Recreational Travel

3 Ways to Trav­el Inex­pen­sive­ly in Retirement

17 Ways to Use Your Timeshare

eBook: Resort Time­shares – How to Buy Them, Use Them, and Sell Them

 

3 Ways to Travel Inexpensively in Retirement

by Joseph T. Sinclair

This arti­cle is aimed at retirees who have time on their hands to trav­el a lot. It is a cost com­par­i­son between trav­el­ing in a motorhome, a trav­el trail­er, and using time­share units. It’s not a total cost for each. It’s sim­ply a dai­ly com­par­a­tive cost.

Using a motorhome is like liv­ing in a man­u­fac­tured home. Motorhomes tend to be large and well-fin­ished. Trav­el trail­ers are at the oppo­site end of the scale. They’re small­er but liv­able for those who like a trav­el­ing lifestyle but are will­ing to sac­ri­fice com­fort. Time­shares are typ­i­cal­ly one or two bed­room con­do­mini­ums with full kitchens rang­ing in size from 500 to 1,500 square feet.

For a motorhome and a trav­el trail­er the fol­low­ing assump­tions were made:

• Use of the RV for 6 months (26 weeks) of the year and 6,000 miles
• The dif­fer­ence in gas cost for 6,000 miles a year between dri­ving a motorhome or pulling a trail­er and dri­ving an SUV
• 9 MPG for a motorhome, 12 MPG for pulling a trav­el trail­er, and 18 MPG for an SUV
• Gas @$4/gallon
• A sale at the end of five years for the ini­tial pur­chase price less 10% of the pur­chase price for each year owned
• Year­ly RV main­te­nance (not includ­ing vehi­cle maintenance)
• Stor­age cost of the RV for 6 months of the year

There are some retirees who trav­el in an RV full time, but they are the excep­tion. Retirees typ­i­cal­ly trav­el only part of the year in their RVs, and the half-year peri­od assumed is like­ly above aver­age but is a con­ser­v­a­tive esti­mate when cal­cu­lat­ing a dai­ly cost. The assump­tion of 6,000 per year of RV trav­el requires more gas to pow­er a vehi­cle than just an SUV or car trav­el­ing the same miles.

The year­ly main­te­nance is for the RV but does not include the non-RV por­tion of the vehi­cle (e.g., motor, tires, etc). When an RV is not being used, a $100/month rent is assumed for a motorhome and a $60/month rent is assumed for a trav­el trailer.

RV parks are not cheap. It is assumed that a motorhome will cost $40/day and a trail­er will cost $35/day to stay in an ade­quate full-ser­vice park. Many parks cost more. Some cost less. And it is pos­si­ble to stay places where there is no cost. The assump­tion made seems realistic.

For a time­share the fol­low­ing assump­tions were made:

• One-bed­room condominium
• Pur­chase price vary wide­ly, but the assump­tion is that you get back when you sell exact­ly what you paid (assum­ing you bought on the time­share sec­ondary mar­ket); so there is no amor­ti­za­tion of pur­chase price
• The time­share unit is in a point-sys­tem time­share organization
• $350 per week maintenance

The typ­i­cal time­share is a two-bed­room con­do­mini­um unit for one week dur­ing high sea­son. For time­shares on a point sys­tem, typ­i­cal­ly a one-week own­er can get two weeks per year use by using only a one-bed­room unit and stay­ing one week in low sea­son. The typ­i­cal annu­al main­te­nance per week of own­er­ship is $700, but with two weeks use that amounts to half as much ($350) per week.

Motorhome

Pur­chase price $100,000

10% of $100,000 pur­chase price/year price depre­ci­a­tion for sale  price = $10,000 × 5 years = $50,000 cost of ownership

6,000 miles per year x 5 years = 30,000 miles @ 9 MPG = 3,333 gal­lons x $4 = $13,332

6,000 miles per year x 5 years = 30,000 miles @ 18 MPG = 1,666 gal­lons x $4 = $6,664

