Original Message:
Determining resale market value (by Patrick D.):
I am thinking of a property that is in an area we usually rent a house for 2 weeks in each year. I am wondering what is a good rule of thumb as far as equating a timeshare purchase with normal rental fees. Is there a standard as far as it should equal no more than X years of rental fees + maintenance fees? I know the marketing guys always talk about how it will pay for itself in a few years but I am wondering if there is a more realistic payback period.
ken1193 wrote:patrickd79 asks: >>How do you determine a good resale price? Do you just watch the listings for a while to try and gauge the market?<< ===============================================Listings identify the range of ASKING prices, but they don't reveal actual SELLING prices. I'd venture to say that even in the resale market, selling prices are usually at least somewhat lower than the asking prices.
One way to see actual selling prices is to review completed auctions of timeshares sold on eBay. You may not find a completed sale for the specific resort or week you are considering purchasing, but it's worth at least checking, since you'll then have a real SELLING figure to use as a current reference point. On eBay, truly worthless timeshares sell for a penny (or not at all) and timeshares with any actual market value generally sell for 10-20% less (in my observations, anyhow) than the same week would sell for via advertisement on a timeshare site (like RedWeek, MyResortNetwork, etc.) However, eBay purchases are often complicated by lots of inaccurate info posted within the auction listing and / or the mandatory use of a (sometimes incompetent) closing company identified by the seller. The BUYER should always have the right to choose and use his/her own closing company of choice, since the BUYER is the one paying those closing costs in the first place. Personally, I would NEVER accept a seller-mandated closing company unless I knew and trusted that company already from my own prior personal experience. Private sales directly with an actual owner generally seem to go more smoothly than sales by third parties or by sellers representing so-called "Postcard Companies".
If you buy, my recommendation is to decide in advance the maximum you are willing to spend to buy a week and then don't exceed that figure under any circumstances. If you have to exceed your comfort level to own a week, then you're much better off foregoing purchase at all and just renting instead. If buying, consider only weeks which are available when AND where you would actually want to (and be able to) visit. A week in an undesirable or far away location, or an off-season week, even if acquired for free, is still completely worthless (or worse, a financial burden) if you won't use it, can't rent it and/or can't sell it later. Don't buy anything just to "trade" either; in many instances these days even good deposits don't get much that's decent in exchange, with exchange companies now renting out the best deposits themselves. Bad weeks won't get you anything but OTHER bad weeks in "exchange"; you don't get "shiny gold bars" in exchange for depositing "rusty iron pipe"... Proceed with caution --- and good luck.