Timeshare buyer beware
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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August 14th, 2008 at 1:55 am
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 returned from a vacation in Hawaii and these are my comments and concerns:
-I used my points to pay for a one bedroom in a “Gold Resort” category, Kahana Falls and to my surprise it was only a “Silver Resort”. I was not notified of the change nor given a refund for the difference in points.
-I paid a fee for the use of the condo at the time of booking.
-I paid membership fee of $118 August 30, 2007.
-I paid my annual maintenance fee or strata fee of $239 for the year, which is supposed to cover maintenance, electricity, power etc.
-Then to my surprise I had to pay another a fee of $114 for electricity on top of the regular charge for the use of the condo electricity at my check out time.
-By the time I was done paying all the fees for the use of one week I would have been better off renting a beach front condo for the same amount and without all the hassle of having to book 1 year in advance.
-January 1/2007 the fee went up from $239 to $276.25 this is a 17% raise.
-January 1/2008 the fee went up again another 12% to $309.
-I bought this points to ensure I could vacation in my old age as a pensioner. In the next 20 years by my retirement date this fees will be up over 320% or more? This is absolutely ridiculous and I would call it a s**m.
-I do not record voting or proxy voting to increase strata fees. Strata fee increases in BC have to be voted on by all owners.
-In August 2007 I booked another short vacation in the Okanagan and to my surprise I was not in a Resort, I was in a “Trailer Park”. There was no beach access and the Trailer park was located in a no-swim lake. This is not my kind of vacation resort.
For all these reasons I would like to have someone contact me as soon as possible to discuss the back purchase of my points or to sell them since I am not happy with the RCI system and is not going to be useful to me in the future. I am very disappointed.”
August 13th, 2008 at 12:15 pm
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.
August 13th, 2008 at 9:31 am
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.
August 12th, 2008 at 6:58 pm
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.
August 12th, 2008 at 5:31 pm
Oh more more thing, gold is always effectively leveraged by all holders because it has no yield.
August 12th, 2008 at 5:30 pm
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.
August 12th, 2008 at 4:57 pm
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 a *very* fair statement to say Canada’s fiscal house is in much much better shape than the US one. Here’s hoping our citizenry doesn’t allow a return to previous profligacy!
August 12th, 2008 at 1:37 pm
Patriotz, hard assets are not necessarily the same as leveraged assets. One can own land or gold outright.
August 12th, 2008 at 12:48 pm
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.
August 12th, 2008 at 12:30 pm
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
August 12th, 2008 at 12:27 pm
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!
August 12th, 2008 at 12:10 pm
The political forum link referred to in my last post should be this one:
http://tinyurl.com/6m4hsp
August 12th, 2008 at 12:05 pm
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?
August 12th, 2008 at 12:02 pm
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.
August 12th, 2008 at 11:59 am
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.html
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-world-factbook/geos/ca.html
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-world-factbook/geos/ca.html
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?
August 12th, 2008 at 11:34 am
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
August 12th, 2008 at 11:13 am
“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.
August 12th, 2008 at 10:59 am
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
August 12th, 2008 at 10:54 am
“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.
August 12th, 2008 at 10:53 am
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!”.
August 12th, 2008 at 10:31 am
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
August 12th, 2008 at 10:27 am
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.
August 12th, 2008 at 10:20 am
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.
August 12th, 2008 at 9:40 am
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/calgaryh.....30cea7fc46
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!
August 12th, 2008 at 8:50 am
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.
August 12th, 2008 at 8:46 am
I think that timeshares are a terrible real estate investment for the vast majority of people. I would never consider buying one. I think most people are better off staying in a hotel.
August 12th, 2008 at 7:28 am
http://www.chrismartenson.com/fuzzy_numbers
Courtesy The Big Picture, a fantastic video on (US, but we aren’t much better) official statistics: inflation and GDP are dissected to a surprising and disturbing conclusion. (Not discussed here, but just as blatantly manipulated are labour stats.) The bottom line?
GDP is overstated by 35%
Inflation is understated by 8%
The US is firmly in recession, and has been for years.
More chapters on the site I haven’t watched yet.
Anyone who cheerfully accepts the rosy numbers we are constantly bombarded with should watch this! Dave? This means you.
August 11th, 2008 at 9:00 pm
The new term for time share is “fractional ownership.” New handle but it’s the same scam.
August 11th, 2008 at 7:28 pm
I am familiar with TWO families who go for vacations on Time-Share pitches. You read it right. Not on time shares, but time share pitches. Every year they go for free 3 days to Okanagan, Las Vegas, etc…
When they first told me about it, I mocked them: “You will fail, they will put the pressure cooker on you, you will buy”.
But both families told me the same: We have been doing it for years. We go, we listen to the three hour lecture, and we have fun the rest of the time.
Neither family has bought anything in the past 6 years….
And they know it is a scam, of course…
Best regards
arit
August 11th, 2008 at 6:52 pm
maybe dave sells the time shares and has been exposed
August 11th, 2008 at 6:25 pm
bdk, STFU if you aren’t going to add anything to the conversation.
Gave me a laugh, which is more than I can say for you.
