“Hey, pal, let’s make a deal. You can be in the taxi business just like that! Here’s how. You buy my cab, see? You own it, pay the note on it, handle the maintenance, all that stuff. But you won’t have to work all those crazy hours driving the cab, see? I’ll drive it for you, and we’ll split the meter. How can you lose?”
Or, to put an even funnier spin on it: What, would you suppose, is an even stupider real estate “investment” than a time share?
The Wall Street Journal has all the answers…
Technorati Tags: investment, real estate, real estate marketing
The Mortgage Cicerone says:
Greg – You don’t know how right you are on this. Very needed post!
April 7, 2008 — 11:15 am
Greg Swann says:
Bless you, sir. Thank you.
You can almost forgive people for getting sucked into the glamour of Las Vegas or Miami Beach, even though you have to know that the hotel is going to rent its own inventory first. But at the height of the frenzy they tried to condotel a run-down Best Western a few miles from my house. Want to own your own perpetually empty 300sf hotel room? Only $160,000. Jeesh!
April 7, 2008 — 11:27 am
Richard Nikoley says:
Greg:
You forgot: “And when you come to town, you ride for free!”
Actually, there’s a timeshare company my wife & I love: Worldmark (http://www.worldmarktheclub.com/)
We’ve purchased credits three times (now 19,000, about total 3 weeks per year in a average one bedroom, living, dining, kitchen), all on the secondary market for way less than the company sells them for.
We never looked at it as an investment, but a great way to vacation and to have weekend outings. We once rented three tree-bedroom, 2400 sq ft condos in Angels Camp, CA for a big family outing, all on points we had in the bank. Only a points/credits system has that kind of flexibility.
April 7, 2008 — 11:43 am
Greg Swann says:
> all on the secondary market for way less than the company sells them for.
I’ll give you that much, certainly: Depending on the convenants on resale, it’s plausible to me that an after-market condotel unit could be cheap enough to be profitable in the long run.
April 7, 2008 — 11:59 am
Robert Kerr says:
Aside from a fully-deductible primary residence, every real estate option is, at best, a mediocre investment over the long term.
It was easy to forget that between ’01 and ’06 but slowly and surely, those who forgot are all relearning that lesson.
April 7, 2008 — 1:58 pm
Michael Cook says:
Please never use investment and time share in the same sentence. Its so outrageous that there should be a law against it.
Now reselling timeshare to other suckers, that could be well worth the investment.
April 7, 2008 — 2:05 pm
Craig Tone says:
I sometimes like the free lunch and promo weekend vacation while listening to a two+ hour timeshare pitch. That’s not a bad investment.
April 7, 2008 — 6:25 pm
John Wake says:
I guess you won’t be in the market then for the domain name ArizonaCondotels.com.
A condotel, by the way, isn’t a time share. You own the entire unit.
There’s not a ton of condo-hotels in Arizona.
Very difficult to list and get shown if they are being used as a daily rental. You need to coordinate with the hotel to find out if it’s available to show that day. A real pain.
Then you have to explain the whole condotel concept to buyers.
The “condo” fees are often steep because you are in a resort, although the amenities are great. If you can cover the condo fees with the rentals, you are not doing bad.
It not uncommon for the hotel to take 50% of the lodging fee.
April 7, 2008 — 8:52 pm