5 ms·

How did timeshares become so deeply associated with slimy sales tactics?

by paulgb 4y ago

Hnrobert42 4y ago
I’m not sure, but here’s one more data point. I have some acquaintances in Vietnam who sell timeshares there. Their practices are equally shady.
lisper 4y ago
Because the fundamental economics of time shares are a scam. They are pitched as "ownership" but what they really are are perpetual rental contracts with no way out. (The rent is called "maintenance fees" but it doesn't matter what label you attach to it. It's a sum of money that you are obligated to pay year after year after year. If it quacks like rent...) And you even have to pay a hefty sum up front for the privilege of being obligated to rent a place once a year forever.
- gruez 4y ago
  Most of what you've described can also be applied to condominiums. The only difference is that you can occupy them year round, but I don't think that's a relevant difference. Are the "fundamental economics" of those also "a scam"?
  - moomoo11 4y ago
    I have no idea what a timeshare is (sorry) but aren’t condos something you fully own? Like some of my friends live in condos, some lived in a condo for a few years and then sold them before moving into a house or some other city. Where I live the condos are usually similar in appearance to apartments (bed bath living room kitchen all on same floor) and there are townhomes which are a bit fancier and you might get an attached garage.
    - grzm 4y ago
      https://en.wikipedia.org/wiki/Timeshare https://en.wikipedia.org/wiki/Timeshare > A timeshare (sometimes called vacation ownership) is a property with a divided form of ownership or use rights. These properties are typically resort condominium units, in which multiple parties hold rights to use the property, and each owner of the same accommodation is allotted their period of time. Units may be sold as a partial ownership, lease, or "right to use", in which case the latter holds no claim to ownership of the property. The ownership of timeshare programs is varied, and has been changing over the decades.
    - stormbrew 4y ago
      I think they're talking about the fact that you're required to pay condo fees to maintain your ownership of the condo, which does kind of make it a hybrid rental in a way. Obviously there's pretty good reasons for condo fees on some level (ignoring any mismanagement that may or may not be uncommon -- though sometimes the mismanagement is that they're too low), but it's something you have to factor in. You can never be completely free and clear with a condo that has fees.
      - sokoloff 4y ago
        By that token, you're not free and clear if there are homeowner association fees or property taxes. Technically correct is the best kind of correct.
        copperx 4y ago
        I don't think there's a way of owning a domicile in any capitalist country without paying a membership fee (property tax) to the government. If you rent, you're doing that indirectly.
        lupire 4y ago
        But a rental has a lease termination date. Ownership does not.
        gruez 4y ago
        >I don't think there's a way of owning a domicile in any capitalist country without paying a membership fee (property tax) to the government. well actually... https://en.wikipedia.org/wiki/Property_tax#Places_without_property_tax https://en.wikipedia.org/wiki/Property_tax#Places_without_pr...
        stormbrew 4y ago
        I mean, "homeowner association fees" are just condo fees for places that aren't apartments. They seem even less likely to go towards anything useful than condo fees do though. But yes, that's true about property taxes. But since that's a commonality between condos and otherwise-individually-owned property it doesn't really matter. In a condo you pay both, but if you own outright you only pay one. In a rental you're kinda paying both combined, because the owner pays property taxes and then presumably also tries to extract profit. Anyways, I don't agree that condos are a scam in the same way that timeshares are, and I don't think a condo is just a glorified rental (though the one condo I have owned in my life had absurdly high fees that I regretted getting myself into) or a scam like timeshares are. I was just trying to explain what I though the GP meant.
    - katzgrau 4y ago
      Timeshares are very similar but the difference is that you typically only get a week or two to stay there - it's jointly owned by others. That obviously has a big impact on resell value - so much to the point that some timeshare owners can't give it away let alone sell it, because no one wants to be beholden to the maintenance fees.
  - Swizec 4y ago
    No because you buy a condo and get full ownership. You can use it 24/7, rent it out, remodel internally … hell you can even break down walls if they aren’t structural or add new walls if you want. Depending on specifics you even get partial ownership of the whole building and a seat on its management board. At least that’s how it works for my mom, they run the building like a co-op and there is no other owner than the people who own the apartments inside. edit: a timeshare in comparison is kinda like buying an NFT of an apartment. It gives you the right (obligation) to use the place for a period of time every year
  - lisper 4y ago
    > The only difference is that you can occupy them year round, but I don't think that's a relevant difference. Most people think it's a pretty relevant difference. For one thing, if you occupy a place year-round, you can keep your belongings in it. That's a pretty significant feature for most people, which is the reason most people choose to live in a permanent domicile rather than moving every week. But different strokes for different folks I guess.
    - gruez 4y ago
      The "a relevant difference" part was in relation to the sentence after, which is whether something is a scam or not. Regardless of what utility year-round occupancy affords you, I doubt that's the defining factor between whether it's a scam or not.
