With recent disappointing timeshare news from Bloomberg and others, interest in timeshare is probably at an all-time low. While that might sound bad, none of us get involved with timeshare for short-term profits, and, as the economy recovers, interest in timeshare will return, as it has in the past. This brief lull in attention creates a unique opportunity for owners to affect real change in the timeshare market.
Below are 3 easy steps that, if owners take now, will lay the groundwork for a new and robust timeshare market, where owners dictate how our industry is perceived.
1. Fall Back in Love With Your Timeshare – Ok, so you’ve owned timeshare for a while, you’ve experienced the good, you’ve experienced the bad, your timeshare’s saved you money and it’s cost you money. Overall, surveys say you feel pretty good about being an owner, and you should. Now’s the time to go public – start talking about the good.
In this world of web 2.0, user-generated content is king. Maybe you’ve had a grudge against your resort, an exchange company, or a resale company. Maybe you’ve vented your feelings on a blog, a forum, or elsewhere. Start by deleting the negative: Aside from the release of some frustration, it hasn’t served you.
Next, contribute positive content now: If you come across a forum/blog/etc. where someone is slamming your resort (often posted by competing resort employees anyway) post a positive reply. In your spare time, post online about the things you like about owning timeshare. Let people know how great your resort’s amenities are, or how well your points system works.
I’m not suggesting you lie – If you fall into the minority (10-20%) of owners that are genuinely unsatisfied with your timeshare, why not hold your tongue and let the owners who are happy do the talking? Chances are, if you’re not happy, you want to sell. Let the conversation stay positive, and watch your resale values soar.
2. Act Now with Your HOA to Stop Give-Away Weeks – An unsettling phenomenon has been sweeping through the timeshare resale market, decimating values and demoralizing owners. In a nut shell, you can give your timeshare deed +$3,000 to a company for the privilege of walking away from your timeshare. These properties are then sold, generally in online auction sites, for pennies on the dollar. I won’t get into the reasons for this now, as they’re truly not relevant. The bottom line is that owners who give away timeshares=low resale values.
What if your HOA agreed to take paid-off units from owners that would give them away otherwise? Worst case scenario, your maintenance fees might rise slightly if the units couldn’t be sold or rented. Wouldn’t that be preferable to the alternative? The timeshare Home Owners Association is the best defense against low resale values – use it now! With the addition of a ‘First Right of Refusal’ clause to your HOA docs, owners that want to give away units will have to offer them to the HOA first. Problem solved.
3. Establish a Base-Line Value for Units at Your Resort – We’ve learned the hard way that
paid timeshare appraisals are not worth the paper they’re written on, but that doesn’t mean there is no determinable value for your timeshare. Yet again, the baby’s been thrown out with the proverbial bathwater.
Many would have you think your timeshare is worth less than the fractional value of the unit you own. This is great for resale buyers, but it makes no mathematical sense. If a whole furnished condo is worth $300,000, how could its total value exceed the sum of its parts? Are we to actually believe that by splitting the deed into 50 +/- weeks, creating an HOA to manage the funds, and allowing exchange to other properties, the value of the property goes down?
If anything, the convenience of having the ownership split, and able to be sold/used as weeks, is probably worth a 10-15% premium at minimum. So, set a base-line value for your timeshare. The assessed value of your unit is a matter of public record: use that figure, allow for furnishings, add an appropriate premium for convenience, and divide by 50 – and don’t take less! (Many real estate appraisers actually recommend dividing the assessed value by .7 for an accurate market value.)
By now you realize that a large part of your initial sale price went to marketing – this truly plays no role in establishing resale value. If the entire unit you own is worth $500,000 for whole ownership, then your timeshare can’t be worth less than $10,000 for the week – no matter how many websites tell you it’s worthless.
In closing, caring about the future of timeshare can be heart-wrenching.
This is why many owners have simply thrown in the towel. Now is the time to rethink your position: With rampant inflation all but guaranteed over the next few years, owning timeshare protects your ability to vacation. And although no one seems willing to say it anymore, Timeshare Saves You Money!
If you own timeshare, take a chance, take action, and take these 3 steps to change the market. You won’t regret it.