So I need some of you geniuses out there with an understanding of timeshares to help me (really a friend of mine) think a decision through.
Let me first say I have read all of the DON'T DO IT warnings for timeshares and I am taking them to heart.
This weekend I found myself on vacation with a friend who booked our stay at a Vidanta timeshare that she owns. She set up a meeting with her account manager to discuss her contract and they basically started telling her they wanted to sell her an upgrade into fractional ownership.
I'm not familiar with timeshares or vacation rentals at all but, I'm sitting listening to what they are discussing and apparently the contract they originally sold her had a clause in it that they would give her an option to upgrade to an ownership on a prop they could no longer sell bc they are sold out. SO they offered her one of their highest tier properties at the lowest tier price.
So she went ahead and purchased what they claim is a $700k fractional ownership for a price of around $100k. (5 wks of usage)
She does not have maintenance fees and obviously only pays if it is used. Privately marketed rooms in the tier she is renting go for of $5000/wk on the low end. We looked on sites like vrbo, homeaway etc to confirm this.
She has 5 days to cancel and is anxious because all of the stuff you read online says stay away from timeshares. But is there a difference with fractional ownership?
Obviously they sold her the Fractional Ownership with the premise that they would increase, not decrease in value bc it is an ownership and not a membership. Also obviously they state that they make no representation about the value of renting. She has 5 days to cancel and asked my advice but I honestly have no real background in this sort of rental.
Would love to hear from anyone who has experience in renting high end vacation rentals if she really stumbled into a sweet deal or if you think it's just a complicated sales pitch.
I am not sure which property you are talking about but $100,000 seems incredibly expensive for 5 weeks. We spent spring break at a Vidanta property in Playa Del Carmen and paid only 300 for the week through a vacation reward company. My feeling is that these resorts are huge and people who can't use their weeks end up basically giving them away. Another concern I have is that my sister purchased a timeshare in Cabo and she was basically told a pack of lies to get her to buy it, much of the selling points were not true and she ended up having zero recourse when she tried to get out of it. I would say cancel.
This is a business transaction. One party ends up richer. One party ends up wiser. Take a guess who ends up richer and wiser.
It's sort of like playing poker. There is always one person at the table that is going to lose money. Everyone else at the table knows who it is. If you are at the poker table and don't know who it is, it is you.
I have about 24 STRs in this town. 82 beds total. My renters are the guys you see working on the large upright structures of steel at a petrochemical refinery. Contractors, that's my niche.
Find a unique niche, everyone and their brother come on to this site and asks the same questions as you every day.
Sorry, I read your post again. Your friend is a pooch. Your friend got screwed. $20K for a week of rental is much more than most people would buy, unless their name is Bill Gates, Carl Icahn, Sam Walton and the like.
I was hunting quail many years ago and ran into a hunting party with Sam. A person in his group said that he had a scouting report that said there were a lot of quail in this certain area of Texas. Sam and his group said they were going to the airport. They had a private jet that took them to the area of Texas where the quail were. They had bird dogs too. I'm sure the dogs flew with them.
Also if you Google this, the vast majority say it's just another sales scam.
@Crystal Dundas I'm guessing your friend is wealthy. If not, have her Google "I want to sell my timeshare" and see what you find. Check out Ebay "timeshares for sale" and see how many sellers are are trying to get rid of their so called investment for pennies on the dollar.
First a time share is not an investment. From that perspective it is a HORRIBLE DEAL.
If your friend truly wants a timeshare for personal enjoyment, then I would suggest buying any RCI points unit in the secondary market. Many people are giving these away for almost nothing just so they don't have to pay maintenance fees. Once in the points system you can trade into these units or buy them with cash for the week. And yea.... he/she is not truly getting $700k in value for $100k. Its scam.
Rule of thumb. If you're thinking about vacation rental ownership, you'll be better off buying a property outright and renting it out. Timeshares are not a sound investment. They're not an investment at all. Good luck.
Thanks all. She actually ended up rescinding the contract.