    - hakfoo 4y ago
      I suspect there's also an overselling of a given property, and if not straight overselling, overselling the viable months. Most vacation destinations are somewhat seasonal. Maybe the most major cities with year round cultural activities, but not in places like beach and ski towns. You can potentially have 52 "1-week-a-year" people fighting over the 16-20 weeks a year the location is most desirable, and maybe settling for lesser times, or just not using it that year. Hell, why not sell 60 memberships, knowing some will just punt in any given year?
  - dghlsakjg 4y ago
    Condo fees are generally set by an elected council of owners based on actual spending needs. The condo association is also 'owned' by the condo owners, so if it dissolves any assets in the accounts revert to the owners. This means that you are entering into a partnership where the other partners are theoretically acting in your interest. They also come with the legal protections of being real property. Timeshare owners are generally not represented by a committee of other owners, the money does not go to things approved by them, and the company makes no promises about acting in the interest of timeshare owners. So yeah, you are contractually obligated to pay fees for a space you can occupy is where they are similar. There's a reason that timeshares almost never appreciate, often being given away for free, where a condo tends to hold value or appreciate.
    - 10u152 4y ago
      In Australia you're obliged to provide the accounts to prospective buyers and current owners in "condo" (we call them Strata Title) units. Very easy to see where the money is going and how it's been managed. As a fun little bit of anecdata, newer buildings are always the worst with many leftover, teething issues and strata title can sometimes be heavily in debt. Old buildings can have huge amounts in the sinking fund and may elect to reduce yearly fees and rely on interest.
  - foobiekr 4y ago
    They're pretty different in practice. https://thehotelskills.com/different-between-time-share-and-condominium-the-complete-guide/ https://thehotelskills.com/different-between-time-share-and-...
  - sokoloff 4y ago
    A condominium is an ownership structure, where each owner owns the exclusive rights to some portion of a building (or set of buildings) and share common ownership in the rest of the condo association. I fail to see how that's even passingly like a timeshare, except that both typically have fees and involve real estate.
  - bawolff 4y ago
    The scam part is not that you have to pay "rent", its that you're being mislead into thinking its something different.
  - vkou 4y ago
    1. If you own a condo, you get voting shares in your strata/HOA. The owner collective collectively sets fees, maintenance schedules, etc. The owners act for the interest of themselves, so as an owner, that is usually in your interest. Legislature protects your rights as an owner. 2. If in some hypothetical world, you were unhappy with the fees, and you couldn't sell your condo, you can walk away from it anytime you want, and all you're out is the purchase cost of the condo. 3. You can't do that with the timeshare. You need to find another sucker to take the timeshare off your hands. 4. For what you get out of it, the cost of owning/renting a timeshare versus owning/renting a condo is horribly tilted against the timeshare. 5. Which is why intelligent people will pay a million dollars for a condo, but only idiots buy timeshares. 6. Which why you get screwed if you want to do #2, because of #3. The reason people buy timeshares is because they are bad at math, bad at finances, and don't understand that they are getting fleeced. Timeshares don't necessarily have to be shitty scams, it's entirely possible to design one that isn't a waste of money. But in practice, all of them are.
  - kevinventullo 4y ago
    I’m on the board of my condo’s HOA and can see where every dollar of my fees get spent. It’s pretty much entirely going into maintenance of the building.
- buu700 4y ago
  Serious question: how has post-pandemic inflation impacted the economics of timeshares purchased pre-pandemic? Is there any particular point in time where we can look back with the benefit of hindsight and say that a timeshare actually would have been a good investment?
  - lisper 4y ago
    No. A time share is not an investment ever. It's a scam always.
  - caminante 4y ago
    Has to be "yes" with qualifiers. I'm sure that certain timeshares (no inflation adjustment with good governance) have aged really well, and some people that wanted access to specific locations were able to pickup timeshare rights for a song. The problem is that the "benefit of hindsight" question requires you to compare other investments that have probably fared as well or better without the constraints/risks of typical timeshares.
- rwmj 4y ago
  It's worse than that - it's a perpetual unsellable rent that can be inherited by your kids and their kids forever! https://www.theguardian.com/money/2012/feb/18/macdonald-hotels-timeshare-property-ownership https://www.theguardian.com/money/2012/feb/18/macdonald-hote...
stormbrew 4y ago
Honestly I find it kind of a shame because there are places in the world I would actually love to own/rent a regular consistent shareable space in, but it's basically impossible to do, without it being a scam, unless you have a bunch of well-off friends who want roughly the same thing as you. Probably the closest you can come is buying or renting a place and then airbnb-renting it out most of the time, but then you're getting yourself into some legally grey areas most likely (plus becoming a landlord, which may be quite a lot of work and/or morally questionable in itself depending on your views).

