Maximize Timeshare Ownership
The ultimate resource to understand, maximize and leverage timeshare ownership to travel in luxury accommodations on a reasonable budget.
The ultimate resource to understand, maximize and leverage timeshare ownership to travel in luxury accommodations on a reasonable budget.
There are some great bloggers and content providers out there that provide some interesting and useful information concerning travel, timeshares and related information.
I anticipate posting more of these links so that readers get get access to other perspectives on timeshares and travel from across the web.
For this particular post, I came across the following article:
The Case for Timeshares - Who Should Buy
Dr. Cory Fawcett has very similar views to my own. Timeshares are not for everyone but for those who can navigate the system and are flexible, it can be a fantastic travel too to take affordable vacations.
While I try never to spend that amount of money that he claims to spend on vacation, the truth is that airfare is expensive. That is why frequent flyer miles and credit card points are an excellent addition to timeshare ownership as it can make timeshares extremely affordable.
Another article that I came across was from Monkey Miles. I have not come across his blog before but I did come across his article on owning a Marriott Vacation Club timeshare.
While I have studied the Marriott system, I am not as versed in the Marriott system as I am with Hyatt as the ins and outs of each program require a log-in to get access to the reservation system and ancillary documents.
Here is his article on a potential rumor for the Marriott Vacation Club.
If you have not been following the news, there has been a lot of action concerning Marriott in the past couple of years. Not only did they buy Starwood to create the largest hotel chain in the world, but Marriott Vacation Club, a separate independent entity from Marriott, purchased Interval International and its portfolio of timeshare properties (Vistana, Hyatt and others).
This is creating a lot of change. Inevitably, some will be good and some will be bad but generally, there are opportunities to maximize the transition. It appears that Marriott Vacation Club owners will get a potential opportunity on August 1st.
I think that posting timeshare relating information from sources across the web can be a good way to get additional information on timeshares and travel. If you see any articles, blog posts or other information that you think it worthwhile, please send it to email@example.com.
Make sure to subscribe below!
For those of you who do not know, travel hacking is the term given to obtaining hotel points, frequent flyer miles and credit cards points for little or no out of pocket expenses and being able to convert those travel currencies into luxurious vacations for free.
It seems difficult but it can be remarkably easy. The general idea is that you sign up for credit cards for their initial bonuses, use them in order to meet the minimum spend amounts and then cancel them. You basically do this over and over with various credit cards. If you are new to this, you can easily rack up 500,000 to 1,000,000 of these travel currencies with little effort and then use those miles to travel for "free" in many very luxurious destinations.
New Credit Card Rules
While travel hacking is still abundant and possible, the credit card issuers have gotten wiser about this and have made this hobby more and more difficult.
For example, American Express has many great welcome bonuses. You use to be able to get a card, get the bonus, cancel the card and reapply and get the bonus again. It wasn't too long for American Express to figure out that this was not profitable and that these were not the type of customers that they wanted.
American Express instituted a restriction where you can only get the bonus once in a lifetime for card. Therefore, if you received the welcome bonus on a specific variant of their card, you could no longer get the bonus again. (Based on my understanding, American Express considers a "lifetime" to be 7 years).
This dealt a blow to the travel hacking community as it severely limited the amount of bonus offers that you could receive through American Express.
American Express now just released a new rule where they can deny your bonus offer if they suspect that you are gaming the system.
Here is their new language:
Welcome offer not available to applicants who have or have had this Card. We may also consider the number of American Express Cards you have opened and closed as well as other factors in making a decision on your welcome offer eligibility.
Here is a good article from One Mile at a Time discussing this.
Chase is one of the biggest players in the travel credit card space. They offer some of the best cards with some of the best bonuses. A few years ago, they got wise to "travel hacking" and instituted an internal rule called 5/24. Basically, if you opened up 5 new accounts from any bank in the past 2 year period, they will deny your credit card application, NO MATTER WHAT!
I have been subject to this rule and despite having personal relationships with Chase, a stellar credit score, a good paying job and significant assets being held with Chase, I was denied their credit cards. The reason: too many inquiries in the past 2 years.
Despite pleading to the bank through multiple different avenues, they stuck with their position.
Here is a good overview of the Chase 5/24 rule.
As bonus offers have kept going up, the various banks have also increased the annual fees for these products . They provide additional perks and benefits in exchange for these higher annual fees, but you need to use them in order to get the value.
For example, the American Express Platinum card, can offer bonuses as high as 100,000 points. The annual fee use to be a whopping $450 per year which is almost never waived. American Express has been adding various perks in order to rationalize this annual fee but has recently now raised the annual fee to $550 per year.
I think that the annual fee can actually be worth it IF you take the time to understand the perks and USE the perks. In my case, I try very hard to maximize every perk in order to rationalize the annual fee but it takes time and diligence. I imagine that there are a significant number of American Express Platinum users who do not use a fraction of those perks.
The premium credit card market has been expanding quite a lot recently. Paying $550 for year for a credit card seemed ridiculous but these types of premium credit cards are being introduced over and over.
For example, you have the Chase Ritz Carlton Card which costs $450 per year, the Citi Prestige Card which costs $450 per year, United Mileage Plus Club card which is $450 per year, the Delta Reserve card which costs $450 per year and many others.
Here is a post from the Points Guy on these premium cards.
Using your Frequent Flyer Miles and Hotel Points
Once you accumulate the various travel currencies, you get to use those frequent flyer miles and hotel points to travel anywhere* in the world. However, "anywhere" in the world generally is subject to availability, price increases, poor routing choices and various other difficulties.
You use to be able to book 330 days in advance and generally get whatever route you wanted at the lowest mileage cost. It worked well for me over the years.
In the past 5 or so years, airlines and hotel chains have gone away from this approach and now use the historical data on capacity and demand and do not release availability or low reward available this far out if they are fairly certain that they can fill those planes and hotel rooms throughout the year.
