If I knew then what I know now…
When my wife and I got married 14 years ago, we took off to Hawaii to spend a week in Kona and a week in Kauai. Our accommodations were in a timeshare owned by my wife’s parents. Staying in a timeshare vs. a hotel made sense; we had multiple rooms, a kitchen for cooking and a BBQ outside. What more could you want? Well, staying in a timeshare does mean one thing for sure; sometime during your trip, you will be pitched on buying a timeshare also. We were no exception.
During our 2 hour timeshare presentation, we were told of the wonders of ownership, and how much money it could save vs. spending thousands every year on accommodations. We were also sold on how we could either sell it if needed, or pass it on to our children, like a summer home. We were also told that we could use our place to trade to hundreds of additional locations if we chose to. Needless to say, my wife and I, like thousands of other people, thought it sounded good. We figured we would start small and buy into 1 week every other year on a 1 bedroom place. Hey, as a bonus, they threw in an extra week for the first 10 years to make it a no-brainer.
It was not until later that we discovered the error of our ways. Doing the math and looking at the reality of the timeshare market really opened our eyes:
1. $7,500 buy in for 1 week every other year
2. Add $2,500 if you finance the transaction
3. $300 per year for maintenance fees
After 10 years, we had spent $13,000 to own a vacation that we had barely used. To top it off, our investment was worth about $3,000 on the open market. Hmmm, not the best use of our hard earned money.
The things that we did not think about were total cost of ownership, our future travel plans and alternatives to the timeshare. Total cost of ownership includes the cost of getting to a far away location for your vacation, and those darn maintenance fees, which really add up. As for future travel plans, what if we did not want to go to that condo on that island? Well, then, we were given the option to trade our place in, bank the days and use them elsewhere. Sounds easy, right? Wrong. There is actually a $300 fee associated with banking your place with the management company. Add to that, a $150 fee for each banking and switching transaction you do. Like something wrapped in aluminum foil and lost in the back of the refrigerator, this is starting to smell bad.
What could we have done? Well, one thing we could have done is saved our $13,000 plus, and swapped our home when we wanted to vacation. What? Swap your home? Yes, you heard me right. To our credit, the internet was not all that large and fast 14 years ago. Getting information was tough, and looking for a house swapping partner was a tough and inefficient process. Today, however, things are different. Companies like Sherpa Travel Exchange (http://www.sherpatravelexchange.com/) are putting together solutions to help travelers see the world for far less than was possible before. Don’t get me wrong, people have been exchanging their homes for years. The problem came from the lack of communication and ease of process needed to make it mainstream. This era of high speed and wide spread internet, along with the surge in social networking is changing the landscape. Finding a home exchange, a homestay, or a vacation rental is now easier than ever, and it will only get better. To top it off, imagine staying anywhere you want for as many nights as you want for the price you spend on a tank of gas. It is possible, see below and Lucky the Sherpa will show you how.
My wife and I have since sold our timeshare. This has freed up some cash, and opened our travel possibilities far wider than we could have had we stayed locked in to the very controlled world of the timeshare. My advice to you is, if you do not own a timeshare, keep it that way. If you do own one, then see my next piece titled “I Feel Stuck - What should I do with my timeshare?”
Darrin Underwood
Contributor
Sherpa Travel Exchange
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