$13,332 – $6,664 = $6,668 gas expense attrib­uted to motorhome

$1,000 RV main­te­nance per year x 5 years = $5,000

$100 per month stor­age x 6 months x 5 years = $3,000

$40 per day RV park fee x 180 days per year x 5 years = $36,000

$50,000 + $6,664 + $5,000 + $3,000 + $36,000 = $100,664

5 years x 180 days per year = 900 days

$100,664 ÷ 900 = $112 per day

Travel Trailer

Pur­chase price $20,000

10% of $20,000 pur­chase price/year price depre­ci­a­tion for sale  price = $2,000 × 5 years = $10,000 cost of ownership

6,000 miles per year x 5 years = 30,000 miles @ 12 MPG = 2,500 gal­lons x $4 = $10,000

6,000 miles per year x 5 years = 30,000 miles @ 18 MPG = 1,666 gal­lons x $4 = $6,664

$10,000 – $6,664 = $3,336 gas expense attrib­uted to trav­el trailer

$750 RV main­te­nance per year x 5 years = $3,750

$60 per month stor­age x 6 months x 5 years = $1,800

$35 per day RV park fee x 180 days per year x 5 years = $31,500

$10,000 + $3,336 + $3,750 + $1,800 + $31,500 = $50,386

5 years x 180 days per year = 900 days

$50,386 ÷ 900 = $56 per day

Timeshare

Pur­chase price varies and sales price exact­ly the same (no depreciation)

26 weeks of own­er­ship ÷ 2 weeks of use = 13 time­shares purchased

$700 per year main­te­nance per own­er­ship week  x 13 = $9,100

$9,100 ÷ 180 = $51 per day

In a point-sys­tem time­share orga­ni­za­tion, you can stay at a vari­ety of resorts (with­in the orga­ni­za­tion – e.g., Wyn­d­ham, Mar­riott)  by trad­ing inter­nal­ly and are not rel­e­gat­ed to stay­ing in just the time­share unit you own. You can also exchange for time­shares in oth­er time­share sys­tems through an inter­na­tion­al time­share exchange (e.g., RCI), but that costs extra mon­ey. In sum­ma­tion, a point-sys­tem time­share will enable you to get two weeks use for one week of own­er­ship and enable you to stay at mul­ti­ple resorts.

Comparisons

The assump­tion is that retirees trav­el­ing will go from place to place around the US for six months each year enjoy­ing their retire­ment and their traveling.

Habitation

Time­share units are the most com­fort­able. They are con­do­mini­um units—just like liv­ing at home. At many places they are qua­si-lux­u­ri­ous or even lux­u­ri­ous. They are sel­dom sub-standard.

Motorhomes are com­fort­able too. Although con­strict­ed in size, they are nice­ly fin­ished and have ade­quate room.

Trav­el trail­ers can be as large as motorhomes. How­ev­er, the 20-ft trav­el trail­er in this com­par­i­son is con­strict­ed in size and can­not be con­sid­ered as com­fort­able as a motorhome or time­share unit.

Settings

Time­shares typ­i­cal­ly have nice (often lux­u­ri­ous) ameni­ties and attrac­tive surroundings.

RV parks are sel­dom lux­u­ri­ous and typ­i­cal­ly pro­vide just a slot of space in a facil­i­ty that is con­sid­ered sec­ond-rate com­pared to most time­share resorts

Locations

Time­shares are most­ly locat­ed in desir­able resort loca­tions. How­ev­er, time­share resorts are num­bered in the hun­dreds, and the vari­ety of places you can vis­it is lim­it­ed. Some states have no time­share resorts. Oth­ers states have only one or two. Orlan­do, Flori­da has one-third of the time­share resorts in the world leav­ing the remain­der of the coun­try sparse­ly populated.

Although time­shares are usu­al­ly well-locat­ed, the term well-locat­ed often means locat­ed in a resort area rather than locat­ed on a lake, riv­er, beach, or adja­cent to oth­er nat­ur­al attractions.

RV parks are ubiq­ui­tous. You can find RV parks any­where and every­where. They num­ber in the thou­sands. There are RV slots at many camp­ing grounds. And there are camp­ing grounds in some spec­tac­u­lar loca­tions such as state and nation­al parks. It is not unusu­al to find RV parks on lakes, rivers, beach­es, or next to oth­er nat­ur­al attactions.

All in all, the num­ber of spec­tac­u­lar places avail­able to motorhomes and trav­el trail­ers is far greater than those avail­able to time­share users as is the total num­ber of places. How­ev­er, the amen­ties in RV loca­tions are often substandard.