The travel currency world is constantly being devalued. Every year, airlines and hotel chains release new charts, new programs and new ideas that all have the effect of devaluing your travel currencies. Many do so without warning. Delta has even go far as to not release award charts so you do not know what the awards should cost.
Hotel chains introduce new tier structures and constantly move hotels up and down, (mostly up) in their tier categories to require more and more points.
The general saying is to earn and burn your travel currencies as the next devaluation will shortly occur.
My Credit Card Portfolio
As I stated many times before, I am a HUGE fan of credit cards and credit card points. Between my wife and I, we probably have about 30 credit cards. I use specific cards for travel, specific cards for gas, specific cards for flights and generally make sure to get the most points per transaction possible.
However, I also pay A LOT in annual fees. I have the American Express Business Platinum Card ($450), the Citi Prestige Card ($450), the Chase Sapphire Preferred ($95), the Chase Ink Business Preferred ($95), the Chase Hyatt card ($75), the Delta Platinum card, ($195) etc. and many others.
Just based on the cards mentioned above, I spend OVER $1,360 on annual credit card fees.
This seems somewhat ridiculous but each card has certain perks and benefits and I think that I get enough value out of these cards to justify the cost. However, it is hard to do. It requires a lot of time and energy, research, reviewing points blogs, searching availability, figuring out the best use of miles and hotel points, comparing different programs, etc.
I have the mind set to do it and the desire to do it. However, as the credit card issuers are getting more strict about bonuses, as annual fees continue to rise and as redemptions for hotels and flights get more expensive, it is getting to be more difficult to justify the time and effort required in order to get your "free" trip.
Comparison to Timeshares
Just based on this general overview of travel hacking, you can see that it is complicated, the "free" trips that you take are really not free, and that the rules are changing and they are not in the customers favor.
The title of this post, "are timeshares the next frontier in travel hacking?" is meant as a legitimate question.
Timeshares are extremely similar to travel currencies. I would say that they fall under the same category as a travel currency.
Instead of applying for credit cards to get a travel currency, you pay an annual maintenance fee and you can get points to use for travel.
While there are many different types and qualities of timeshares, most programs are moving towards a point based programs so when you pay your annual fee, you will receive points which can then be used to exchange into quality accommodations.
As I stated many times before, I pay about $1,200 per year in maintenance fees for my Hyatt Residence Club timeshare. In exchange, I get 2,000 Hyatt Residence Club points. I then use those points to exchange into other timeshares where I can easily get 5 weeks of travel for my $1,200 per year plus exchange fees. I have broken down the economics of timeshare ownership here.
Compared to credit cards and travel hacking, I think that my timeshare is actually a much better deal. The exchange rates for timeshares do not change as frequently and some exchange rate changes are extremely rare.
One of the biggest difference between timeshares and credits cards is the repeatability. Each year, when I pay my maintenance fee, I receive my points which can be used for travel. While in the past, I used to be able to reapply for multiple cards and get bonuses, they systems have changed and it is become harder and hard to make travel hacking through credit card bonuses repeatable.
Credit card bonuses are a great way to accumulate a lot of points and travel for "free" for a year or two. However, with the once in a lifetime rule, Chase's 5/24 and the general adversity against people gaming these systems, it is becoming harder and harder to obtain travel currencies for "free" year after year. Therefore, travel hacking has become non-sustainable if you travel multiple times per year, year after year.
Some points programs such as Marriott, Hilton and Hyatt put out annual exchange charts for their properties. They cannot devalue existing owners weeks or points as this would create a huge backlash and many times, can be restricted in doing so since timeshare owners bought into a specific system and if they materially change the offerings, point structure or usability of their timeshare, they could be forced to rescind such purchases. Rescission would be extremely detrimental to the entire timeshare industry.
In contrast to other travel currencies, devaluation is rampant and if you do not like the revisions, you change systems and loyalties. There is no contract that you sign with the travel currency providers indicating that they cannot or will not change their systems.
While timeshare programs tend to rearrange some point requirements and modify rules, generally you do not see the tremendous changes in point requirements for timeshares as you do with hotel chains.
Additionally, the external exchanges (those through RCI and Interval International) generally stay the same. I have owned a Hyatt timeshare for over 10 years and the exchange rate from Hyatt to Interval International has stayed the same the entire time.
Furthermore, Interval International and RCI do not differentiate points based on quality. It costs the same amount of points for a Four Seasons exchange as it would be the equivalent of a Motel 6. Therefore, as the systems currently are, there are tremendous opportunities to get outsized value.
I consider myself to be very well versed in the "travel hacking" space and know the ins and outs of the programs. My family and I do extremely well navigating credit cards, points, and frequent flyer miles.
Also, you know that I do quite well with our timeshares as well. I talk to many people about timeshares and the reputation of timeshares is a material hurtle to overcome. The industry has such an awful reputation that it is hard to get people to look past the negative perception and dive into the actual programs to determine if there is value.
There are so many similarities between travel currencies and timeshares. Once you understand the inner workings of the programs, you will find that there are tons of "sweet spots" in these programs, strategies to maximize ownership and use and ways to get awesome vacations for less than even your "free" vacation.
My view is that timeshares will be the new frontier in the travel hacking space.
It is a bold statement to say but the credit card programs are changing, bonus points are becoming harder to get, hotel chains are constantly devaluing their points where it can require a ton of spending or stays to accrue a "free" week, frequent flyer points are being devalued so quickly that it hard to fathom, first class redemptions are prohibitively expensive after multiple rounds of devaluations, availability is sparse during peak times, airlines and hotel chains are increasingly playing more and more games with availability such as minimum stay nights, blocking availability for one night during a peak demand week, blocking award availability for key connections to hubs and various other games all to prevent you from getting the promised value of these travel currencies.
