Time Share Purchase Analysis - This Deal! Not Generalization.

9 Replies

OK, so I know that time shares in general seem to be frowned upon by the general public. However, here's the skinny...

Purchase Price: $40k

HOA Fees: 1800-2000 per Year

Time: 2 Week Lock Off Premier Time

Units: Studio with mini kitchen including cook top, 1 Bedroom with full Kitchen both balconies are Ocean facing

Rents for 2500 - 4200 per Week

Thinking of purchasing for cash.  

Note: we rented similar room on same property, studio only for $2700 for 1 week

Amazing Location in Prime Vacation/Tourist area.

Would love input!

Thanks in Advance!

So, you rent it 2 weeks for $6000 total.
Less $2000 HOA
$4000/year net income on $40000 invested.

10 years to get your money back if nothing changes. 

There is no appreciation in timeshares, so when you sell it you'll have a loss. HOA fees will creep up as the time goes by and if you want to use it you won't have income for that year.

Not a good deal by any stretch.

You should look at what it costs to rent a similar unit and compare that to the cost of the timeshare with all the maintenance fees.  If the timeshare is cheaper than just renting on VRBO or similar sites, just rent.  I've looked at this and its always cheaper to just rent.  And you have much more flexibility.  But if it works for you and you will use it, go ahead.

My opinion is anything sold with the high-pressure tactics they use for selling timeshares is a bad deal.  If it was a reasonable deal, they wouldn't need these BS sales techniques.

This is in no way an investment.  It might be an OK "expensive doo-dad", but it is in no way an investment.

Is this a million dollar property? (26 x $40,000) Is $3,900 a month a reasonable HOA fee for the property? (26 x $1,800) Then are there reservation fees, etc. ?

Sorry, Let me clarify.

And yes, I may be crazy but, I am hypothetically thinking about it as investment because of the Return.

I paid $2700 for 1 week in the studio only.  There are 2 separate units.   1 has a 1 bedroom with a full kitchen.  The 2nd is a studio with a kitchenette.  

Yes multi, multi, Million dollar property 5 Star Resort. 

What if I bought one for $15k and could still rent for $3-6k per week for the two Units together?

Thanks for the input I have received already.  This is entirely new to me and I have never looked into Time Shares before.

It sounds like its an emotional buy and you're going to buy no matter what. But just don't fool yourself into thinking its an investment. There is virtually no market for time share resale, because these things are an emotional buy usually when you're traveling. If someone does buy in normal day-to-day life, they do so at deeply discounted rates because someone who made an impulse buy under the high pressure tactics wants to unload it, often times because their maintenance fees were hiked up. Also vacation rental companies will charge up to 40% to book the unit.

I have owned timeshares in various places for the better part of 25 years.  When done right it can be a great way to have great vacations at a fraction of the cost.  However, ALWAYS by resale as even the best timeshares lose 50% of their value and most 90-100%

Currently, I just own a 2 Bedroom Hyatt Week purchased for <$1000 where new units sell for $30,000 plus,  that we break down and get 2-3 weeks in a Hyatt studio at various locations.  In the past, I have owned grass huts in South Africa(Never went there) that were purchased for $25 and used at great places such as NYC, San Diego, Key West which including the maintenance fees and trade fee cost us less than $50/night

If you by low and take the time to work the system, they can be a great value

Thanks for the info and I have decided not to purchase!  What is interesting though is how the numbers workout on HIGH End Rentals!  Hard to call it an investment even by definition, since real property is allusive, ignore the word deed... any way not going down that road.

Here is what is interesting.

$1800 per year HOA (maintenance fees really)

$8k-15k for 2 weeks worth of rentals annually  = insane profit assuming you can fill the unit(s)

Like I said never really looked before but, seems like there might be money to be made. Just not my cup of tea.

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