Life Audit

The Constant Traveler


Any excursion that the Muskegon, Mich., lawyer takes with his wife, Beth, must correspond with the vacation schedule of the local public schools, where she teaches Spanish.

But Zuwerink wonders if it would make sense to hold a second factor constant as well: location.

Because they love sun and sand, Zuwerink and his wife have been contemplating buying a time-share at a beach resort. The attraction is simple, he says. “It is knowing that you have that place, that there’s no planning.”

And the ability to trade his unit for another in a different locale, enabling a completely different type of vacation, sounds like a great additional benefit.

This flexibility, however, doesn’t come cheap, and Zuwerink wonders if the $30,000 he’s prepared to invest makes fiscal sense. After all, for the same amount, he and his wife could take a lot of trips and stay at fancy hotels or rent luxury condominiums in the resort of their choice.

But he looks at it the other way: “If I am going to go stay at a fancy hotel for a week, doesn’t it make more sense to buy in a time-share and fix my weekly cost?” Plus, he says, there’s the intangible value for a busy couple of avoiding the hassle of trying to find and book good hotel rooms or rentals.

Life Audit travel expert Laura Powell says Zuwerink needs to consider more than just the bottom line when thinking about time-shares.

Powell admits that she is no fan of time-shares. “My general view on buying a time-share is don’t,” Powell cautions. For the money, she believes, it’s “usually cheaper and easier to take a one-week vacation at a place and time of your choice every year.”

Yet Powell concedes that for some, time-shares can be a viable vacation home option—so long as buyers know exactly what they are getting into. The first thing she wants Zuwerink to understand is what he is buying.

According to Powell, time-shares generally fall into one of two categories: fixed-week or floating. Fixed-week time-shares allow the owners the rights to a property at a specific time each year. Floating time-shares allow the owner to reserve a specific amount of time during the year. While this flexibility sounds nice, it can become problematic during peak seasons when everyone is vying for the same time period. “Eager shareholders snap up many of the prime periods very quickly, and the market becomes very competitive,” she says.

Additionally, some time-shares offer deeded interest ownership while others provide right-of-use deals for a defined time period. Such nuanced differences underscore the need to carefully read the fine print of any time-share purchase agreement.

If Zuwerink does invest in a time-share, Powell advises him to purchase in a location where he plans to go every year for a significant period of time. “As you can’t necessarily rely on a trade, pick a property that you will enjoy year after year after year. If, for example, you love skiing, picking a place in Colorado or Montana during the winter makes sense. If you are a beach bum, pick Hawaii or the Carolinas or Florida.”

TOOLS OF THE TRADE

Many time-shares tout the benefit of being able to trade units among a variety of different resorts, but Powell cautions Zuwerink and his wife to examine these policies carefully because trading can be tough.

There are, however, a few things the couple can do to improve their chances of making good trades, she says. First on that list is buying up. “Buy the best unit in the most popular season in the most desirable location, or the largest package you can afford, as this will provide greater exchange flexibility,” she says.

Zuwerink also should verify the resort’s affiliation with an exchange company to facilitate trades. “Learn about the resort’s internal exchange policies and member policies,” Powell says. And don’t forget to ask about the fees for using the exchange to trade time-shares, Powell advises, because most companies charge for this service.

Alternatively, Powell likes the time-share programs that many repu­table hotel chains have started. The hotel units typically are much easier to exchange for units in other locations run by the same company. In addition, hotel time-shares often share facilities and grounds with a commonly owned resort and allow time-share owners to use the resort facilities for no additional charge.

But there is a downside to consider, Powell warns. Unlike typical apartment-style time-shares, the hotel programs usually provide just a hotel room, not a suite or apartment. “That may be OK for a couple, but not for a growing family” or the friends they hope will join them on their vacations.

Powell also wants Zuwerink to thoroughly investigate costs. While the buy-in is straightforward—the costs range from the low five figures to high six figures—there can be unexpected fees for maintenance, management and improvements that can quickly add up. Reputable time-share operators should be able to provide Zuwerink with a statement of these costs, but he also needs to be aware that the additional fees tend to escalate annually.

Before investing, Powell adds, Zuwerink should look for all of the hallmarks of a well-managed time-share, including well-maintained common areas, good housekeeping and friendly service.

Though time-shares can offer a cost-effective vacation home option, Powell still urges Zuwerink to consider all of his options. “You can get a lot of vacation every year for the $2,000-plus you are willing to spend on additionals,” she says. “Add in the several thousand you would be paying each year for the time-share, and you are talking about a huge sum of money for a one-week vacation.”

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Leading, The Small Way

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Focusing a Deposition


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