Timeshares: What's the Catch?
Rick went to a timeshare pitch and now has a question for Dave about something specific they did.
QUESTION: Rick in Tennessee says he looked into a timeshare with a points system, and it sounded too good to be true. He wants to know what the catch is. Dave says it is no different than a regular timeshare–both are bad.
Dave's ANSWER: It's not crooked, it's just stupid. When you buy a certain kind of timeshare like you're talking about, you just own one particular week in one particular complex, probably in that same unit.
They’ve gotten a little more sophisticated over the years. Many of them have gone to this point system, where you buy so many points, which gives you your week in your unit, but if you want to upgrade you can pay a little more. Or you could trade even and find another complex that has a similar point system and try to trade and move into the other one.
The point is that you're still paying for something you are locked into that has no value. You can't sell it. Nobody wants them. Only about 2% of the people who have them actually like them. The rest of the people talk about how they wish they hadn’t put their money into it because they could have rented a decent condo or hotel anywhere in the world for what they paid into this.
You're not trapped into one week in one location, going back to the same place over and over again. There's just no investment to it. It's consumption and it's unwise; it's an unwise type of consumption. I don’t mind traveling and spending money to rent a place; I do that all the time.
If someone counters that approach by saying that I don't own anything, I say that you don't own anything with the timeshare. You're just locked into their system and their points. You may buy something in Gatlinburg outside of Knoxville and try to trade it for something in Napa and they laugh at you.
A timeshare condo in Gatlinburg doesn't garner as many timeshare points as one in Aspen. Those are two different worlds. All your points would only be about half of what you need, and besides, you can only get into places that aren't popular. Popular places are booked up. It's like if you've ever tried to use your airline miles on your credit card, Jupiter has to be lined up with Mars or you don't get to use them. You have to be in the Age of Aquarius to be able to get on one of those planes.
Timeshares are just crud. I wouldn't spend a dime on them.