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Here's my dilema: I've always believed that timeshares are a waste of money, primarily due to the fact that theyou are restrictive, have constant and rising maintenance fees, and are often a headache.
That said, I just met a ln older couple in a diamond resort in Florida that's trying to get rid of theirs (shocker! )
They have 45k points a year with a current Maintenance fee of $7000 a year.
A week in Florida translates to 2000 points. A week in a NY resort is about 5000 points. A week in Cabo San Lucas is 3000 points....just to give you some perspective. So we are talking about 10 or 12 weeks a year for life. And you can pass it on to family after death. And you can let family and friends use it.
Oh, and you can use 20000 points a year to pay all the maintenance fees, leaving you with 24k points or 5 or 6 weeks I guess.....
He wants to sell it for $50k. I guess assuming that I can get a week for about $1k on average at these resorts without having the timeshare, simple math would say that my ROI is about 9 years.
Am I correct in my assumptions? Am I overlooking something?
There is no good financial argument to be made for getting a timeshare or any other vacation "club". If you are looking in the real estate forum I assume you are smart enough to understand that there is ZERO real estate tax advantage. If you are part of the rare "deeded co-op" style vacation development (which would be ONLY for a single unit and NOT something that as described spans different locations...) you would owe property taxes on that unit which are likely deductible -- http://budgeting.thenest.com/timesha...ble-32096.html
The above link also treads into the area of "business uses" and this is an area that can get people into LOTS of problems REALLY fast -- the IRS has all kinds of templates of past violators and if your "tax reporting profile" fits that of other folks that they've had successful judgements againsts be prepared to GET AUDITED. If you do not have the detailed records to back up every time you entertained a business client at your timeshare be prepared to have that deduction disallowed and pay back taxes, penalties, and refilling fees. Ouch!
The other side of the coin is that other "fun stuff" makes no financial sense either -- "a boat is a hole in the water into which money is thrown" jumps out. If you like fishing or water skiing or sailing or just running over the waves with horsepower the costs to do so more of lifestyle choice than a financial one... I know a guy that has a "track car" that spends 310 days a year in a garage, that costs him more than many people make in a year. The 55 days he runs it around the track are worth it to him... I myself probably spent more than $30k on youth sports, made no financial sense whatsoever but the kids I enjoyed and I have some great memories...
Go look at the number of people desperately trying to sell their timeshares. Or even giving them to anyone willing to pay the maintenance fees. You will see they are a huge mistake.
My brother inherited a timeshare. He has found that he can never get availabilities at the "good" locations. Just because it's listed as a certain point rate, doesn't mean it's available when you want it.
> timeshares are a waste of money, primarily due to the fact that theyou are restrictive, have constant and rising maintenance fees, and are often a headache.
No. The main reason timeshares are undesirable is because they are virtually impossible to sell, or in many cases even to give away.
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