posted 05-12-2005 11:10            

He doesn't like the cost and the fact that you do not own anything. He also doesn't like the fact that you have to pay to exchange. I told him that wasn't the case with the Disney locations in Vero Beach and Hilton head, but he doesn't want to hear it. He can't see spending $15000 now (plus maintenance) for 50 years worth of vacations. He is the type that needs to see the financial benefit. (He also keeps promising me that in 10 years that we can buy a beach house, I seriously doubt he will ever do that.)

How can I change his mind? Has anyone else had to sway their significant others? Any thoughts or suggestions?

Appreciate the help!

posted 05-12-2005 11:38               

Ask for help from an experienced TUGger to find a less costly Orlando timeshare where you really will own something. If you visit there most of the time, you won't pay an exchange fee. When you do want to exchange, there are cheaper companies than II.

Now you can put the difference between the high WDW price and the one you buy toward the vacation home he is promising.

posted 05-12-2005 13:20               

As mentioned above, you can stay in some terrific resorts in Orlando for peanuts compared to Disney.

My family won't even consider a hotel room for more than a night after a decade of timesharing. I think I would try renting nice units for a year or two in his favorite vacation spots and see if you can't bring him around.

JMHO.

posted 05-13-2005 11:01               

quote:

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Originally posted by shortypots:
.... He is the type that needs to see the financial benefit...

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You say this, as if that's a bad thing!

I believe I may see it more like your husband, too. I do engineering economic evaluations for a living. I've posted many times on TUG how to quickly look at the “own a timeshare” versus “rent an equivalent condo” calculation….to make sure there is a financial advantage to owning.

A. If I buy a $4,000 resale timeshare and hope to sell it again someday for $4,000, with $450 M/F per year, you might think that my only cost is the $450 m/f….However, there is an “opportunity cost” for having $4000 tied up in the deed all the years I own it. A simple way is to assume I had to withdraw the $4000 from savings (10% yield on investments perhaps)….thus, I have lost the opportunity to make $400 per year in interest. Thus, the vacation costs me $400+$450 = $950 per week of usage.( that’s $136/night)

B. If I buy a $15,000 RTU timeshare (your DVC example), if M/F is $800/yr (I don’t know; just guessing), since the RTU is worth zero in 50 years, then my costs for a weeks’ accommodation is 10% on $15,000 = $1500 opportunity cost, plus 1/50th of the cost is used up each year = $300, plus M/F of $800 = $2600/week’s usage. That’s $371 per night!
C. Admittedly, that 10% ‘time value of money” or interest rate assumption is a personal judgement. I’ve debated TUGGERS who say “the money is hidden under the mattress and would be making zero interest, therefore I’m going to use 0% interest and $1500 per year of the cost ‘goes away’…(these folks tend to be happy to have tens of thousands tied up in a timeshare and think nothing of it; Others say passbook savings accounts at 3 or 5% or Home Equity loans at 5-6% or sometimes they say they’d take a 14% developer financing loan on the TS….that’s the number you’d use.) 10% is a good choice, IMHO...ther's risk to owning a TS (M/F go up; managemetn changes, your needs change, they're difficult to sell...haveing cash and renting each year is flexible)...your milage may vary.

Now that I’ve introduced the concept, my strongest advice is to get the best vacation you can for the money. If you can rent the equivalent of that DVC week for less than $2600, then rent. If $2600/week is a bargain compared to renting, then own it!

I’d also like to take the opportunity to point out some ‘myths’ of timeshare ownership that are showing up in your original post above (that likely have gotten in your thinking from attending a sales pitch):

A. TS sales presentations intentionally try to confuse you into mixing two completely different decisions as if there is only one decision to be made.

a. Vacation memories with your family are “priceless”. Decide to devote time, energy and money to vacation.

b. Once you’ve decided on a vacation strategy, get the best vacations you can within your household budget (if that’s via owning the TS great, if not, then rent an equivalent condo.)

