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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 mat
by 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 agoWhile 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 agoThanks! 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 agoI haven't looked into it deeply. But there are a lot of complicated financing arrangements, somewhat nebulous maintenance requirements, and unknown future technology transitions. I see the huge industrial solar farms where I live and it's hard for me to believe that a handful of panels (that don't actually provide me with battery backup which would cost even more and probably wouldn't make sense in New England) pencils out financially. For context, my electrical bill is <$200 month so there's no way the realistic payback is anywhere near 10 years. Maybe new construction makes more sense but I've been told probably not even in that case in this area of the country.