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Timeshare buyer beware

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With more and more noise in the media about Vancouver real estate being overpriced you may be surprised to find a local real estate investment that appears quite inexpensive by comparison – The Timeshare.  Vlad writes in to share his experience:

I’ve made a costly mistake – I bought a timeshare from Point To Point Destinations (PTP Destinations, West Coast Timeshare) in Vancouver, BC and I regret it ever since.  Check the facts before you buy a timeshare from any company to avoid making the same mistake I did.
I posted my experience and facts on this web site: TimeshareRevealed.com  Please go to the “Investment Calculator” page, it is more than just a calculator. There I share facts about the following:

•    Real cost of timeshare comparing to an investment.
•    Examples from eBay about resell value.
•    How it can be cheaper to buy for cash.
•    Maintenance fees of a timeshare comparing to a condo.
•    Transaction and other fees.
•    Assets value of the company comparing to the cost of the shares.
•    Using points for car rentals, cruises, airline tickets, entertainment and so on.
•    Limitations of  booking timeframe.
•    Unused points taken away while maintenance fees not refunded.
•    Deed and title.
•    Using RCI membership for home resorts.
•    Collections practices.
•    The right of first refusal.
•    How much of your money paid to sales representatives.
•    PROFIT 100 guide compared to audited financial statements.
•    Lack of warranties or guarantees.

I wish someone explained this to me before I bought my timeshare from Point To Point Destinations (PTP Destinations, West Coast Timeshare) in Vancouver, BC. During sales presentation I understood some of it much differently and I do not remember other important things mentioned at all. If I knew all this I would never buy it to begin with. I hope these facts will help you make your own decision.

Vlads website is at www.TimeshareRevealed.com

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intheblue

We just found this web site http://www.TimeshareRevealed.com and it is too bad that we did not know about it before we bought our timeshare from Point To Point Destinations. If we knew all the facts instead of listening to their sales presentation, we would never buy it to begin with. We are very disappointed with Point To Point Destinations (West Coast Timeshare or PTP Destinations). We sent them the following letter but there was no reply other than a short phone call telling us that there is nothing they can do about anything. ======================================= "TO: Point to Point Destinations / RCI To Whom It May Concern: Dear Sirs: I would like to bring to your attention the following points and I would like you to address it to the right person to provide me with a prompt response. I just… Read more »

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paul

Just to digress back to around comment # 18 and up: once the big players – Marriott Westin Ritz-Carlton Sheraton and Hyatt came into the timeshare market the overall quality improved. Better resorts, good reputations, sensible marketing. Just my 2 cents.

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Vlad

I hear it from time to time that some people really like their RCI points timeshare. I just wanted to distinguish between being able to enjoy staying somewhere and grossly overpaying for it, often without even knowing it. Overpaying for a grossly overpriced stay does not mean that people cannot enjoy their stay itself, especially if they do not pay attention to financial details and other facts.

So yes, to anyone who says that they enjoy it – I believe you. Just do not say that it is a good deal or a good investment which would be a lie that can be disproved in 5 minutes with a calculator.

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Bluesman

Hey thanks, Anonymous for the brilliant reply. It all makes more sense to me now, and especially since you pointed out that the World Fact Book made a mistake with the US's external debt to GDP ratio. I was wondering why it was lower than ours when all I hear about is how much in debt the US is!

Cheers.

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patriotz

Oh more more thing, gold is always effectively leveraged by all holders because it has no yield.

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patriotz

Patriotz, hard assets are not necessarily the same as leveraged assets. One can own land or gold outright.

It doesn't matter whether you own an asset outright, it's whether the marginal investor owns it outright.

Whether you paid 100% down or 0% down for your house has no effect on its future market price.

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Anonymous

External debt is (supposed to be) debt owed to foreigners, and (is supposed to) include public, private, corporate, personal – the whole ball of wax. It's a kind of like a proxy for how much influence "outsiders" may have on internal economic policy. The numbers for ex-colonist countries like UK and Netherlands can look out of whack because (1) so many of the "foreign" debt holders are actually ex-pats and (2) they have a long history of doing business overseas (doesn't explain Ireland's insane number though – what the heck is up with that?) Federal debt is much narrower and clearly defined – it's debt rung up by whoever is running the country. At least it used to be clear – the US and its "unified budget" bullshit and off-the-books "implied guarantees" can really muddle things up. IMO it is… Read more »

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islander

Patriotz, hard assets are not necessarily the same as leveraged assets. One can own land or gold outright.

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Bluesman

Here's a list of external debt by country. We don't look that well off here, but Ireland looks much worse; Macau better!

http://tinyurl.com/36xwgy

I don't know if this data can be relied upon given the varied dates of population counts and so on, and as anonymous says, the external debt definition may not be consistent.

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Bluesman

Thanks, Anonymous.

What is the difference between external debt and federal debt, if you don't mind my asking?

I see here that our country may now be back to deficit territory:
http://tinyurl.com/6rgls4

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Anonymous

The CIA factbook is using external debt instead of federal debt to arrive at its percentage even though the field is tagged as "public debt". It's wrongly labeled, but not necessarily a "wrong" number to generate – depends on what you want to compare against. By the same measure, the US number is ~100% and growing quite rapidly. It appears the "factbook" is calculating the US number differently from every other number, and that would be an actual factual error.

