Original Message:
Determining resale market value (by Patrick D.):
ken1193 wrote:patrickd79 asks, in relevant part: >> 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.<<First off, developer sales weasels are pathological liars, so don't believe a single word they say --- not now, not ever. If their lips are moving, they are probably lying and if you don't see something overtly expressed in writing within the contract, then it most likely doesn't even exist at all. The sales weasels want to make a sale, and telling you the truth does not help (or in any way factor into) that particular objective...
There is really and truly no clinical, mathematical "one size fits all" or "rule of thumb" answer to your question. In my personal opinion, you really cannot and should not consider "payback period" as being a particularly important or relevant factor in a timeshare purchase. It's not at all like real estate investments and it may actually never show a MONETARY payback at all! Values can (and do) skyrocket or plummet with surprising speed. Maintenance fees will always increase. You have to examine whether your purchase is actually something you want to and will actually use, can afford, or can EASILY rent out when you can't use it. Unless you own a prime week in a high demand location and season, you can NEVER really assume rental as being a sure thing. Moreover, rental rates can and do change, and the cheapest one advertised as available at your resort / week instantly becomes the standard of reference and comparison for shoppers. Moreover, people can often rent "last call" or "extra vacation" weeks --- quite possibly at your your resort and in the very same week you own --- directly from one of the exchange companies for just a few hundred dollars (i.e., much less money than an owner's annual maintenance fee amount)! Buying a timeshare just to exchange it or to rent out is, in my opinion anyhow, truly a fool's errand, unless you are somehow able to purchase a prime week in a highly desirable U.S. mainland location at a reasonable price.
Just my two cents' worth, to take or ignore as you may see fit. Whatever you do, don't ever lose sight of the indisputable fact that it's almost always much easier to "buy now" than it will ever be to "sell later"....
What I was getting at is that I currently rent a house in the same area. I am trying to determine if buying a timeshare there makes financial sense versus just renting. If the cost of the rentals would exceed the purchase + maintenance fees after a given point it may make sense to just buy. I am wondering if there is a realistic timeframe in which that break even point should occur.