B. Notice that I’m not saying compare a 2br DVC condo at $2600/week with Motel 6 for $500 per week….you compare apples to apples.(rent vs. own)

C. Don’t make the mistake of assuming you “have to have the most luxurious condo in DVC to have a vacation memory”…the salesman wants you to believe this. Some of our best vacations were cheap; tent camping in state parks. If your household budget can only afford the $950/week timeshare…go for it. If you have a generous budget that allows for $2600/week vacations in the cream of the crop 5-star TS, good for you….go for it (if owning is better than renting). I’ve attempted to buy resale TSs from folks who were enticed to buy into the $2600/yr plan and attracted to the ultra-luxurious vacations….two years’ later they can’t afford the monthly payments, let alone take that kind of vacation. They owe more on the TS than it’s worth. So, again, do some budgeting to decide what you can afford first.

D. “desperately want to buy a timeshare”…the only urgency surrounding this decision is in the 90-minute, high pressure salesroom….the “buy now or loose the deal of a lifetime spin”. There’s no urgency here. Take your time and research TUG and buy if/when it makes sense and when you and hubby agree.

E. “owning a TS forces us to take a vacation each year”. I’ve heard that many, many times and I don’t identify with it. Too often, folks overpay for a developer-priced TS to get this “side benefit”….because they’re too undisciplined to plan for a vacation and make it a priority. Choosing to make vacations a priority (see point “A” above) is ‘free’. Don’t overpay by thousands of dollars to get a false sense of “discipline”. Here’s an exaggeration to make my point: Hatrack’s Vacation Reminder Service will take your $15,000 cash today. I”ll invest it at 5% interest and give you $750 each year, if and only if you take a vacation. If you skip a vacation one year, you loose your $750. ……now, how much of a “premium” are you willing to pay to get reminded once per year?

F. “I like DVC to get reduced exchange fees”….sorry, this sounds “penny wise, pound foolish”. Decide separately if you are budgeting for the $950/week vacation or the $2600 per week vacation. Don’t decide to sign up for the $2600 vacations just because it saves $50/year on II Exchange fees.

G. I’d also comment that it’s perfectly fine to own a 50-year RTU timeshare versus a perpetual deeded timeshare. Sure, the deeded has some extra value beyond the initial 50 years (not to you, but to your grandchildren) , but from where we’re sitting today, that next 50 year has little “present worth” today. I’ve calculated the rigorous cash flow analysis of 5, 10, 20 yr RTU’s before….but at 50 years, the perpetual deed is something like 5% more valuable today than a RTU. If you need to have DVC, that’s all that’s available anyway.

H. “He also keeps promising me that in 10 years that we can buy a beach house, I seriously doubt he will ever do that….” My thoughts on this statement come from my background of volunteering at my church to teach a seminar on Biblical home finances. I teach folks how to set a budget, get out of debt and set financial goals. Sounds like you and hubby need to sit down and talk through some short and long term financial goals. I’d suggest:

a. look at your income/expenses….and what’s left over for your two goals: vacations in the next 10, 20, 50 years, and the beachouse (there may be others, as well)

b. if owning a beachhouse in 10 years is the goal, make it a commitment today! Open a savings account and start sending $X per paycheck to that goal. It may mean making a commitment to cut back in spending on entertainment/gifts/etc (again, that’s you and hubby balancing short vs. longterm goals)

c. if a luxurious Disney vacation each year is the goal, make a commitment to that. (same comments on cutting back elsewhere, balancing short/longterm goals apply as above)

d. If goal (b) and (c) can’t be achieved under the current household income, some compromising is in order. Perhaps taking the $950/yr Disney timeshare instead of the $2600/yr DVC will allow you to do both?!?!? But I’d encourage you not to think in terms of “I’ve got to lock in the DVC today before “he” squanders the vacation $$$ on something I don’t value”, and conversely I’d encourage your hubby not to think in terms of “I’ve got to keep “her” from squandering all our discretionary cash on a vacation I don’t value to protect my dream beach house”.

e. A conversation to set these mutually agreeable goals will actually save you the conflict and heartache in the future. And don’t wait 10 yrs to have that goal setting talk about whether you both want a beach house. Set that goal ASAP or time has a habit of slipping away and you have fewer choices.

Hope that helps…sorry it’s too long. Best wishes
Hat

posted 05-13-2005 15:23               

You can both have your way. Just RENT DVC (or whereever you happen to want to go) anytime you want.

You can rent condos for about the same as maintenance fees, in most cases. If you factor in a percentage of the cost, you should be there.

Email me for ideas on where to find what you want. Give me dates and locations, and I'll show you where you can get it. After 2 or 3 rentals, your husband will be convinced that renting is throwing money away, or you'll be convinced that your husband is a genius and he was right. Either way, you'll have what you wanted in the first place.