With all that being said, travel currencies are definitely needed and I get a tremendous value out of them. However, the constant changes, devaluations, and availability issues make it harder and harder to keep up with the systems and know the best way to maximize their use.
If you read my blog, I am not shy about discussing the negative attributes of timeshares. Some of the worst attributes are the prohibitively expensive upfront costs that the developer charges, the difficulty of selling or even giving away a timeshare and availability.
My view is that if you purchase a high quality, name brand timeshare on the resale market (Hyatt, Marriott, Hilton, Four Seasons, Vistana (Starwood) for a low upfront price, where the week or points for that timeshare carry a reasonable maintenance fee, you can get tremendous value out of timeshares. Not only get you get tremendous value, but you can easily sell the timeshare once you do not want to use it anymore. The key is to get in at a low price with a high quality timeshare.
While I still will accumulate and use travel currencies through credit cards and multiple other avenues, I think that timeshares are being overlooked as a viable strategy to travel well and potentially cheaper than using other travel currencies. I am sure that many people will disagree. I am interested to hear your thoughts!
I am proud to announce the creation of The Timeshare Guru Group on Facebook!
Here is the link to it in order to join!
A blog is a great place to share information but a Facebook is a great place for readers to interact and share real time information.
I say it all the time that timeshares are complicated so I thought it would make sense to have a group dedicated to sharing information, sharing tips, sharing real time availability and discussing timeshares in general.
I have made this a closed group so only members can see posts and contribute but anyone can find the group!
I am hopeful that this group can be a great resource to share information, ask questions and find incredible exchanges.
This type of group will only work when it is active and has numerous members so please share with others who are interested in travel and timeshares!
Message from The Timeshare Guru: I am obviously a fan of travel but I am definitely also a gadget guy. Here is a guest post from Kelsey at The Lux Authority. She provides some good information on some new techie suit cases. The Lux Authority has some great information on travel, fashion and gear so I definitely encourage you to check out the site and information provided.
Sleek Travel Gear for the Tech-Setter
Luggage can be a terrific or terrible travel companion depending on its personality. We've all seen the person at the airport dragging their suitcase, wheels discombobulated and hair disheveled as they huff and puff to their gate. How does one have the ideal experience in such a hectic setting?
Gear up with the latest and greatest travel cases that function above and beyond the task of lugging around too many pairs of shoes.
Here are the four sleekest suitcases you'll want to splurge on for the smoothest travel experience.
Arlo Skye is a line of aluminum luggage founded by design engineers previously associated with Louis Vuitton and Tumi, so it's not a stretch to say these suitcases epitomize high design meets functionality. It's small enough to carry-on, big enough to never feel without. Coming in at 22.0 x 14.0 x 9.0 inches including the soundless wheels, it truly is the perfect size.
The anodized, meaning coated with metal using a chemical process, shell makes for an indestructible, impenetrable carryall. An airline-approved USB C port supplies you with a MacBook charging station, so work on the go or Netflix and chill while waiting for that delayed flight. These sell for $450-$550.
Away may be the most recognized of the bunch, with their appeal to the large millennial crowd and impressive marketing strategies, doesn't hurt that they are one of the most affordable options. Nine colors to choose from, five variations of sizes, and even an aluminum shell to vary the standard polycarbonate option.
The detachable USB charger offers a fast charge option to keep you communicating no matter the lack of outlets. The inside is hollow on either side to allow for dual-capacity packing with straps to keep your belongings secure.
Away strives for a transparent relationship between company and consumer, with a core value of giving the whole world access to better travel standards. These sell for $225-$450.
Barracuda brings an edge to the game with features unseen on any other luggage. On the innovative handle, which is called the Halo Handle and mounted on a compartment instead of the usual two-poled attachment, there's a secret compartment for storage and a retractable shelf perfect for a computer desk or a place to rest food other than the airport carpet. If the worst happens and your luggage becomes lost, fear not, Barracudas come with built-in trackers so you can see exactly where your things are traveling without you.
The soft, breathable material the suitcase is made from may not be indestructible, but the light-weight allows for easy exertion and is small enough to collapse and store anywhere. The more Barracudas you buy, the cheaper they become per unit, so the whole family can travel in style. These sell for $224-350
Samsara sells luggage for the true robo-tech entrepreneurs, with a piece that rivals the coolest briefcases full of money in those action dramas. This is the only luggage made completely of aviation aluminum alloy, so it's basically a mini airplane (please do not attempt to fly).
The suitcase is considered "smart," which means functions like notifications when the suitcase is getting away from you or if the suitcase was opened out of your sight. Additionally, there's an led light control inside the suitcase to assist you in the dark. This suitcase is still in the production process, so if you're yearning for what you've read above, pre-order to ensure manufacturing. These sell for only $60 plus shipping.
About Kelsey at The Lux Authority:
Kelsey is the Managing Editor at The Lux Authority and is trying to balance both her budget and her credit card balance. She likes to live lavish and treat herself when the opportunity allows it. She loves the newest tech, old cars, the smell of rich mahogany, and leather-bound books as well! When she isn't working, Kelsey is an avid academic, artist, stargazer, blogger, and yoga enthusiast.
Message from The Timeshare Guru: It is always good to have additional contributors to the website to provide information on topics which I am not an expert. If you are interested in writing a guest post, please reach out to me at firstname.lastname@example.org.
A big thank you to Kelsey and The Lux Authority for providing this guest post.
Here is Part II on using Interval International.
In Part I, I put together a guide on how to use Interval International for Interval Getaways.
In this guide, I wanted to put together a guide on how to exchange with Interval International.
In order to get access to either exchanges or Interval Getaways, need you to sign in to the website which is found on the top right hand corner.
As you sign in, you are brought to this screen.
