Sunday, December 24, 2006
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Timeshares: Follow the MoneyWE READ with interest Carol Sottili's excellent article on timeshares ["Sign Here," Dec. 17]. Special assessments are one item the salespeople would not want to mention to a new buyer of timeshares. We have owned timeshares for 20 years; the special assessments to upgrade properties -- as much as $600 a year on a periodic basis -- are an added burden to timeshare owners in some locations.
Our advice to buyers:
* Buy where you want to stay every year; otherwise, pay attention to the exchange fees, which can add up quickly.
* Buy a resale property.
* Buy one week (rather than multiple weeks or points) and take advantage of the special offers that most timeshare companies extend on a quarterly basis.
Donna and Jim Nicholson, Gettysburg, Pa.
GREAT ARTICLE! Having analyzed this as a financial planner, I looked at it similarly, but with a slightly different angle.
Take Marriott's Grand Vista. If you pay $20,000 plus $723 per year, your opportunity cost (at the 5 percent interest rate you used) is $1,723 ($1,000 income from the $20,000, plus the $723 maintenance fee) per year, or roughly $250 per night.
Can you get a better deal than $250 per night in a resort setting somewhere in Orlando -- or any other part of the world -- at low season? I think so.
If you want to trade to another company, then that cost needs to be added to the $1,723. I believe it is a minimum of $250 per year for membership and exchange. So that pushes the nightly rate up to about $285.
I think you would agree that $285 can go a long way in any season in most parts of the world, but even more so during low season.
If you up your 5 percent rate of return to 7 percent, which is what I use for my clients' financial plans -- or even 10 percent, which is what the S&P 500 averages -- you can increase your $285 to $340 or $425 per night.
Needless to say, I think a timeshare is a bad idea financially, but I also don't like being tied to one location or the hoops you jump through to change.
Timothy T. Murray, Chantilly
YOU COULD have done a great service to the timeshare-buying public if you had focused your article on the resale market. A very small fraction of individuals find any benefit in buying directly from the developer. Buyers can save many thousands of dollars buying in the resale market and understanding how the exchange companies work.
I almost bought a three-bedroom unit from one of the developers you covered in your story. The price was $33,000. I knew enough to understand that there was a window of time to rescind the purchase, and I knew about the timeshare users group, TUG2.net.
After receiving a TUG education, I rescinded the original contract and purchased a comparable unit from the same developer on the resale market for $7,500.
Charles Fernandez, Germantown
YOUR STORY hints at the economic fraud timeshares represent but does not expose it enough. On the resale market, these units sell for a fraction (20 to 40 percent) of their original purchase price. The sellers use deceptive economic calculations and arguments beyond the analytical skills of most of their customers.
Your reporter surveyed a different organization every 90 minutes. If you get the full timeshare presentation, you will be unable to get away in less than two or three hours. If you want to get a better price, show some resistance or begin to walk away. Like car salesmen, your sales rep will go to the manager and come back with a better price. Better yet, go to a resale office first.
It baffles me how this scheme has gone on for so long without the intervention of consumer protection or government agencies. I challenge the timeshare industry to find an economics professor not connected with their industry who will favorably review their presentations.
Jan Polissar, Bethesda
I LOOKED at your first example, at Disney's Saratoga Springs. If I instead take the $24,442 and put it in a Vanguard money market fund at 5.6 percent (current rate), I would have $1,369, plus the $963 maintenance fee (that I would not have spent), for a total of $2,332 available to spend on a vacation each year.
I found a one-bedroom lockout on the Web for rent at this resort in Week 39 for about $150 a night. Since this is bigger than your studio example, I will assume it costs 15 points a night. At that rate, your 242 points would buy about 16 nights. Now 16 x $150 = $2,400 -- which is close to the $2,332 I would have available to spend by not buying the timeshare.
My conclusion: Don't buy the timeshare. Instead, use the interest/investment income to rent a similar unit. And you still have the $24,442 at the end of the year!
Don Huebner, Larkspur, Colo.
Hudson Valley MansionsNICOLE COTRONEO'S article ["50 Rooms, Hudson View (Plus Tinsel)," Dec. 17] was a useful guide to a destination filled with history and charm. Instead of calling it the American Rhine, I would compare it with the Loire Valley because the mansions were summer social retreats, whereas the Rhine's castles were built to defend against warring neighbors.
I was surprised that there was no mention of one of the Hudson Valley's most interesting stops, the Culinary Institute of America near Hyde Park. The beautifully landscaped grounds overlook the Hudson. The CIA, as it is known, features three gourmet restaurants where fine dining of various types is prepared and served to visitors every day. Tours are available as well.
Michael Rae, Potomac
ANYTHING THAT attracts support for protecting the Hudson and its treasures is a good thing. You did, however, leave out a couple of excellent houses on the east side of the Hudson: Lindenwald, Martin Van Buren's house in Kinderhook ( http://www.nps.gov/mava), and Locust Grove ( http://www.morsehistoricsite.org/), Samuel Morse's house in Poughkeepsie.
Deborah Odell, Alexandria
London HotelsTHANK YOU for the spot-on London hotel article ["Pound for Pound, Bargains by London Standards," Dec. 17]. I travel to London frequently for business and pleasure, and this type of article was just right for those "I'm not on an expense account this time but need a nice place to stay without breaking the budget" trips. That place in Kensington near Earl's Court is right up my alley.
Benjamin Cromer, Round Hill
Montevideo Street CrimeMY WIFE and I recently booked a Buenos Aires-Montevideo tour with LanVacations, which had been mentioned in your section. Most of the tour was pleasant, the staff attentive and the accommodations in line with our expectations.
However, in Montevideo we had an unpleasant and dangerous experience in the doorway of the Balmoral Hotel on Plaza Cagancha. As my wife and I were about to enter the hotel at 10:30 p.m., a biker swooped past and grabbed my wife's purse. She was thrown to the ground and dragged for several yards until the thief cut the purse strap.
The police advised us that street theft is a common occurrence, especially in the area around the hotel. Travelers to Montevideo should be aware of this.
Delbert A. Fitchett, Bethesda
Rental Car Key BundlesI AM A REGULAR Avis rental car customer and am always burdened with a huge block of keys to lug around in my pocket. What's the deal? Is this standard industry practice?
Rent a car from Avis and you get: two identical keys (the big ones), the remote control and the Avis plastic tag, all inextricably linked with a plastic-coated, metal-core wire. No practical way to get them apart, so I usually ask them to do so, but am told "the keys must stay together." Why? So I can lock all of them in the car together?
I admit to resorting to various nefarious ways to get them apart, minimizing the chance that the Rubik's Cube-size brick will leave my suit pants misshapen. I have managed to cut the metal wire (not easy in an era when wire cutters don't clear TSA screening) or break the plastic holder open to separate one key. And once in a while, the remote will have a ring that can be removed, so I take that with me and lock the keys in the car. God help me if the battery dies in the remote, though.
Please, tell Avis to stop making its key bundle so ridiculously large, lest someone hang themselves from the oversize ring in frustration.
Tim Fenton, Washington
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