’ll be glad you did.
