I recently purchased a timeshare property (this property is still
under construction) in Las Vegas (strip) from a Marriot program which
it suggests that I can either use it for vacation, rent it out, or
exchange with Marriot reward points to travel anywhere in the world.
The time I purchase for the property is the final week December (X'mas
+ New Year).  My question is Is timeshare a good investment?  How easy
it is to rent a timeshare property?  Is it easy to sell the timeshare
property as such (Las Vegas - 52th week of each year)?  And does
timeshare like such maintains its value or perhaps increases its
resell value over time?  Need people with timeshare experience to
answer this question.

Thanks

Time shares are an interesting addition to the world of real estate in
recent decades.
First look at their value as real estate:
Let's imagine this unit of time share in Las Vegas is worth $520,000
(an educated guess having never seen the place and not knowing real
estate values in Las Vegas) if you could buy it straight out (as in
buy the whole year and own full property rights to that 1 unit).  To
get the value of the average week during the year, divide that
$520,000 by 52 and that gives you $10,000.  I'd imagine since you
bought this time share new that you paid about $20,000+ for it which
suggests that the actual value of the property is over $1,000,000
(which I highly doubt is the case).

Now let's look at what inflates the cost so much to the origional buyer:
SALES!  The sellers of most time shares offer potential customers a
free vacation and VIP treatment as they are trying to make their sale.
 The cost of offering this free vacation and any other perks they
offer is huge!  They pay out the wazoo to make a sale.  And then most
people turn them down.  So the few people that actually buy the time
share are not only paying for their unit... they also pay for the
salesman's salary, and they pay for their vacation... and what's worse
is that they pay for everyone else's vacation too.  Because of this,
timeshares are usually priced at about 2ce what their actual value is.
 This can easily be seen if you look at the second hand market for
time shares.  The price for 2nd hand units is typically about 1/2 of
the current price for 1st hand units.

So when you buy a new time share for $20,000, the value typically
plummits to $10,000 immediately.  **And let's not forget the annual
"maintenance fee" that is outrageous as well.  They tend to range from
$200 to $600 per year.  Now multiply that by 52 to see what they are
spending on "maintenance"... $500 * 52 = $26,000.  Can you imagine how
nice that place would have to be to spend $26,000 annually on
maintenance?

Well, now that I'm done ranting about the rip off that new times
shares are...  Buying a 2nd hand one and using it to vacation around
the world might not be a bad idea, but I highly suggest taking free
vacations from the time share sellers and never paying for vacation
again.  (I average about 1 week a year on cruises, in orlando, las
vegas, hawaii... on their dollar and have never bought anything but
some plane tickets and docking fees for the cruises.)  If you want to
turn the salesman down when he keeps haggling with you then just lay
out the numbers for him and convince him of how big a rip off it
really is; they tend to back down if you sound knowledgable.

Hi jiajia,

No timeshare experience, but I lived in Las vegas for 6 years.  I can
say with utter certainty that Hotel (and Motel) accomodations in Las
Vegas are totally booked the last week of every year, especially if
that week includes New Year's Eve.  If someone else can advise you on
the timeshare aspect, I can assure you, it will be EASY to rent.

~~Cynthia

I checked the hotel rate for from Dec. 24th to Dec 31 2004, most hotel
don't have rooms available and rates are averaged around $200.  These
rooms are just typical deluxe, no kitchen, no living room.. etc.  I
timeshare property I purchased is very nicely furnished, like an
apartment, it even comes with plasma screen.  Further, it is in
walking distance to the Las Vegas strip.  Now is it fair to rent the
property out for $300 per night?  How easy it is to rent it out?

Renting it out will indeed bring in some nice $$$.  Renting that kind
of unit by the night is quite rare, so you'll be looking at renting
out either a weekend or the full week.  And comparing a weekly or even
a weekend unit to a nightly unit isn't quite apples to apples.  There
will be a discount for the extended time.

Check out this site for reference:
http://www.vacationtimesharerentals.com/timesharesForRentCityState.asp?ResortState=Nevada&ResortCity=Las+Vegas

I would guess for your unit (that keep in mind I haven't seen) during
that peak week would go for $1,500 for the week.  And I'd guess you
paid $20,000 for it.  And yet another guess for the yearly maintenance
fee of $500.

Subtracting the maintenance fee from the rental income, that's a
profit of $1,000 (minus any advertising you do to rent it out or
anything you pay the company to rent it out for you).  That means your
profit is 5% per year (1,000/20,000).  You're much better off putting
money in an index fund where profits tend to average 11% (not to
mention the tax benefits you can get by putting your money in an IRA
or a 401k or the sort)... whereas any profit you get from your rental
will be fully taxable immediately.

Of course all my numbers are imaginary since I don't know the
specifics.  But you're welcome to follow my logic and use your numbers
or post some more realistic numbers on here and I can do the math to
show your profit again.

Just a thought: most timeshares have a 30 day or even 90 day
"cancel-the-deal" policy (those are my own words... they would never
make it that obvious).  This is 30 or 90 days that you have to pull
all your money out (including the origional check you gave them) and
cancel the deal.  If you aren't certain you are happy with the deal
and you're still in that trial period then cancel the deal.  Look at
some 2nd hand time shares in Las Vegas and notice the huge price
difference, perhaps one of those would better suit your investment or
vacation requirements.

Very good advice jack_of_few_trades,

jiajia, you will find this link very useful:

Nevada Administrative Code:  Sec. 6. NAC 119A.255 - 4a
http://www.leg.state.nv.us/register/2001Register/R135-01A.pdf
(a) ?The purchaser of a time share may cancel, by written notice, the
contract of sale until midnight of the fifth calendar day after the
date of execution of the contract [or payment of the purchase price in
cash.?] .?(b) ?The right of cancellation may not be waived. Any
attempt by the developer to obtain a waiver results in a contract
which is voidable by the purchaser.? (c) ?The notice of cancellation
may be delivered personally to the developer or sent by certified mail
or telegraph to the business address of the developer.? (d) ?The
developer shall, within 15 days after receipt of the notice of
cancellation, return all payments made by the purchaser.?


Also, be sure to read the fine print in the Timeshare Contract
relating to "Timeshare Rental Rules" ...

~~Cynthia