Timeshare Resales are my all-time favorite travel hack! People often ask how Brian and I afford as much travel as we do. One of the ways we accomplish as much travel as we do is to own a timeshare. And, we purchased a timeshare resale. That’s right! A timeshare resale, as you all roll your eyes in shock and horror at that dirty concept. Before I get into why this works, let me entice you with the cliff notes:
- We paid $207 for our timeshare resale
- The total cost including closing costs was $1,097.50
- We own it outright, paid cash and no payments
- We did not sit through a presentation or visit a resort
- Our maintenance fees are only $425 a year
- Ironically, this year after nine years of owning we had a special assessment for $200
- We use it at least twice a year and often much more
- We do not have to trade weeks or deposit weeks
Are you interested in understanding? Let me explain how buying a timeshare resale is a good idea!
Several years ago, a friend purchased a timeshare following a tour, as many do. She was promised all kinds of luxury accommodation, flexible dates, and so on. She was met with the frustrating experience of not being able to book and could not figure out the different types of booking options. My friend asked me to read the paperwork and figure it out. Little did I know that we were talking about ~500 pages worth of terms and conditions. I was able to narrow it down to some key points. This is how I came to understand the process and how to maximize it. Once I understood the process, our experience with timeshare begun!
Back in the day, timeshares were sold as a week and technically still are because it’s deeded property. The old system had you locked in the same week, same unit, same location unless you could trade that specific week with someone else. A thing of the past for most new sales and in the case of most re-sales.
Today, most people have upgraded their old fixed week to what’s known as points. Simply stated, this means while you will always have “that week” at the beginning of each year, you choose if you want “that week,” or you can have points. Points are still the way to go unless you want “that week.” We own July 4th at Oyster Pointe, but we have our account set up to automatically take the 45K points. Once you own points, knowing how to use them is critical, but I will discuss this later.
Here is an example of the one we used in Bali: Karma Royal Jimbaran
Timeshare Resale Buying Process
Primarily if you are looking to buy a timeshare, you should be looking for the maximum amount of RCI points with the least amount of maintenance fees. You can buy them on eBay or any timeshare resale site. We purchased our timeshare on eBay. You should not care where the timeshare is deeded (located), it could be in Tim Buck Two. What you care about is the cost per point to maintain. To compare apples to apples, you will take the annual maintenance fee divided by the total number of points to come up with the annual cost per point. How many points should you be looking for? It depends.
We have 45k per year and never needed more as there are four ways to use your timeshare, and two modes don’t require points. Before we go further, let’s look at some terminology you will need to understand. To maximize your use, you are looking for annual usage. Anything less means you will pay an annual maintenance fee but only get your points every other year. One other thing I should stress is that the approach I used was to focus on RCI converted properties. There are many independent point systems like Bluegreen, Hilton, and Marriot. All allow you to trade via RCI, but the points are not apples to apple trades, which makes the comparison a challenge. I have friends that own Bluegreen and Hilton. They pay way more in fees and have fewer options.
Common Terminology used in Timeshare Resale Listings
|Term||What you Want||Comments|
|Use Type||Points||Do not buy anything that has not already been converted into points. If you do, you are essentially buying “that week” and converting to points will cost you a pretty penny|
|Usage||Annual||Do not buy anything other than annual.|
• Some timeshares are Triennial or Biennial
• Avoid anything with floating weeks or years.
• Avoid Usage = Even Years
|Week #||Any||Varies and does not matter. It’s the points' value|
|Season||Any||Varies and does not matter. It’s the points' value|
|Sleeps||Any||Any. Most will say how big the “deeded” unit is but you don’t care. Again, you are after the best point deal.|
|Location||Any||Does not matter, as you spend the points wherever you chose to go.|
|Conversion||Conversion/Converted||Look for this: * The original owner paid about $3,000 (or other amount) to convert this ownership into RCI Points. The savings is passed onto you.|
|Maintenance Fees||Vary||Take maintenance fee / total number of points to understand the annual cost per point. Extremely important to compare apples to apples.|
The RCI Timeshare Buying Process
- Look at timeshare resales.
- Calculate the annual cost per point (maintenance / points).
- Add up the closing costs.
- Asses the asking price or bid.
- Ask all the questions you need to before bidding or buying.
- Demand a title search be included (even at your cost) before you bid or buy. The last thing you want is to take on someone else’s debt.
Typical Timeshare Resale Closing Costs
|Winning Bid or Fixed Price||Once||Do not buy anything that has not already been converted into points. If you do you are essentially buying “that week”|
|Resort Transfer Fee||Once||Often includes closing costs. Some resorts charge both closing costs and a “closing cost fee”. Expect to pay ~ $200.|
|Title Search & Warranty Deed||Once||This is unusual for timeshare resales. I requested so I was not buying someone else’s debt. It costs ~$250 and worth it for peace of mind. I used Title Outlet, Inc. in Florida.|
|Any Due Maintenance Fees||Might be due at purchase and will be annual there after||Sometimes you will be closing right around the time maintenance fees are due. If so you will have to pay them upfront for the upcoming year. It’s best to avoid this if you can, but it’s unlikely. Often people are trying to sell before their fees are due|
|RCI Transfer Fee||Once||~ $98|
|RCI Membership Fee||Annually but you must pay year one when you transfer over||~$124 (Lower if you buy 3 years at a time vs. one)|
For current and accurate RCI, costs visit here.
