I recently made the mistake of telling a friend that I had just bought a Timeshare; you know a week of vacation time at a resort that I can use for my family vacations and exchange to go to other resorts almost anywhere in the world that the mood takes me.
“You bought… What? Was his startled reply.
For the next two hours we had a heated debate on the pro’s and cons of owning a vacation home as opposed to just booking whatever is available at the time you wish to travel.
The conversation went something like this!
“How much did it cost you” was Roger’s first question?
“$26,000.00 for the title and deed to a two bedroom villa on the beach front, which gives me and my family two weeks vacation every year – forever.” I replied.
“Ok,” he said, “but what about the on going fees. What does it cost you every year? Aren’t there all kinds of annual fees associated with your ownership?”
“Absolutely,” I replied. “This may surprise you but I wouldn’t have considered it if there hadn’t been!”
“Why so?” he exclaimed.
“Well it’s quite simple really… some years ago I purchased a holiday home in the Blue Mountains just outside Sydney Australia. The cost of maintaining it was enormous – the swimming pool alone cost us over $2,000.00 a year to maintain and service. I estimated it cost us over $5,000.00 a year for upkeep, property taxes etc. When we sold it some 5 years after purchasing the property we showed a small profit but after deducting our annual outgoings and legal fees etc and taking into consideration that we spent no more than 4 weeks a year there, our vacations had cost us about $2,000.00 a week! I visited the property last year on my return to Australia for a holiday and the property was totally in disrepair! I couldn’t believe it!”
“The cost of maintaining real estate continues to grow at an alarming rate. With my ‘timeshare’ I am only paying my portion of the annual cost, a cost by the way that is monitored by my resort home owners association of which I am a member! I think it works out at about $850.00 per year”.
“Sure…but you have to pay this whether you go on vacation or not?” Roger said.
“Absolutely; I want to be assured that if my children or my children’s children return there in 10, 20, or more years that the place looks as good then as it did the day I bought it. Not like my Australian property which was so badly run down that you wouldn’t put your worst enemy in there.”
“Can you sell it?” he asked.
“Good question” I replied “There is nothing to stop me from selling it but the chances of doing so are almost impossible…people like to buy from the developer; easy finance, all sorts of bonuses and no surprises! Anyway I also have the opportunity to rent it if I don’t want to use it, and I can also bank it for up to three years if I am planning a long vacation. You can bet if we don’t use it, one of our family members certainly will” I laughed.
” Yes, I can see that , but surly you can get a pretty good vacation for $850.00!”
“You think so? My 14 days in a luxurious villa with all the comforts of home, a fully equipped kitchen, and remember the children have their own room, and the cost works out at $70.00 a night!”
” Assuming we sell it in 10 years and only get back what we paid for it, we have had fantastic vacations at a fraction the normal cost and even more important, the choice of thousands of unbelievable resorts around the world. Moreover we know in advance the standard and cleanliness is assured and the security is heightened as the occupants are all known and registered owners at a resort somewhere in the system.”
I got the impression Roger wasn’t convinced, however when I rang him the following week and invited him to join us on the Costa del Sol in Spain for his holiday this year, there was no hesitancy in his acceptance.