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The Truth About Time Shares
email this pageprint this pageemail usJim Moore - The Oregonian
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March 22, 2010

(Tim Lee/Oregonian)
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"Hey, want a free trip to Las Vegas? How about a hundred dollars cash? I'll even throw in some genuine crystal wine goblets. And a handsome travel bag.

"All you have to do is sit through an interesting, low-key presentation. Sixty minutes, tops."

When I first went to Mexico as a naive twentysomething Americano, I wasn't sure what made me more nervous: machine-gun-toting soldiers in the town plaza, little children pushing boxes of Chiclets in my pocket and then demanding payment for them ... or the fast-talking men, perched inside tiny alcoves along the sidewalks of Puerto Vallarta, trying to sell me a time share.

Fast forward: The day I started writing this story, twentysomething years later, a large headline in the Business section of this newspaper blared: "Nationwide time-share scam draws fines here." The lead paragraph contained the phrases "securities regulators," "complex sales scheme" and "took more than $428 million from investors."

Um, how much for the Chiclets? I'll buy two.

Somehow, time shares found their way into the same realm as used cars, "network marketing" and door-to-door vacuum sales as viable concepts that are too often appropriated by opportunistic salespeople.

The thing is, the concept of the time share makes good sense. Start with a simple version: Four families get together and buy a cabin on a river. They all get to hang out on vacation in a place they probably couldn't afford to own by themselves. All they have to do is split up the costs and decide who gets the cabin when.

But who can spend one-quarter of the year on vacation? Wouldn't it make more sense to just "buy" the week or two of time you can actually spend there? It would cost less, and you could probably get a nicer place ...

Add some swimming pools, a golf course and a couple of restaurants, and you've got a time-share resort.

Now all you have to do is sell a whole lot of shares in it. And that's where it can get sticky.

The world of time shares is a fascinating one. I've owned one for nearly 25 years, and overall have had a very positive experience. And yet I've heard the horror stories, too.

Consider two other examples and how they illustrate different ends of the continuum of time-share experiences.

John Avery of Albany went to a time-share presentation of his own accord, and he did his homework ahead of time.

"I received a mailing," he recalls. "There was no significant enticement. I did some research and was impressed with the company. And I did the sums and figured out we could save money on our vacations."

He went, he liked and he bought. He purchased points in the WorldMark system ("The price was competitive, and a very good value for the money") and he and his wife have enjoyed their membership tremendously for five years. They recently returned from a weeklong stay at Canmore, outside Banff National Park in Canada, for which Avery estimated his out-of-pocket expenses for the week at $50.

"The best things about our time share are the value for the money, the flexibility it offers us and locations in the right kind of places," he says. Avery's such a fan that he's given presentations on time shares to travel clubs.

Berry Evans of Beaverton has a different perspective.

She visited Mazatlan, Mexico, in 1997 and fell in love with the place. So much so that she bought two time shares while she was there, and another a few years later. And she was very happy - for a while.

"I really enjoyed it the first five or six years," she says. "Mazatlan is my favorite place to go, and I also traded for some gorgeous places. But then it got harder and harder to trade."

Plus, getting to Mexico was often a logistical challenge, and the travel expense added to the cost of each vacation. Over time, Evans became dissatisfied with the overall experience.

"We have too many weeks," she says. "Now that we can't easily trade them, we can't use them all." And she had signed 25-year contracts that committed her to paying annual maintenance fees.

Then she compounded one problem with another one: She worked with a time-share reseller.

On a trip to Mexico in 2008, she paid a reseller $16,000 to "take back" all her time shares. The company promised to sell her time shares and relieve her of her financial responsibility for them. But it was a scam, and she eventually sued the company. She got her money back, but only because she was willing and able to pursue legal action.

The experience has left her highly disillusioned.

"I raised my kids selling real estate; I know a little bit about selling," she says. "These people are so believable - they're good. But ... they just take your money."

So what do we have here? Avery's version, where a time share is a great way to get a more affordable vacation, maybe all over the world? Or Evans' version, where it's more like a nefarious scheme that becomes a never-ending money-grab?

The truth is, it can be either. As the disclaimers so often warn, "Your experience may vary." It comes down to a few key factors: what you want out of a time share, how well you buy, how you navigate the system, and your need for an exit strategy.

After talking to multiple people and pondering the different aspects of time-share ownership, I've created a primer for prospective time-share owners.

Setting goals

It's crucial that you have a clear goal for your time-share ownership before you look to buy. Do you want to use your time share as a springboard to see the world? Do you just want to have a place to drive to with your family every year? How long will owning a time share make sense for you?