This time, instead of starting with the Getaways, you click on tab "Exchanges".
Once you do that, you are brought to this screen.
Once you are hear, you are presented with a similar screen than what is provided with the Interval Getaways.
You can either search by a "single destination", "search all destinations" or by "Resort name, code or use map".
As previously mentioned, I generally choose "search all destinations" in order to make sure that all weeks and destinations are shown to me. Interval's search tool is finicky and does not always produce the same results so I try to force the system to show me everything.
Unlike Interval Getaways, Interval International allows you to search and book for two years from the date of the search rather than 18 months that the Interval Getaways allow.
Again, I try to use the broadest search possible in order to see everything. You can also narrow down the dates if you are looking for a particular week. However, if you are looking for a particular week, it is generally recommended to search for the week before and the week after just in case the system does not show you everything.
As I mentioned in the Interval Getaway guide and in previous posts, a great way to search is by using the Resort Codes. Instead of putting in one or two Resort Codes, you can put in a large list of codes for the "best" resorts in Interval International. Here is a post on this which I highly recommend using.
Everything up to this point is almost exactly the same as search for Interval Getaways. However, once you put in the specifics, the next page brings up the following.
Since this is my particular account, you can see my unit on the top, the Hyatt Beach House. You also see various exchanges. You can see that there are two line items for 2018 usage that indicates that it is exchanged and two other line items with no other information.
The two items for 2018 usage are two "request first" exchanges. Request Firsts are ongoing exchange requests which are pending but are not confirmed. The system continuously searches based on specifics entered. Here are some more details for the Request First function.
This particular screen will likely differ based on the particular type of timeshare you own (points or weeks) but the general exchange function should be the same.
Since I own with Hyatt, my weeks are hybrid weeks where I can either use the particular week or exchange it into Hyatt Residence Club points. If I convert it into Hyatt Residence Club points, I can then exchange those Hyatt Residence Club points into Interval International points.
Once I click on the "Vacation Exchange", this is the following screen.
This is one of the most important screens for exchanging. This is the exchange chart which shows you how many Interval International points are required for a particular exchange. The bigger the unit, the more points required.
Also, on the left is the TDI or Travel Demand Index. This is basically low, medium and high demand seasons.
For this search, I almost always choose 2 bedrooms for the highest demand time period (1300 points). Again, the reason for this is to force the system to show you everything.
Different Exchange Charts
For those readers who do not own a Hyatt week, this page will be different. This will either show you the particular week that you own and give you the option to exchange that week, exchange a part of that week, either a 1 bedroom and studio, or provides you with a different exchange chart.
For those readers who own other timeshares, please e-mail me (email@example.com) your screen shots of this page so that I an update these guides for multiple different timeshares.
The exchange charts are one of the most important features of a timeshare as this shows you exactly what is possible for exchanging. For example, based on the chart above, if you own 870 Hyatt Residence Club points, you can never exchange into a 2 bedroom unit through Interval International.
As an aside, Hyatt trades very favorable within Interval International which is why I can get such tremendous value. 1300 points for a Hyatt week is a very low demand week which generally can be very cheap to purchase. While Hyatt's maintenance fees will be somewhat high, a 1300 Hyatt week is a sweet spot between value and usage.
With only 1300 Hyatt Residence Club points, you will be severely restricted in trading within the internal Hyatt system where there will be many resorts where you cannot trade into a 2 bedroom unit for a week (requires more points) but you can do so within Interval International.
In order to see how various timeshare trade within Interval International, you should review the basic guides that I have put together here.
Also, here is a good overview on how various programs exchange within Interval International.
Inventory for Interval Getaways and exchanges are completely different. Even though a week may be available for purchase, it does not mean that it will be available for exchange.
When you click on the amount of points you desire to use, you are brought to this screen.
As with before, you can put in your search terms and see what exchange inventory is available.
Similar to Interval Getaways, the results show you the required amount of points required for the specific size of unit and time period.
For example, here is the current availabilty for St. Kitts and Nevis.
As you can see, there are various size rooms available and the amount of points required for the size of unit and particular season.
Again, depending on what timeshare you own, the exchanges will be different and amount of points required will be different. If you own a week based timeshare, it will only show you the units which you can exchange on a 1 to 1 basis. For example a 1 bedroom to a 1 bedroom or a 1 bedroom to a studio.
Booking the Exchange
Once you find the unit you want to exchange into, you click the "Exchange" button which will walk you through additional screens.
This shows you what you are relinquishing for this particular exchange. In this case, it is 1,100 Hyatt Residence Club points.
Additionally, it shows you the details of the room and amenities of the resort. Make sure to read the room description carefully as you want to make sure what you are getting.
On the following screen are more disclosures. Make sure to read these as there can be fees required or renovations occurring. This is the place where these types of items are disclosed.
E-Plus and Guest Certificates
Once you get to the next screen, it asks you whether you want E-Plus and/or a Guest Certificate.
E-Plus is fantastic and highly recommended. For those of you who do not know, E-Plus allows you to re-book your confirmed exchanged week for up to 3 times with no additional fee. Here are more details of this program.
If you are allowing others to use your week, they need to be on the reservation. Otherwise, problems can occur upon checking in. If you have Interval Platinum, guest certificates are free. Otherwise, it is a $59 fee.
Following this screen, you will be presented with payment options.
The exchange fee is now $199 per week.
Make sure to use the right credit card such as the Chase Sapphire Preferred or the Chase Ink Business where you will receive 2x points with the Chase Sapphire Preferred or 3x points with the Chase Ink Business as these exchange fees code as travel.
Exchanging should be fairly straightforward but the key is to understand how your particular timeshare trades through Interval International. Make sure to study the various programs and see how the exchange in the external exchanges. I find that Hyatt trades very favorably for me so I can get a lot of value for my one week by turning my one week into almost 5 weeks of vacation.
