8 ms·

That’s a creative way of finding marks. Timeshares are a notoriously bad investment[1]; people with a timeshare might be easier to rope into another bad investm

• lolinder 2y ago
  That article is useful context for this—it points out that there are way more people trying to sell timeshares than buy them, which means that people who want to get out from under one can't do so easily. That creates an environment ripe for scammers who can promise to finally take this bad investment off your hands.
  • vl 2y ago
    But why don’t they go down in price until there is an equilibrium?
    • jabroni_salad 2y ago
      Here is an example as to why: $0 to buy, maint fee $1076 https://www.redweek.com/posting/R1228603 https://www.redweek.com/posting/R1228603 The relationship is perverse. You cannot simply leave, so there is zero reason for the timeshare company not to bleed you dry in fees. You can sell your share for $0 or even pay someone to take it, but the management company still gets their due. They are not like a landlord who would ever have to contend with an empty unit if they get too uppity.
      • wolpoli 2y ago
        Is there a business model where people could pay to sell their timeshares to a shell company and then having the company go insolvent?
        • lisper 2y ago
          IANAL but I'm pretty sure that would be considered fraud.
          • crooked-v 2y ago
            The "Texas two-step" has been used by plenty of companies and is structured around exactly those sort of shenanigans. https://www.investopedia.com/texas-two-step-bankruptcy-definition-5225888 https://www.investopedia.com/texas-two-step-bankruptcy-defin...
            • csinode 2y ago
              The "Texas two step" is also notably controversial and has been overturned by courts several times, including the most recent attempt: https://www.reuters.com/legal/jjs-ltl-units-bankruptcy-dismissed-by-us-appeals-court-filing-2023-01-30/ https://www.reuters.com/legal/jjs-ltl-units-bankruptcy-dismi...
              • maccard 2y ago
                If you need to take your case to an appeals court to be protected, it's not a protection for an everyday person.
            • lisper 2y ago
              Heh, TIL.
            • MereInterest 2y ago
              Though from the wikipedia article [0], it looks like it has only been used successfully three times (2017, 2019, and 2020). There's a fourth in-progress by Johnson&Johnson, where the summaries state that the bankruptcy has been twice dismissed by courts as being invalid. [0] https://en.wikipedia.org/wiki/Texas_two-step_bankruptcy https://en.wikipedia.org/wiki/Texas_two-step_bankruptcy
        • xxr 2y ago
          I believe most timeshare owners are contractually bound only to sell to individuals, not to LLCs or some other legal entity for this exact purpose.
      • lupire 2y ago
        Permanent timeshares should absolutely be illegal. It's ridiculous to allow a permanent obligation to maintain a property that the "owner" isn't allowed to destroy.
        • mminer237 2y ago
          How do you destroy an apartment? It's the same legally as any condo. When you bought it, you promised all the other owners to help maintain the building in exchange for them all doing the same. You need everyone's consent to undo that. You can't get out of a contract because it's a bad deal. Timeshares are just such a bad idea because you dilute the ownership to worthless levels and the management companies add on exorbitant fees of their own.
          • deleted 2y ago
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          • beaglesss 2y ago
            Condos are also generally a scam. Owning real estate but not the land under it is to become a victim of incredibly perverse economic motives.
            • jdyer9 2y ago
              Presumably the difference with a condo is that the condo owner has a fair vote in the buildings management (usually an HOA in the US) and enough votes can be used to destroy the building if it achieves high enough liability-to-value ratio. That does not exist for a timeshare, the timeshare owners can never band together to change the governance of the building
              • twelve40 2y ago
                That's a great observation. I've always wondered while biking past old apartment complexes in Mountain View being torn down: who foots the bill for the value destroyed, and who makes those decisions. If you owned one of those units, could you just get outvoted a lose a million-dollar condo like that?
      • aleph_minus_one 2y ago
        > > But why don’t they go down in price until there is an equilibrium? > Here is an example as to why: $0 to buy, maint fee $1076 Prices can also be less than 0 USD. Such negative prices do occur in an economy, for example to get free from obligations that accompany the object, which is the case here.
        • NovemberWhiskey 2y ago
          If prices are negative, there will only be a market if sellers can afford (and are willing) to pay buyers the market price.
      • bernawil 2y ago
        now I wonder if identity thieves go around signing people up for timeshares.
    • Jorge1o1 2y ago
      Ebay is full of $1 timeshares. There’s even a website with 17,000 timeshares for a dollar called sellmytimesharenow.com
    • tomrod 2y ago
      Much like most trades above a negligible threshold, there are too many rules in place for it to be a free market (which would allow an equilibrium to occur). Perhaps AirBnB should focus on timeshares instead?
    • lisper 2y ago
      Because a time share is not an asset, it's a liability. It is sold as "ownership" but in fact it is an obligation to pay for a vacation rental in perpetuity, except that "rent" is called "maintenance fees". It is a scam pure and simple, and no one in their right mind would ever buy one at any price.
