Trip Coach: May 8, 2007

Brackney, PA: On the basis of dollars per square foot that they collect over the 52 weeks per year that they sell the fractional ownership, time-share developers are getting at least 10 times what it would cost to build an identical hotel/condo. Then come the annual maintenance fees, taxes, etc.. I've never seen a time-share that you couldn't duplicate for much less money by simply paying the nightly rate, and having the total freedom to stay wherever you want, at any time of the year. What am I missing?

Lisa Ann Schreier: Interesting points you make. There are two separate issues here. The first one is correct...the developer of the resort is in fact making TONS of money. Just as the developer of the hotel is.

However, if you are spending money one way or another, you need to be concerned about what your money is getting you, not the developer or the owner.

Generally speaking, if you vacation 7 or more nights a year, spend more than $80 a night and plan on doing that for more than 7 years, you will save money with the time-share in the long run.

Bottom line is this...if you stay at hotels for 10 years and stop going on vacation you can't sell your hotel receipts. If you buy a time-share, use it for 10 years and sell it for half of what you paid for it, you will still win using time-share!

Hope this clears things up.

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Los Angeles, CA: Is it difficult for a purchaser of a time-share-vacation club property to get a mortgage loan on the purchase?

Lisa Ann Schreier: Yes, it can be difficult. Developers will almost always offer you in-house financing...at insane rates...typically more than 15.9%. A bank will generally NOT give you a mortgage for a time-share. Instead, where laws allow, I recommend using a home equity loan or a home equity line of credit.

If you do have to use the developer's financing, please make certain that it is "simple interest with no penalty for pre-payment" and pay it off sooner than the loan term.

The only advantage to developer's financing is that if you own a home, in most cases, the interest is tax-deductible.

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Denver, CO: Hi Lisa,

When in Mexico two years ago we bought what I'd call Time Share Lite - 10 coupons for lodging at any of RCI's properties.

I have since tried to book several different locations and they were all unavailable - and two of my certificates have now expired.

Do I have any recourse?

Thanks

D