June 16, 2006, Newsletter Issue #3: Timeshare Savings
Tip of the Week
Way in the bygone days of timesharing, developers frequently used the 10-year savings formula for ascertaining the value of a timeshare. Owners needed to look at timeshares as a long-term item. The 10-year savings guideline is one of the ways to determine the resale value of a person’s timeshare.
Ten year savings example for a studio timeshare at the Whaler in Maui, Hawaii purchased in 1992:
Equivalent hotel/day - $ 150
Timeshare maintenance - ( 40)
Hotel savings - 110
7 day savings - $ 770
$5,500 4% 1992 CD loss - ( 220)
Adjusted annual savings - $ 550
Ten Year Timeshare Value - $5,500/wk
You will note that the timeshare will pay for itself in 10 years. Therefore usage and resale after that time period is pure profit. If you compare this on the premise, that if you use your CD savings for your annual vacations, your savings will be gone in less than 6.5 years!
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