    • jfengel 2y ago
      There's a sucker retiring every minute.
    • aorloff 2y ago
      Because the equilibrium is $0. The timeshare maintenance fees are the entire cost of ownership. With the exception of a few top end timeshares, the residual value is not more than 0.
    • astura 2y ago
      Because you can't give away a timeshare, it's a liability.
  • 0xEF 2y ago
    I do not know about other US states, but in mine, it is not uncommon to hear radio advertisements for lawyers who specialize in getting people out of timeshares. We have a large population of 50+ individuals who like to spend a good chunk of the year in Florida and they are absolute suckers for timeshares and other methods that promise them cheap or discounted ways to do so. It's so bad, I bet some of you can guess which state I live in.
    • DiscourseFan 2y ago
      [flagged]
    • massysett 2y ago
      I don’t know why anyone would want a timeshare. I don’t know exactly how they work. All I know is that I hear way more ads pushing ways to get out of a timeshare than I hear ads for timeshares. So all I know is that people want to get out of them, but can’t!
      • 0xcde4c3db 2y ago
        The basic idea is reasonable enough: split ownership of a vacation home among multiple owners so that they can all efficiently use it for vacations, with each co-owner having a regular time slot assigned. But in practice the contracts around them are often predatory, with excessive financing costs and annual maintenance fees. And since it's a share that you own, you (nominally) can't get out of the fees without transferring your share to someone else. However, since the downsides have become well-known, people have sometimes found that they can't even give away their shares, let alone recoup much of their initial purchase cost.
        • ghaff 2y ago
          Yeah. With a lot of assumptions, they can maybe work outside of financial shenanigans. But people often want to travel at the same time. They want to vary locations. If you always want to go to the same location multiple times per year and are pretty flexible about dates? Maybe?
• seanthemon 2y ago
  About a decade ago I took a holiday with my now wife and some friends at her step-mother's timeshare for a huge discounted rate. The whole time we were hounded by salesmen who thought it was her step mother and not some 18 year olds sipping beers at the pool, they constantly tried to sell us more timeshares we could never afford, we could barely make our way there!
  • alexey-salmin 2y ago
    I was binge-watching South Park some eighteen years ago without knowing much about the US lifestyle. Jokes were hilarious, situations ridiculous and obviously made up. I'm amazed that up until today I still learn things that make me think "ohh that one is real actually". It started in 2013 when while on a business trip I saw an actual Shake Weight on sale in a supermarket. Now goes the timeshare episode: https://m.youtube.com/watch?v=CFHzL0Q6sXg https://m.youtube.com/watch?v=CFHzL0Q6sXg
    • throwup238 2y ago
      Wait until you find out about Margaritaville!
    • seanthemon 2y ago
      Hahaha! This is absolutely too accurate, I also ended up burning out my clutch there, maybe the mechanic was in on it too!
    • qb1 2y ago
      Those situations are not made up. Come to Colorado, the real Southpark: Fairplay, CO is a great mining/ranching town turned to tourism. Then in Lakewood, CO we have Casa Bonita a type of creative possibly formerly somewhat-racist dinner club with actors who diving into a pool. It was purchased by the Southpark creators, and remodeled recently. There is a wait list to get in. The old place had notorious bad food. Its real man. Come I will show these situations were not made up by the creators solely embellished.
• alexey-salmin 2y ago
  I wonder what is the general principle that would allow to understand that timeshares are a bad investment without a prior knowledge. I don't think it's the matter of "just reading the contract and understanding" for multiple reasons: 1) Anything that involves predictions of future expenses and profits is not certain and depends heavily on your understanding of the domain, it's not a direct consequence of the contract itself. And salesmen will surely fill any gaps you have with the most optimistic assumptions. 2) The hardest problems aren't mentioned in the contract at all. E.g. a somewhat reasonable assumption is that if you don't like your timeshare you can sell quickly by lowering the price. So your losses are capped by the purchase price plus service charges in between -- that IS normally the case with purchased assets. However here you can't even sell it for $1 after buying it for $10000 and it's not immediately obvious. Another problem mentioned here in comments is that despite the fees being $200 per month in the contract real bills turned out to be closer to $2000, that's also hard to foresee. I have some thoughts regarding the principles in such cases but really curious to know other ideas here.
  • ghaff 2y ago
    While not completely reliable, a lot of high pressure sales tactics are one pretty good flag. At least around where I live the residential solar scammers are back to knocking on doors again--in addition to being camped out at the big box hardware stores. Commitments, in general, are also just something to be wary of. Whenever I've considered buying a small urban property to complement my rural house, I lie down and contemplate this thing called hotels as an alternative--which are a heck of a lot more flexible in many ways.
    • alexey-salmin 2y ago
      Thanks! What's the deal with residential solar scams? Is it a pure hit-and-run or something more sophisticated? Like you don't own the panels, but they are on your property, you can't get rid of them and get out of the lease?
      • ghaff 2y ago