How did timeshares become so deeply associated with slimy sales tactics?

by paulgb 4y ago

How did timeshares become so deeply associated with slimy sales tactics?

I’m not sure, but here’s one more data point. I have some acquaintances in Vietnam who sell timeshares there. Their practices are equally shady.

lisper 4y ago

Because the fundamental economics of time shares are a scam. They are pitched as "ownership" but what they really are are perpetual rental contracts with no way out. (The rent is called "maintenance fees" but it doesn't matter what label you attach to it. It's a sum of money that you are obligated to pay year after year after year. If it quacks like rent...) And you even have to pay a hefty sum up front for the privilege of being obligated to rent a place once a year forever.

gruez 4y ago
Most of what you've described can also be applied to condominiums. The only difference is that you can occupy them year round, but I don't think that's a relevant difference. Are the "fundamental economics" of those also "a scam"?
- moomoo11 4y ago
  I have no idea what a timeshare is (sorry) but aren’t condos something you fully own? Like some of my friends live in condos, some lived in a condo for a few years and then sold them before moving into a house or some other city. Where I live the condos are usually similar in appearance to apartments (bed bath living room kitchen all on same floor) and there are townhomes which are a bit fancier and you might get an attached garage.
  - grzm 4y ago
    https://en.wikipedia.org/wiki/Timeshare https://en.wikipedia.org/wiki/Timeshare > A timeshare (sometimes called vacation ownership) is a property with a divided form of ownership or use rights. These properties are typically resort condominium units, in which multiple parties hold rights to use the property, and each owner of the same accommodation is allotted their period of time. Units may be sold as a partial ownership, lease, or "right to use", in which case the latter holds no claim to ownership of the property. The ownership of timeshare programs is varied, and has been changing over the decades.
  - stormbrew 4y ago
    I think they're talking about the fact that you're required to pay condo fees to maintain your ownership of the condo, which does kind of make it a hybrid rental in a way. Obviously there's pretty good reasons for condo fees on some level (ignoring any mismanagement that may or may not be uncommon -- though sometimes the mismanagement is that they're too low), but it's something you have to factor in. You can never be completely free and clear with a condo that has fees.
    - sokoloff 4y ago
      By that token, you're not free and clear if there are homeowner association fees or property taxes. Technically correct is the best kind of correct.
      - copperx 4y ago
        I don't think there's a way of owning a domicile in any capitalist country without paying a membership fee (property tax) to the government. If you rent, you're doing that indirectly.
        lupire 4y ago
        But a rental has a lease termination date. Ownership does not.
        gruez 4y ago
        >I don't think there's a way of owning a domicile in any capitalist country without paying a membership fee (property tax) to the government. well actually... https://en.wikipedia.org/wiki/Property_tax#Places_without_property_tax https://en.wikipedia.org/wiki/Property_tax#Places_without_pr...
      - stormbrew 4y ago
        I mean, "homeowner association fees" are just condo fees for places that aren't apartments. They seem even less likely to go towards anything useful than condo fees do though. But yes, that's true about property taxes. But since that's a commonality between condos and otherwise-individually-owned property it doesn't really matter. In a condo you pay both, but if you own outright you only pay one. In a rental you're kinda paying both combined, because the owner pays property taxes and then presumably also tries to extract profit. Anyways, I don't agree that condos are a scam in the same way that timeshares are, and I don't think a condo is just a glorified rental (though the one condo I have owned in my life had absurdly high fees that I regretted getting myself into) or a scam like timeshares are. I was just trying to explain what I though the GP meant.
  - katzgrau 4y ago
    Timeshares are very similar but the difference is that you typically only get a week or two to stay there - it's jointly owned by others. That obviously has a big impact on resell value - so much to the point that some timeshare owners can't give it away let alone sell it, because no one wants to be beholden to the maintenance fees.
- Swizec 4y ago
  No because you buy a condo and get full ownership. You can use it 24/7, rent it out, remodel internally … hell you can even break down walls if they aren’t structural or add new walls if you want. Depending on specifics you even get partial ownership of the whole building and a seat on its management board. At least that’s how it works for my mom, they run the building like a co-op and there is no other owner than the people who own the apartments inside. edit: a timeshare in comparison is kinda like buying an NFT of an apartment. It gives you the right (obligation) to use the place for a period of time every year
- lisper 4y ago
  > The only difference is that you can occupy them year round, but I don't think that's a relevant difference. Most people think it's a pretty relevant difference. For one thing, if you occupy a place year-round, you can keep your belongings in it. That's a pretty significant feature for most people, which is the reason most people choose to live in a permanent domicile rather than moving every week. But different strokes for different folks I guess.
  - gruez 4y ago