Make sure to add some comments below in case I missed anything!
As promised, here is the third part of a multiple part series on how to purchase a timeshare on the resale market.
Part 1, dealing with finding the specific timeshare, is found here.
Part 2, dealing with contracting is found here.
For Part III, the final part, I wanted to go through some various due diligence items that you need to be aware of.
While you should definitely do due diligence on the particular timeshare that you are purchasing before contracting, once you have an executed contract, you need to make sure that you know exactly what you are buying before you close. Otherwise, you can end up with something that you didn't realize or worse, undisclosed debt.
I have discussed this item before but will do so again in order to have a complete guide. An estoppel certificate is a letter drafted by the timeshare company or timeshare manager, in response to a buyers request, which states the specifics of the timeshare. The specifics should include the particular week that you are purchasing and if it is a points based program or hybrid program, the amount of points allocated for that week.
It should also state the current amount of maintenance fees for that particular timeshare and a statement that all past due maintenance fees, special assessments or other dues have been paid in full.
It will also state whether there is a mortgage with the timeshare that would need to be paid off before any transfer.
As you can see, the estoppel certificate includes some extremely important items. While the seller may state certain things, the estoppel certificate is the authoritative document that confirms what you are buying.
Read it carefully and make sure that there are no surprises.
Right of First Refusal
Again, I have written about the right of first refusal before but here is some brief information on the subject again.
The right of first refusal provides that the original timeshare company must be provided the opportunity to purchase the timeshare at the proposed price that the seller is offering the timeshare before a sale can be completed. The timeshare company can either elect to exercise its rights and purchase the timeshare from the seller for the same terms and price or waive its right and the buyer and seller can proceed with the transaction.
The timeshare companies claim that the right of first refusal is generally included in order to maintain a floor for secondary prices. This is partially true but I think that the real reason is for the timeshare companies to control the secondary market.
As I wrote about above, there are certain strategies that you should use before you submit the right of first refusal. I lost a couple of good timeshares when the timeshare company exercised their right and purchased the timeshare for almost nothing likely selling it immediately for a tremendous amount more.
An escrow account is generally an account held by an independent third party where the buyer will deposit the purchase price. Only when the escrow agent receives all the documents and confirms that everything has been executed and filled out properly, will the escrow agent release funds to the Seller. The escrow agent will also handle disbursements to any broker or other third party that may get paid out of the sales proceeds.
An escrow account is meant to protect both the buyer and seller. It is suppose to be an independent party so neither the buyer or seller will be able to manipulate any of the funds. It also highly protects the buyer so that the funds deposited will only be released upon confirming that everything is in order and the actual deed for the timeshare is filed.
Timeshares are notorious for having a lot of fraud and scams so an escrow agent is a very good idea.
A very good strategy to use is to use a credit card to deposit the funds in the escrow account. Most companies or sellers will allow you to use a credit card to purchase the timeshare.
This does a couple of important things.
(1) You can get credit card points! I am a huge fan of credit card points and any chance I get to obtain them, I do, If you are lucky, it may post as a travel expense which is generally a bonus category in most of the lucrative credit cards (Chase Sapphire Reserve, Citi Premier, Chase Ink Business, etc.)
(2) It gives you another layer of protection. If anything occurs with the purchase, you have your credit card protections to back you up. If you are mainly going to use a credit card for protection purposes, I highly recommend using American Express. American Express is notoriously customer friendly, vendor adverse, and anytime I have ever had an issue with a vendor and filed a claim, it has been ruled in my favor.
A timeshare is considered real property so in order to fully document everything, there needs to be an actual deed completed and notarized that is filed with the county where the timeshare is located.
There are many different types of deeds but the ones that you will potentially run into with timeshare purchases are quitclaim deeds or special warranty deeds.
A quitclaim deed is the least protective deed. The seller is essentially transferring whatever interest the seller has in the particular timeshare. The seller is not providing any type of warranty that they own anything or that others may have any interest in the particular timeshare.
A special warranty deed is much better than a quit claim deed in that the seller is representing and warranting that the Seller owns the particular interest being transferred and they are unaware of any other issues or claims that have occurred during the time that they owned it.
The best type of deed is the general warranty deed which provides the same protections as the special warranty deed but the seller warrants that there are no claims relating to the time period before the seller acquired the interest.
Points based timeshares may be slightly different depending on how it is structured but still likely require some public record filing. Most of the points based timeshares are structured as a Land Trust where the timeshare company sells interests in the Land Trust which is given to you as points. The owners of the Land Trust still need to be disclosed in the public records through deeds. Hybrid systems, where you own a week and you can convert that week into points, will require an actual deed.
Once the deed is transferred to your name, you are technically the owner the timeshare. However, the timeshare company will need a copy of the filed deed in order to change the name of their account and begin to give you access to using the week and/or points.
Timing can differ based on the timeshare company but for me, with Hyatt, it took about 2 weeks after the deed was recorded for an account to be set up in my name where I could actually book weeks and use my points. I would say that this a reasonable amount of time for most timeshare companies to handle the transfer process.
Buying and selling a timeshare can be a complicated process. There are legal agreements to complete, multiple parties to contact and filings in the public records.
Despite being familiar with the process, I have always used a closing company to purchase the timeshare. They make the entire process much easier and know exactly what to do. There are various timeshare closing companies out there so you need to do you homework.
I have used Greatway Services through my purchase with Sumday Vacations. If you end up purchasing a timeshare through a company, they will usually handle the closing or have some affiliate do so. This should generally be fine but make sure you understand the fees before agreeing to anything.
Here is a link to some reviews and comments on various timeshare related companies. This is a good place to start looking for reputable companies to assist with any timeshare purchase.