If this "data" is an input to policy decisions, it might go some way to explaining why US foreign policy is so bass-ackwards much of the time! 🙂

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Bluesman

The political forum link referred to in my last post should be this one:
http://tinyurl.com/6m4hsp

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Bluesman

Can someone please help me understand Canada's debt. In 2006 it appears the national debt was decreasing to 35.1% of our GDP as per http://tinyurl.com/6zebqr

Now I see that according to the CIA World Factbook our 2007 est. debt is 68.5% of GDP (or $758.6 billion) as per http://tinyurl.com/2ggugm

but someone on a political forum says the $758 billion amount refers to all Canadian debt, not just federal as per
http://tinyurl.com/6m4hsp

The debt clock is here:
http://tinyurl.com/3872cf

To be more to the point, my question is: Has our national debt level increased from 35.1% of GDP to 68.5% of GDP over the past two years?

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jesse

Bluesman, I think freako found this site already but thanks. I did a few calculations on average mortgage divided by average applicant gross income (including co-income) and Vancouver was around an average of 2.5. Interesting that Toronto areas also had high DTI ratios as well. While there may be no "bubble" in Toronto like Vancouver, it appears that there is a lot of leverage there as well.

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Bluesman

Can someone please help me understand Canada's debt. In 2006 it appears the national debt was decreasing to 35.1% of our GDP as per http://www.cbc.ca/money/story/2006/09/27/debt.htm…

Now I see that according to the CIA World Factbook our 2007 est. debt is 68.5% of GDP (or $758.6 billion) as per https://www.cia.gov/library/publications/the-worl…

but someone on a political forum says the $758 billion amount refers to all Canadian debt, not just federal as per
https://www.cia.gov/library/publications/the-worl…

The debt clock is here:
http://www.ndir.com/SI/education/debt.shtml

To be more to the point, my question is: Has our national debt level increased from 35.1% of GDP to 68.5% of GDP over the past two years?

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Bluesman

Take a look at this mortgage information site that Squidly77 from the Alberta Bubble Blog posted on Garth's site. Albertans and British Columbians seem to be heavyweights in terms of the amount of mortgage debt they are willing to take on:

http://tinyurl.com/56l7fm

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jesse

"Residential RE did ok in the 70’s here and in the US because something called “manufacturing” and “unions” kept wages ahead of inflation, which has not been the case since the 80’s"

Low LTV and DTI ratios had something to do with it too. The overleveraged are painted into a corner and the only way out is rapidly rising wages without interest rate hikes. If those wage hikes don't start appearing soon it's game over.

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Re-diculous

Bluesman #23

"Helene Begin, senior economist with Desjardins Securities, said “it is possible that poor weather conditions, particularly in central and eastern Canada, magnified the decline in construction.”

Ah ha….its that damn weather again! LOL

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jesse

"it is possible that poor weather conditions, particularly in central and eastern Canada, magnified the decline in construction"

It is also possible that excess radiation from solar flares scrambled people's brains and led to a speculative housing bubble. I'm glad to see the fees Desjardins charges are going to good use with post hoc comments like that.

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Anonymous

I really believe it is important for individuals/families to track their own spending and determine their own "inflation rate". This will also have the side benefit of identifying when hedonics and substitutions actually happen in Real Life.

Also keep in mind that having the State generate a more realistic (however one defines that – it ain't easy!) inflation number would almost certainly lead to increased levels of taxation – so it's definitely a case of "careful what you wish for!".

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Bluesman

Yahoo news from Canadian Press:

Canada's housing market cools in face of sharply slower economic growth

Canada's national economy "is flat on its back" after two straight monthly declines in employment, Sal Guatieri, senior economist at BMO Capital Markets, said Monday.

As a result, he said, people are "anxious and worried about the economic outlook," (and) "are not inclined to make big-ticket purchases like homes."

He also said the housing slowdown comes as a kind of payback after "unsustainably strong" building activity in past years and prices being "overly high for too long."

Helene Begin, senior economist with Desjardins Securities, said "it is possible that poor weather conditions, particularly in central and eastern Canada, magnified the decline in construction."

http://tinyurl.com/5r48vr

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John

Timeshares are a solid investment just like condos. It's a chance to own a vacation for life with little risk and low low costs. I own several timeshares around the world. Sometimes I sell my weeks to rich asians and rich oil patch workers.

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patriotz

Hard assets do well in times of inflation.

Really now? So why are RE and the stock market doing so badly in the US today, when even the PTB admit they are having the highest CPI inflation since the 70's.

In fact leveraged assets do badly in inflationary times because inflation leads to bear markets in bonds (i.e. higher interest rates). Residential RE did ok in the 70's here and in the US because something called "manufacturing" and "unions" kept wages ahead of inflation, which has not been the case since the 80's.

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Vansanity

Re: Timeshares – I have to question the sanity of someone who buys a timeshare in Vancouver of all places, sorry Vlad, but what we're you thinking?

Re: Inflation – They do cherry pick what's in the basket, no question.

In other news: Calgary's market has "flattened" amidst a glut of inventory, sound familiar?

http://www.canada.com/calgaryherald/news/calgaryb…

Same thing, developers trying to spin this as a great time to buy, great deals for buyers, blah blah blah.

Lots of similar articles around the country this AM. The different media centres all have a way of spelling it out. Some paint a rosier picture than others. The bottom line: There is a shift happening from pent up demand to a glut of inventory. The tide's going out!

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Dave

Inflation is understated by 8%

If you truly believed that, then you should be out buying real estate. If inflation were running at 10%+, then real interest rates would currently be -5%. The bank would effectively be paying you 5% to borrow their money. Good deal, hey? Hard assets do well in times of inflation.

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