    The "a relevant difference" part was in relation to the sentence after, which is whether something is a scam or not. Regardless of what utility year-round occupancy affords you, I doubt that's the defining factor between whether it's a scam or not.
  - hakfoo 4y ago
    I suspect there's also an overselling of a given property, and if not straight overselling, overselling the viable months. Most vacation destinations are somewhat seasonal. Maybe the most major cities with year round cultural activities, but not in places like beach and ski towns. You can potentially have 52 "1-week-a-year" people fighting over the 16-20 weeks a year the location is most desirable, and maybe settling for lesser times, or just not using it that year. Hell, why not sell 60 memberships, knowing some will just punt in any given year?
- dghlsakjg 4y ago
  Condo fees are generally set by an elected council of owners based on actual spending needs. The condo association is also 'owned' by the condo owners, so if it dissolves any assets in the accounts revert to the owners. This means that you are entering into a partnership where the other partners are theoretically acting in your interest. They also come with the legal protections of being real property. Timeshare owners are generally not represented by a committee of other owners, the money does not go to things approved by them, and the company makes no promises about acting in the interest of timeshare owners. So yeah, you are contractually obligated to pay fees for a space you can occupy is where they are similar. There's a reason that timeshares almost never appreciate, often being given away for free, where a condo tends to hold value or appreciate.
  - 10u152 4y ago
    In Australia you're obliged to provide the accounts to prospective buyers and current owners in "condo" (we call them Strata Title) units. Very easy to see where the money is going and how it's been managed. As a fun little bit of anecdata, newer buildings are always the worst with many leftover, teething issues and strata title can sometimes be heavily in debt. Old buildings can have huge amounts in the sinking fund and may elect to reduce yearly fees and rely on interest.
- foobiekr 4y ago
  They're pretty different in practice. https://thehotelskills.com/different-between-time-share-and-condominium-the-complete-guide/ https://thehotelskills.com/different-between-time-share-and-...
- sokoloff 4y ago
  A condominium is an ownership structure, where each owner owns the exclusive rights to some portion of a building (or set of buildings) and share common ownership in the rest of the condo association. I fail to see how that's even passingly like a timeshare, except that both typically have fees and involve real estate.
- bawolff 4y ago
  The scam part is not that you have to pay "rent", its that you're being mislead into thinking its something different.
- vkou 4y ago
  1. If you own a condo, you get voting shares in your strata/HOA. The owner collective collectively sets fees, maintenance schedules, etc. The owners act for the interest of themselves, so as an owner, that is usually in your interest. Legislature protects your rights as an owner. 2. If in some hypothetical world, you were unhappy with the fees, and you couldn't sell your condo, you can walk away from it anytime you want, and all you're out is the purchase cost of the condo. 3. You can't do that with the timeshare. You need to find another sucker to take the timeshare off your hands. 4. For what you get out of it, the cost of owning/renting a timeshare versus owning/renting a condo is horribly tilted against the timeshare. 5. Which is why intelligent people will pay a million dollars for a condo, but only idiots buy timeshares. 6. Which why you get screwed if you want to do #2, because of #3. The reason people buy timeshares is because they are bad at math, bad at finances, and don't understand that they are getting fleeced. Timeshares don't necessarily have to be shitty scams, it's entirely possible to design one that isn't a waste of money. But in practice, all of them are.
- kevinventullo 4y ago
  I’m on the board of my condo’s HOA and can see where every dollar of my fees get spent. It’s pretty much entirely going into maintenance of the building.
buu700 4y ago
Serious question: how has post-pandemic inflation impacted the economics of timeshares purchased pre-pandemic? Is there any particular point in time where we can look back with the benefit of hindsight and say that a timeshare actually would have been a good investment?
- lisper 4y ago
  No. A time share is not an investment ever. It's a scam always.
- caminante 4y ago
  Has to be "yes" with qualifiers. I'm sure that certain timeshares (no inflation adjustment with good governance) have aged really well, and some people that wanted access to specific locations were able to pickup timeshare rights for a song. The problem is that the "benefit of hindsight" question requires you to compare other investments that have probably fared as well or better without the constraints/risks of typical timeshares.
rwmj 4y ago
It's worse than that - it's a perpetual unsellable rent that can be inherited by your kids and their kids forever! https://www.theguardian.com/money/2012/feb/18/macdonald-hotels-timeshare-property-ownership https://www.theguardian.com/money/2012/feb/18/macdonald-hote...

stormbrew 4y ago

Honestly I find it kind of a shame because there are places in the world I would actually love to own/rent a regular consistent shareable space in, but it's basically impossible to do, without it being a scam, unless you have a bunch of well-off friends who want roughly the same thing as you. Probably the closest you can come is buying or renting a place and then airbnb-renting it out most of the time, but then you're getting yourself into some legally grey areas most likely (plus becoming a landlord, which may be quite a lot of work and/or morally questionable in itself depending on your views).