Last week we spent our anniversary at a lovely resort in Napa Valley. At check-in, the concierge asked us if we wanted to attend their time share sales pitch. When we turned up our noses, he offered a $100 discount on the Wine Train. So we went. But after a ninety-minute session, I still don’t see where the value is. If you know, please write me.
The session is conducted by a real estate agent because you are actually buying real estate. For $10,000 we could have vacations at this resort for the rest of our lives—and so could our kids. The agent presented a series of confusing charts—numbers flying off the pages— on how much value a buyer gains after ten years and then after forty, should we live so long.
But two features did not make sense to me, the maintenance fee and the resale.
If you buy into the club for one week’s worth of time, you pay $10,000 plus a $1,400 annual maintenance fee. However, if you don’t buy in and just come in off the street, your week also costs $1,400. So why would you join the club for an additional $10,000? The real estate agent said, “Because the value of your investment will increase. Plus we have a new points system.” It's good to update your system, but the property will still age, and so the cost of the maintenance fee will also increase, I would think.
And then there’s the resale. If you get too old to travel, you can liquidate your property in two ways. The agent recommended bequeathing it to our kids. But then we’d also be bequeathing a $1,400 annual maintenance fee. What if the kids are young newlyweds and can’t afford it? Or a middle aged couple with kids in college and can’t afford it? Is it legal to force kids to inherit a debt they can’t afford?
The second option is to “sell it at market value.” I researched this proposition afterwards, and the problem was that I couldn’t figure out where the buyers are. Several real estate companies have sprung up specializing in taking time shares off your hands. But they don’t pay you—you pay them. It costs you between $3,500 and $5,000 to get one of these companies to relieve you of your legal obligation to your time share. Wow! Expensive. So currently, the market value seems to be less than zero.
And ten years—or forty years—times less-than-zero would still equal less than zero, right?
So I ask again, what is the value of the $10,000 investment?
- Nancy Adair nancyadair2002@yahoo.com
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