August 11th, 2008 at 3:31 pm
“Although I do know a few people who have timeshares and are very happy with them”
As do I. The question is how to tell the difference between good ones and outright scams. After all, timeshares that are great investments (supposedly because they are good deals even after the dust settles) should have little problem selling themselves, even with all the facts available and no time pressure.
August 11th, 2008 at 3:07 pm
“They won’t give you any information to take away and study, its a limited time offer you’ve got to take up right now.”
This is the one that pisses me off, as if the deal won’t be there tomorrow. If anyone says the contract can’t leave the room, they’re hiding something and liars. At that point say if you can’t look over the contract with a lawyer, the meeting is over, and thanks for your hospitality.
In fact, ask if you can take home the contract as soon as the final sales pitch starts after lunch. It’ll save you an afternoon. The other one is to have your partner faint and make a rush back to the hotel. They won’t know what hit them.
August 11th, 2008 at 3:05 pm
I think the re-sale market of timeshares out there says it all. Although I do know a few people who have timeshares and are very happy with them.
Its easy to point fingers and laugh at people who have fallen for these scams, but its another to be under their high pressure tactics, as others have mentioned.
Oh, and bdk, STFU if you aren’t going to add anything to the conversation.
August 11th, 2008 at 2:53 pm
went to one of these
economic case presented was simplistic and plain wrong to anyone who has the ability to understand compound interest
got free canucks tickets however
but they lost…
August 11th, 2008 at 2:50 pm
Timeshare presentations. They are high pressure.
I attended one with a pretend wife, (the one I attended requires married couples that own their own homes) but it turned out that my pretend wife (already registered) decided she wanted to do a different activity that day (we were on a group vacation), so I had a different person come with me to the presentation pretending to be the person who was pretending to be my common-law wife.
Needless to say, they do have a lot of interesting tactics. They don’t generally expect people to put the cash downpayments, so they break it down into monthly payments for you. I was really confused at first, and asked who was providing the financing, at which point he told me it was a 10%-interest loan. Then I explained that I thought it would be rash to make a decision so soon, as it was my first timeshare presentation and I wanted to really think about the numbers. They do go through a very wide range of tactics in a short time.
First the salesman was my friend and identified with me and shared about his life. Then his manager came over and yelled at me for being a ‘child’ because I couldn’t make decisions. Then the salesman told me that he would get a bad review since he couldn’t make the sale.
Then, when you finally get to leave, they ask you to meet with another guy who is supposedly asking for feedback. He does a soft sell where they sell you just points and no membership/downpayment anything. He was a friendly fellow this last guy, he managed to stay true to the softsell even though I wasn’t buying.
There’s also the detail they like to repeat. one-time offer. You are not allowed to come back.
Funny thing is that I went to another location (same company) the next day, and they invited me to a presentation, and I explained that I’d already been the day before. No problem! You can attend again.
All they really want is your money. “One-time” offer is a lie. When do business people ever refuse to take people’s money? There’s no such thing as a one-time offer. You can call them on it.
August 11th, 2008 at 2:47 pm
Although timeshares are usually a bad deal I don’t think its fair to say they’re ‘ponzi schemes or amway’. Just like investing in risky penny stocks is usually a bad idea it makes sense for some people, especially if they’ve done their research.
August 11th, 2008 at 2:36 pm
Agree with Jesse on this one – I’ve never been to a local timeshare pitch and I don’t know how PTP works, but I’ve been to a timeshare sales pitch on vacation in Mexico. They’ve got it down to an art. First off they usually give you something decent just for listening to their pitch, it could be a few nights stay, a free car rental, etc.
Then they usually feed you and give you all the free booze you want. They were VERY dissapointed that neither of us felt like drinking. Once they’ve got you good and tenderized they run you through a quick pitch, nice brochures, super-cheep prices showing how great it is, but usually light on the details. They make sure the price is low enough that you can sign a contract and put a downpayment on a credit card.
They do the ‘hand up’ to the manager if you’re not sold on the deal and they usually offer to sweeten the deal. They won’t give you any information to take away and study, its a limited time offer you’ve got to take up right now. I finally had to tell them there was no way I was making that decision same day and I’d be happy to consider it on my own time, but as soon as that was clear they lost interest in the push. I guess they knew that looking at the info in the cold light of day would not make the sale.
Got some good freebies though!
August 11th, 2008 at 2:28 pm
Like Aleks, I figured everyone on Earth knew “timeshare” was on par with “Ponzi,” “pyramid,” and “Amway.”
August 11th, 2008 at 2:13 pm
OT – Pop Goes the Economy (good piece from the globe)
http://www.theglobeandmail.com.....nvironment
August 11th, 2008 at 2:10 pm
Timeshare pitches are extremely seductive and high pressure. If you don’t completely trust yourself under such conditions, run (don’t walk) away. I’m sure there are some OK ones around but good luck figuring out which is which.
August 11th, 2008 at 2:02 pm
Dave, this is your cue to start arguing that timeshares, specifically P2P Timeshares, are a good investment and that we should all be buying them.
August 11th, 2008 at 2:00 pm
I didn’t realize people still bought timeshares; I thought that the word had been synonymous with “scam” for the last couple decades.