Also, when you negotiate the purchase agreement, you should be very clear on who is responsible for the closing costs. They can run in the thousands of dollars so make sure to negotiate this point up front!
Purchasing a timeshare is almost identical to purchasing a house. While the contracts and documents will be slightly different, it is a real estate transaction and it can get complicated fast.
Purchasing a timeshare on the resale market can save you an absolute bundle. Prices will differ depending on the timeshare that you are purchasing, but I would venture to say that the resale prices are somewhere around 50-99% of the original purchase price.
Buying resale is a great way to get a timeshare for a low initial fee. If you purchase low enough and you understand what timeshare you want and what strategies you will use to maximize its use, you can really get some great vacations for very little money.
If you are considering a timeshare purchase, I highly recommend sticking with a name brand timeshare. They tend to exchange the best, be the most desirable properties and have some secondary market value so you can sell it down the road, maybe not for a profit, but at least you can transfer it to someone else and get out of paying the maintenance fees.
In addition, if you are purchasing a timeshare, I would highly recommend using a closing company. They are simply well versed in timeshare transfers and will save you hours of frustration and could potentially save you from purchasing something you didn't expect.
Please make sure to add anything that I may missed in these resale purchase guides! Please also add any companies that you have used successfully!
I hope you find these guides useful. I'll compile these into one complete guide after comments are done to make sure that everything is included!
Pursuant to a question from one of my readers, I am putting together a basic guide on how to use Interval International for exchanging and obtaining Interval Getaways. Due to the length of the post, I will split this into two parts, Interval Getaways and Exchanging.
As I state many times, I predominantly use Interval International in order to exchange my timeshare into other timeshares as I find that I can maximize my timeshare and can get some great weeks.
While there is potentially a back door to get access to RCI, Interval International does do a check to ensure that you own the timeshare that you say you own. Without a membership, you cannot get access.
Once you have an account, you can go to their homepage and sign in on the top right hand corner.
Once you are signed in, you are brought to the main page. It defaults to Getways as shown below.
Since Interval Getaways comes up first, lets go through how to search for Interval Getaways. For those who don't know, Interval Getaways are weeks which you can reserve for cash instead of exchanging your timeshare week or timeshare points. There can be some tremendous deals here and I always pursue the availability. You can read more about Interval Getaways here and here.
As you can see in the search box, it gives you three options:
Search All Destinations
Resort Name, Code or Use Map
Most of the time, I will simply use "Search all Destinations" even if know where are I am looking. Interval's search tool has a lot to be desired and I never know if the system is really picking up all available weeks. Therefore, I try to do the broadest search possible in order to make sure that everything available is being shown to me.
The other great option is to use the "Resort Name, Code or Use Map". As I discussed in this post, you can insert numerous resort codes in this field for the "best" available timeshares and see what is available.
Interval International now lets you search about 18 months in the future. It used to be 12 months but they have changed it so you can see availability farther into the future.
My general tactic will again to do the broadest search possible and generally search for the entire time period even if I am just looking for a particular time period. The reason I do this is to make sure that the system picks up everything and also just to see what is available.
For example, if I want to go to St. Johns (a notoriously difficult spot to trade into) and I do a broad search for 18 months and St. Johns come ups in the destinations, I want to see what is available as I may plan a trip around that particular availability.
Othertimes, for holiday weeks, I try to do a specific search for that week to see what is currently available and try to plan a vacation based on that availability (if the price is right).
For this guide, I did the broadest search possible, all destinations and all time periods.
As you can see, there are A LOT of destinations that come up. Each destination is a hyperlink so you can click on the various destinations in order to see what is available.
Since Hawaii is always a popular destination, I chose Kauai, Hawaii in the search above. Here are the results.
You can see that there are some good weeks. You can expand the list by clicking the plus symbol in the left hand corner on each resort page. Also, make sure you notice the amount of pages for the results. In the bottom right hand corner, it will have the page numbers and many times there will have multiple pages. Make sure to check the other pages!
Also, make sure you notice the symbols underneath the dates. These symbols indicate the size of the room, the amount of people that can sleep in private, the total amount of people that can fit in the unit and whether it has a full kitchen, no kitchen or limited kitchen.
For example, in this example, below, the top one is for a 1 bedroom unit with a limited kitchen. It can sleep a total of 4 people both in total and in private.
The one below is a 2 bedroom with a full kitchen. It can sleep 6 people in private and a total of 8 people (this generally indicates that it has a pull out sofa in the living room).
The third one is a studio unit with no kitchen. It can sleep 2 privately but can accommodate up to 4 people.
For this example, I chose the Marriott Kauai Beach Club. You click on "Book Now" and it brings you to this page.
Once you click through, Interval provides more details on the unit and the various amenities. Make sure to read this carefully to avoid any surprises.
Also, you should note that when you click "Book Now" it takes the particular unit out of their inventory for you for 20 minutes so you need to complete the transaction within that time period. If you click off of it or let it time out, and you then decide you want it, the new search will not bring it up for about 20 minutes.
A workaround is to go through the same search process and click on any other unit like you were going to book. Once you do that, the system assumes that you are no longer interested in the previous unit and it will release it back into inventory. However, this does not always work especially with prime weeks. It can simply be that someone completed the transaction before you or took it out of inventory as you released it.
When you click through the next link, it provide you more details on the potential extra charges associated with the week.
*While I was doing this example, my search timed out and the Marriott week disappeared from inventory. The next screen shots are from different units but the information is still accurate. If you see a good week, BOOK IT as inventory changes by the second.
Again, make sure to read this page. Some resorts have multiple additional charges that you should be aware of. Additionally, for all-inclusive resorts, the charges can be in the thousands of dollars. Read about those types of weeks here.
Once you click again, you are brought to the next screen concerning Guest Certificates.