Comparing Timeshare Resales Apples to Apples When Buying
Here are some examples so you can see how to compare. For these examples, let’s assume the closing costs are the same. RCI costs will be the same. We will examine the cost per point:
a) 79K annual points deeded to a resort in Branson, MO, the annual maintenance fee is $800. Cost per point: $0.0101
b) 45K annual points deeded to resort in Orlando, FL, annual maintenance fee is $950. Cost per point is $0.021
c) 85K annual points deeded to resort in Little Rock AK, the annual maintenance fee is $670. Cost per point is $0.0078
d) 65K annual points deeded to resort in Dallas, TX, the annual maintenance fee is $550. Cost per point is $0.0084
e) 40K annual points deeded to resort in Dallas, TX, the annual maintenance fee is $465. Cost per point is $0.0116
Forget location. Which of the 5 is the best deal? Option C because it’s the lowest cost per point. Now, you might want to consider option E because while not the cheapest point to fee ratio, it is the lowest overall maintenance fee, which is also a long-term consideration. You don’t want to over-commit to annual costs. Something else that’s important here is that most maintenance fees are due in January. Less than ideal time for most, so plan ahead.
Let me make this even easier for you; here is a calculator you can use to calculate the cost per point.
RCI Points Cost Calculator
RCI Points Cost Calculator
Maximizing Your Timeshare Resale Investment
Let’s assume your maintenance fees are $500 a year, and your RCI membership is $124. This means annually, the timeshare costs you $624. Add to this any RCI transaction has a booking fee unless you book “that week,” which is free. For this example, let’s say booking Cabo is 30K points with a booking fee of $239. You are now at $863 for the year. This is good for a week, but if you book another trip for 15K points and a booking fee of $239, you are at $1102 for 14 nights! For us, having one is not worth the maintenance fee unless we use it at least twice a year. Naturally, the more you use it, the lower the overall costs are annual.
Making RCI Timeshare Reservations
I have found the key to almost every timeshare booking is to go with what’s available and when vs. X location on Y date. This approach is the opposite of how most people try to book. Most people book about six months out of a specific time with the location in mind. You can achieve this but using a planning approach. For example, we wanted to go to Oktoberfest sometime in the next couple of years. I searched which year was available in the location we wanted. I secured us a week in 2019 for 21K points and a cost of $219.
Once you are all set up with an account with RCI, make sure you have your account set to default to points vs. the resort you own.
RCI Search Types
#1 Exchange Vacation RCI Reservation
This search is based on points. You merely search a region and dates. The system will show what’s available and the number of points needed. I strongly advise you to take advantage of what’s available vs. a specific location on a particular date. Book as far ahead as you can. If you are married to July 4th in Key West this year, it’s not going to happen. We used our timeshare in Key Largo to take a group of friends. I booked two years in advance by searching what was available and when. Just know the points booking is the premium route. In my experience, there are more options with point usage. We have also scored some super fancy digs (2/2 2000 sq. foot condo beachfront in Cabo with a plunge pool) using points! Four of us went on this trip, and all we paid for was flights.
#2 Extra Vacation RCI Reservation
You can be out of points or not want to use points and pay to stay at a resort. We did this in Vermont. We got a 3-bedroom 2-bath townhouse with a sauna for $500 for seven nights. Cheaper and more extravagant than any deal you will find online. This option does help with going to a specific location on a particular date but only marginally. If you are set on a specific time or place, it can get expensive.
#3 Last Call RCI Reservation
Last Call is an excess inventory not booked. You can score a deal on a 90-day countdown ticker for $199 – $239 without using a point. All the last call options are for seven nights, but guess what, you can leave anytime you want. We have used this many times for random trips. Sometimes we use this for a weekend and check out early. The last call is also a favorite of ours for all things Florida. I have used this for friends that are traveling and issue the guest certificate. Sometimes, RCI has sales, and you can score one of these as cheap as $99 – we have several times.
#4 Nightly Stays RCI Reservation
We have used this twice. It’s the equivalent of making a hotel reservation but at a resort in a condo. The challenge is it often requires high points, high fees, and a cleaning fee that would not apply to a week’s reservation.
If I didn’t already convince you that you could save a lot of money with a timeshare resale here are some other things to consider:
- Timeshare is an investment, but only if you use it as outlined above.
- Gift weeks to friends or family by using a guest certificate. *Note, guest certificates cost $89.
- Bank your points, roll them over (save them) and borrow from next year.
- Combine many timeshares. For example, you can buy two and roll both into one RCI account.
- Timeshare is a deeded property. Assuming you do not default on maintenance fees, you can transfer it, gift it or leave to the next generation.
- You can sub-lease weeks out using the same process as a guest certificate. I have never tried this, so I can’t give you the specifics. I have read that people have made some money. In some cases, people do this in years; they cannot travel to offset the maintenance fees. Some sites specialize in this, like Redweek.
An industry study by EY (Ernst & Young), revealed that 56 percent of reclaimed timeshares stem from foreclosure. Any research you do will tell you that this stems from financial hardship. If you buy a timeshare and cannot afford to maintain it, then you could end up being the person trying to sell one or worse foreclosing. The article is for those of us looking to take advantage of a foreclosed or resale timeshare that can afford the maintenance fees.
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