There is an incredible array of ways time-share ownership can be structured, but there are basically two principal systems. One is to own time, usually in one-week segments, at one resort. The other is to buy into a "point system" that includes multiple properties you can visit. In either case, you'll pay a yearly fee, whether it's maintenance fees or membership dues. With points you can also typically use points for shorter or longer stays, instead of just weekly segments.

Advice: Talk this out with everyone involved. If you're older than 40 and have kids, think multi-generational. Look at your travel history and decide how a time share will best fit into everyone's vacation style. If you intend to do a lot of trading, find people who do that and ask them about their experiences. Compare points systems and week systems and decide which fits you best.

The buying process

A typical approach to selling time shares is to offer you a free vacation - often, a stay in the place they're trying to sell you a piece of - or one or more other enticements. All you have to do is attend a presentation, which of course has the sole purpose of selling you a time share. And the atmosphere is normally high-pressure, hard-sell. The salespeople want you to make a decision right there, and they'll tell you almost anything you want to hear to get that decision. This can lead to some buyer's remorse.

Advice: Some people - those not susceptible to pressure tactics - welcome the chance to score a free vacation or some swag in exchange for sitting through the presentation and then stonewalling the salesperson. But most folks aren't wired like that. The best thing to do if you attend a presentation is to research what you can ahead of time, and make your decision before you go in. If you're interested in a time share, have an idea of what you're willing to spend. If you're not, vow not to buy anything, and then don't. And if you're considering buying but don't want to make a decision on the spot, rest assured - these folks will still sell to you in a day or a week or a month. And they'll probably still offer you the same deal. (Also, consider the time-share resale market - see the note below.)

Using your time share

Once you've purchased a time share, your task is using it for maximum enjoyment. If you own a specific week at a specific place, there's little to do. But if you have a several-month season during which you can use your week, you'll need to do some planning. Then there's the whole trading option. And if you've bought into a points system, there is an entirely different set of logistics to negotiate.

Advice: Learn to play the game. Resorts and point systems have very specific rules about booking, and you'll have to figure out how to navigate them successfully. Consider weather, activities, school schedules, travel costs such as airfares, and everything else you can think of. If you want to trade your week for time at another property, you'll probably have to book at your own resort and deposit that week in a time-share bank before you can book at another resort. And if you enjoy working the system and don't mind researching, you can often find special deals with your trading vendor or your point-system management company - especially if you're looking for last-minute deals.

Selling a time share

The bad news? It's very, very hard to sell a time share, especially in a down economy. The market is flooded right now as people look to unload their discretionary financial obligations. The good news? If you're looking to buy, you're in the driver's seat.

Advice: First, don't consider your time share to have any resale value; it's not an investment, no matter what a salesperson tells you. If you're ever in a position where you need to sell it, it's going to be hard to get rid of, so don't buy one if it will stretch your budget.

Second, the resale situation means that buying a time share on the secondary market is a much better deal. Learn all you can about properties and systems you're interested in - maybe even brave a presentation at a particular resort you're interested in, but don't buy. Then when you know what you want and how it works, buy it used. You can find them everywhere from Craigslist to online reseller sites.

Quick example: I paid $12,000 for one week in a two-bedroom condo at a brand-new Central Oregon resort in 1985. A few years ago I strongly considered going in with my siblings to buy five weeks in a three-bedroom unit ... for the same $12,000.

A place for revisiting memories, making new ones

Last summer my son rode his first bike (with training wheels) on a family vacation at our timeshare at Eagle Crest, near Redmond. It was a rite-of-passage moment, something the two of us will share for the rest of our lives. That breakthrough moment is another link in a chain of memories that goes back nearly 25 years in my immediate family - all tied to that one place, a place we go every year.

When I was growing up, it was family reunions in Lake Tahoe every few summers that brought together my mother's scattered extended family. Those periodic get-togethers were important markers in the arc of my childhood. I remember the year I sailed on a catamaran with my uncle. The year I got to play golf with the adults. The year I met that girl from ... well, you get the idea.

And then my parents and I bought a time share at Eagle Crest in 1986, when the new resort was nothing but a single display condo and some big plans. We started a new tradition that I treasure. I was just out of college, and the memories are different - football in the snow, great meals, epic tennis matches and soaking in a natural whirlpool in the Deschutes - but no less important than those sun-soaked ones from childhood.

So when my wife and I started a family, we decided to extend the tradition into our little branch of the family tree. We bought our own Eagle Crest time share and set out to establish a new continuum of milestones.

We love going to new places and experiencing new things, and we do that several times a year. But there's also something comforting about that one week a year when we know exactly what to expect, when we feel at home away from home, when we can revisit familiar experiences and add new ones all in one place.

My son might not clearly recall that I rented him a training-wheel bike on our 2009 vacation - but I'll never forget that moment when he first understood the possibilities offered by a bicycle and some open road.

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