Guest Certificates normally cost $59 per reservation so that you can put the name of your guest on the reservation. If you are an Interval Platinum member, they are free which is why it is showing up as $0.00 for my booking.
The next page is the actual booking page. It shows you the actual cost for the entire week including taxes.
On the next page, it is the payment page. It also offers you the ability to obtain travel insurance. I'll have to do a follow up post on travel insurance but I never generally opt in. However, Interval Getaways are NON-REFUNDABLE and NON-CANCELLABLE. This is strictly enforced. Therefore, regardless of what comes up, you either take the trip or lose the money. Therefore, travel insurance may actually make sense in this situation but I'll dig into this deeper.
Interval Getaways can be fantastic deals. I have reserved weeks for under $200. These are generally low season weeks but $200 for a week can be fantastic. Other times, the cost of these Getaways are so affordable that I will reserve it and only use 1 or 2 days as the comparable hotel prices are more expensive than booking an entire week.
Inventory changes by the second so search often. Make sure to also use Interval Intervals app. I wrote about it here and it has been a lifesaver!
Is there anything that is missing from this guide? Make sure to leave your comments below.
As promised, here is the second part of a multiple part series on how to purchase a timeshare on the resale market.
Part 1, dealing with finding the specific timeshare, is found here.
In this post, I wanted to go through the contracting process. It is very important that all terms and conditions of the transaction are put down in writing and signed by both the buyer and seller.
Once you locate the particular timeshare that you want and both the buyer and seller have agreed upon the price, you should move to the contract stage.
In my particular timeshare purchase, upon agreeing on the price, the Seller asked me for the following information:
1. Legal Names(s) FULL MIDDLE NAMES REQUIRED FOR HAWAII
2. Are you taking title as single person, husband/wife, married as sole owner or joint tenancy.
3. Mailing address
4. Your county of residence
5. Daytime phone number
6. Home phone number
7. SEPARATE e-mail address for EACH INDIVIDUAL TO BE LISTED ON OWNERSHIP
8. Are you a current owner?_____________ Member # __________
9. Copies of photo ids for each individual to be listed on ownership
10. Recent or current bankruptcy or foreclosure? _______
11. If title is to be taken in a Trust, LLC, or Corporation you must provide a copy of the established documents.
The information above was requested in order to properly fill out the Purchase Agreement. It is good practice for the Buyer to provide this information for the Seller as the Seller will generally complete the Purchase Agreement for you to sign.
As you can see, there are personal details that will be required to complete the timeshare purchase so there has to be some level of trust or confidence in the Seller. It is generally recommended to deal with a reputable company for a timeshare purchase. There are too many scams out there concerning timeshares and financial transactions is general so be careful and do your research before providing this information or transferring funds.
Do some research on the Seller before doing anything. As previously discussed, I used Sumday Vacations and had a good experience but there are many reputable companies out there.
Purchase Individually or through an Entity?
One important item to consider before the contracting stage is the way that you will hold title to your timeshare. This can be done individually, as husband and wife or through a legal entity. The legal entity can be in multiple forms but generally a limited liability company (LLC) or a Trust can be a good way to hold title.
This is NOT legal advice but the benefits of holding title in a legal entity is that you are able to transfer ownership of that legal entity without having to inform the timeshare company / developer. For example, if I bought my timeshare through a legal entity, ABC LLC, and I then wanted to transfer it to my children, I can do so by selling or transferring the LLC. You would have to inform the developer of a potential name change on the account but this should generally avoid any transfer fees that the timeshare developer likely charges for transfer.
Also, the other potential benefit to holding title in a legal entity is to have multiple people associated with the entity.
For example, if you are a family of four, you can have all 4 family members as owners of the legal entity and therefore, can make reservations of its behalf. If the parents own a timeshare and wanted to allow your children to use it without you being there, this would generally require a guest certificate which generally costs money. If all family members are owners of the timeshare through the legal entity, guest certificates will be avoided.
The other consideration is liability. One of the downsides to timeshare ownership is that the timeshare will always have maintenance fees associated with it. Those never end and generally will continue to increase year after year. In the event that you cannot afford to pay those and you go into default, the developer will go after the legal entity and not you personally.
While this is technically true, the individual(s) associated with the legal entity will likely be dragged into any legal action but it does provide an additional barrier between you and the timeshare company / developer. Although I am not positive, it is also possible that if the legal entity defaulted and an action instituted against it for non-payment, when you lose or default (extremely likely), the developer will not be able to report the individual to the credit bureaus where it would significantly hurt your credit score.
I'll have to do a more detailed post of defaulting on timeshare fees but generally, it is NOT RECOMMENDED AT ALL, regardless of how you own it. The timeshare agreement is generally rock solid and the timeshare company / developer will likely institute proceedings to foreclose on the timeshare and it will be time consuming, costly and distracting.
Overall, purchasing through an entity can be a smart decision. There are some upfront costs and ongoing filing requirements but it can save you headaches down the road when you want to transfer it and save you some fees depending on how you intend to use it.
Once you decide on how you want to hold title to your timeshare, you will need to execute a Purchase Agreement. I have attached a template of one that I have used in the past.
The above is a decent agreement that you can use. It is not the best but the key is to get the material terms on paper. As you can see, the above contracts makes mention of a Florida statute so if the timeshare is located in another jurisdiction, that should either be removed or replaced with the applicable statute of the jurisdiction where the timeshare is located.
Make sure that the agreement specifies the amount of maintenance fees per year and if there are any maintenance fees that are past due. You should also mention who will be responsible for what during the contract phase.
As previously discussed, when I purchased my timeshare in Key West, while we were in the contracting phase, Hurricane Irma came through and caused significant damage to the resort as well as the entire area. If a special assessment was done during this time, it was important to spell out who would be responsible for it.