One important thing to remember is that, in a sense, all timeshares are RTU with no value in 50 years. That's because they're almost all worthless after 20 years or so. OR, you have to pay exhorbitant special assessments to keep them up.

One more point, though, regarding Disney. If you buy at Saratoga Springs, which is new, you can keep it for 5 - 10 years and get back most of what you paid, I'm guessing. The key is to sell it while Disney is still keeping the value propped up by exercising their right of first refusal at a fairly high level. Last Nov, Disney was discounting their rate to $85 per point at S.S. from their normal rate of $95. If they still have that deal, you should be able to use it for the next 5-10, and still get most or all your money back.

posted 05-13-2005 16:31               

One important thing to remember is that, in a sense, all timeshares are RTU with no value in 50 years. That's because they're almost all worthless after 20 years or so. OR, you have to pay exhorbitant special assessments to keep them up.

The main reason that could happen is if a resort has artificially low m-fs because it is not keeping up with general repairs etc in addition to not putting in enough money into a reserve fund for unforseen expenses.

I have owned at a resort since 1994. It has only gotten better and the only special assessment in this time has been for $302 for complete renovation of rooms and common areas. I doubt very many resorts will be worthless in 20 years. Its probably more likely that they will increase in value, especially beach resorts.

posted 05-14-2005 04:55               

I bought 2 on Ebay (1 for $3200 and 1 for 1500) and 1 on bidshares.com ($600) and 1 from Marriott (alot). I have no regrets. Timeshares are wonderful and we will never do hotels again. My husband took some trips to timeshares to come around, but he sure has!

posted 05-14-2005 05:52               

Let him know, that with some effort, he can rent out, or give as a present the week, which one would do, if one couldn't use it.

.............Peter

posted 05-14-2005 15:55            

I've been renting DVC points for the last 5 years and have always been able to get the accomodations I needed. For the life of me, I can't figure out why someone would buy one of these things when they can get the exact same accomodations and have more flexibility by renting. TUG members come off as being intelligent consumers however the majority of the postings I see from people claiming they good a "good deal" on a resale tells me that they did not do their financial homework. If you buy a $4000 resale with $500/yr m.f. your annual cost is around $950/yr. You can rent the exact same unit for $600-700/yr and don't have to worry about having an anvil around your neck when the thing is worthless.

posted 05-14-2005 19:17            

quote:

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Originally posted by zfw4609:
Your husband is right on this one. Besides you can rent the points for as little as $10 per point on disboards.com.

I've been renting DVC points for the last 5 years and have always been able to get the accomodations I needed. For the life of me, I can't figure out why someone would buy one of these things when they can get the exact same accomodations and have more flexibility by renting. TUG members come off as being intelligent consumers however the majority of the postings I see from people claiming they good a "good deal" on a resale tells me that they did not do their financial homework. If you buy a $4000 resale with $500/yr m.f. your annual cost is around $950/yr. You can rent the exact same unit for $600-700/yr and don't have to worry about having an anvil around your neck when the thing is worthless.

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posted 05-15-2005 10:25            

Good luck.

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JJ

posted 05-15-2005 13:49            

Opportunity Cost $4000 x 7% = $280

Maint fee/Tax = 500
RCI/exchange fees= 150 (avg)

Annual Cost= 280 + 500 + 150= $930

And this is just an initial lowball estimate. Remember, maintenance fees and taxes go up and seldom come down. In addition, a special assesment will eventually raise its ugly head.

In almost all cases these things can be rented for far less than the cost of ownership. I acknowledge that there may be individual circumstances where ownership is preferable to renting however, these instances are few and far between. Personally, I hope timeshare ownership continues to thrive. As a renter I have been able to enjoy wonderful and spacious accomodations that I could not normally afford. However, the fact that I encounter so many owners who have no idea what their annual cost of ownership is amazes me.

posted 05-16-2005 13:55               

quote:

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Originally posted by zfw4609:
Opportunity Cost $4000 x 7% = $280

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quote:

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Originally posted by Hatrack79: “opportunity cost” for having $4000 tied up in the deed all the years I own it. A simple way is to assume I had to withdraw the $4000 from savings (10% yield on investments perhaps)

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