In Part III of this series, I will go through some more details on the process following the executed contract. Once the contract is completed, there are additional items to complete including making a deposit or depositing the purchase price in escrow, documentation requesting an estoppel certificate, going through the right of first refusal (if applicable) and getting a deed. In that part of the series, I will also discuss the pros and cons of using a closing company to assist in that process.
Overall, once you have located the particular timeshare that you want and agreed upon a price with a seller, the above contract can be used to negotiate the specific terms of the transfer. This should explain if there are closing costs and if so, who will be responsible for it, who should be responsible for maintenance fees either currently due or which could be due during the transfer process, who is responsible for any special assessments which either occur or which are assessed during the transfer as well as whether an entity or you individually will hold title to the timeshare.
Many people do purchase timeshares without the assistance of attorneys but it could be a good use of time of money to hire an attorney to review some of the documentation before committing to signing a Purchase Agreement. Purchasing a timeshare is almost the same as purchasing a home as the documentation is almost the same.
Stay tuned for Part III!
Make sure to comment below with any thoughts or comments?
The other day I was briefly talking to someone about my blog and they immediately indicated that timeshares are horrible and couldn't fathom why someone would actually own one and felt sorry for someone that actually purchased one.
I wasn't surprised by their reaction as I would say that the vast majority of the population has the same view. Many people know someone who purchased a timeshare for an exorbitant price, can never trade into the destination during the time period that they want, doesn't use it and can't sell it.
Unfortunately, this is a common story which is why I know that a blog like mine is absolutely necessary to avoid these types of stories and begin telling stories like mine.
As I stated before, one of the best ways that I can show readers that timeshare ownership is worthwhile is to show readers how I am using my timeshares and the incredible (sometimes ridiculous) values that I am able to receive.
In case you do not read this blog often, I currently own two weeks at the Hyatt Residence Club in Key West, Florida. By exchanging these weeks into points and exchanging those points with Interval International, I got tremendous value. Here is a look at some of my upcoming trips.
Economics of Exchanging
As I have discused before, here is some quick math to show you the approximate cost of these upcoming trips.
Ignoring the initial cost of these weeks, I pay about $1200 per week in maintenance fees for 2,000 Hyatt Residence Club points per week.
Therefore, for $2,400, I receive 4,000 Hyatt Residence Club Points.
Therefore, for each point I receive, I pay $0.06 cents.
Additionally, since I predominantly use my points to exchange through Interval International, the exchange fee is now $199 per exchange.
Resort Villas at Welk Resorts (San Diego, California)
The next timeshare trip that I booked will be at the Resort Villas at Welk Resorts during Thanksgiving. I was able to receive a 2 bedroom unit at the resort over the Thanksgiving holiday. This resort is located close to San Diego, California and close to Legoland, the key driving force behind getting this unit.
Cost in Points: 1,300
Cost in Dollars: (1,300 x $0.06) $780
Exchange Fee: $199
Cost per Night: ($780 + $199) / 7: About $140 per night.
While this is probably not the absolute steal that I would expect, $140 per night for a 2 bedroom unit during Thanksgiving Week in a high quality resort isn't bad. However, I generally try to do much better with my values but I can't say that this is a bad deal.
As a comparison, the resort is offering the same size unit for the same time period for about $400 per night representing a 65% discount on the retail price.
Marriott Maui Ocean Club Maui, Hawaii
The next timeshare trip planned is in Maui, Hawaii. As I did last year, we are heading there for the Christmas holiday. You can read about my "timeshare fail" here. This year, while I still am attempting to get Christmas week (extremely difficult), we were able to get into the Marriott Ocean Club for the week before Christmas and use points for the other week at the Andaz Maui (awesome resort). We were able to reserve a 1 bedroom for this week.
Cost in Points: 870
Cost in Dollars: (870 x $0.06) $522
Exchange Fee: $199
Cost per Night: ($522 + $199) / 7: About $103 per night.
As a comparison, the resort is offering the same size unit for the same time period for about $538 per night representing over an 80% discount on the retail price. Not too shabby.
Westgate Park City in Park City, Utah during Sundance Film Festival
The next timeshare trip is scheduled for Park City, Utah. I am a huge fan of Park City as it is definitely my favorite ski destination. This year I was able to score a super prime week during the Sundance Film Festival which occurs during the third week of January. I was able to get a one bedroom unit at the Westgate Park City.
Cost in Points: 870
Cost in Dollars: (870 x $0.06) $522
Exchange Fee: $199
Cost per Night: ($522 + $199) / 7: About $103 per night.
As a comparison, the resort is offering the same size unit for the same time period for about $647 per night representing over an 84% discount on the retail price. Sweet!
Marriott Timber Lodge in Lake Tahoe
The following timeshare trip is in Lake Tahoe during ski season. I was able to grab a prime ski week for the last week of February in a Studio Unit. Hopefully, this will be a good ski season as Lake Tahoe's conditions vary year to year.
Cost in Points: 430
Cost in Dollars: (430 x $0.06) $258
Exchange Fee: $199
Cost per Night: ($258+$199) / 7: About $65 per night.
As a comparison, the resort is offering the same size unit for the same time period for about $199 per night representing over an 67% discount on the retail price.
These are my current outstanding trips planned but already have plenty of other requests pending for other destinations.
As you can see, the discounts from the retail rates are completely ridiculous. Just in these four trips, the discounts range from 65% to over 84% based on a comparison of the going rates.
As I say over and over again, timeshares are not for everyone but they are far from being a scam. The key is to learn the system and maximize their use.
I would never be able to afford many of the trip above if it was not for timeshares. Even if I could afford it, I wouldn't want to spend those retail costs for these types of trips. There are better ways to travel well, cheap and in luxury and timeshares can be one of them! Timeshares simply give me the access to more vacations at reasonable rates. It is complicated but doable and the savings can be significant!
What trips do you have planned? Make sure to leave comments below.