Habitation Expense

It’s dif­fi­cult to reduce your habi­ta­tion expense using time­shares. The best you can do is buy them for a low price up front on the sec­ondary mar­ket. You have to make your main­te­nance pay­ments over which you have no control.

With a motorhome or trav­el trail­er you can reduce your expens­es a lit­tle by chang­ing the places you stay. For instance, you can stay more often and longer at places that are free rather than at places that have a high dai­ly fee. In addi­tion, you have more choic­es of places to go and can vis­it places with a low­er cost of liv­ing. Time­share resorts are often in places with a high cost of living.

As is shown in the finan­cial cal­cu­la­tions above, how­ev­er, a motorhome costs con­sid­er­ably more as a habi­tat than a time­share unit. A trav­el trail­er costs less than a time­share unit.

Note that if you include financ­ing for the motorhome, trav­el trail­er, and time­share, the out­come is dif­fer­ent. The motorhome is going to cost a huge amount of inter­est and the trav­el trail­er only one-fifth as much. The inter­est cost for the time­shares depends on the pur­chase price.  For expen­sive time­shares it will be like the motorhome. For inex­pen­sive time­shares, it will be more like the trav­el trailer.

The typ­i­cal cost of a time­share from a time­share devel­op­er is $15,000 to $25,000 per week. At that price, the 13 time­shares would be off the scale com­pared to motorhomes or trav­el trail­ers. In the cur­rent mar­ket, how­ev­er, where you can buy time­shares for a less­er price on the time­share sec­ondary  mar­ket, the time­share alter­na­tive may be attractive.

Final­ly, keep in mind that you don’t have to buy a new motorhome or trav­el trail­er. You can buy a used one in top shape for a fac­tion of the cost of a new one and expe­ri­ence much less depre­ci­a­tion over a five-year period.

Why Inex­pen­sive?

Why do I call these three options inex­pen­sive? Com­pared to what you would pay for com­pa­ra­ble hotel or resort motel suites, the cost of these three options seem rea­son­able. Typ­i­cal­ly, com­pa­ra­ble suites cost $125 to $350 per night depend­ing on the resort and the season.

Nonethe­less, you have mon­ey tied up in motorhomes, trav­el trail­ers, and time­shares. I haven’t con­sid­ered the cost of such mon­ey regard­ing the lost oppor­tu­ni­ty to invest in some­thing that would pro­vide an invest­ment return. In addi­tion, many peo­ple will have to bor­row the mon­ey to pur­chase a motorhome, trav­el trail­er, or time­share. As men­tioned above, I haven’t con­sid­ered the cost of such mon­ey (the inter­est) to be paid.

Con­se­quent­ly, to make a defin­i­tive com­par­i­son you will need to cal­cu­late your own fig­ures based on your finan­cial means of acquir­ing one of the three options. I have pro­vid­ed you a start, and you can add the facts of your own prospec­tive acqui­si­tion to deter­mine a final comparison.

17 Ways to Use Your Timeshare

by Joseph T. Sinclair

There are a lot of ways to use a time­share con­do­mini­um. This arti­cle cov­ers 17 of them.

Exchange

The clas­sic use of a time­share is to exchange it for anoth­er time­share. There are sev­er­al large time­share exchange orga­ni­za­tions that make this pos­si­ble for a fee. Bored with your cur­rent time­share after a few years? Don’t sell it. Don’t ignore it. Exchange it. Go some­where new.

Most time­share orga­ni­za­tions facil­i­atate inter­nal exchang­ing enabling you to exchange for a anoth­er time­share week at a resort with­in the orga­ni­za­tion for a min­i­mal fee or no fee at all.

A pop­u­lar way to use a time­share is to buy it specif­i­cal­ly for exchange and to go some­where dif­fer­ent every year. To do so you need to buy a time­share in a pop­u­lar place at a pop­u­lar time of year. That will give you max­i­mum trad­ing power.

Vacation Near Home

You don’t nec­es­sar­i­ly have to go far away. Vaca­tion near home. Save the trav­el expense. Be close to your fam­i­ly and busi­ness but still have a place where you can go, relax, and get away from it all. If there’s a time­share resort near you, check it out.

Com­ment: There’s a time­share resort in Napa 25 min­utes from my house. Every time I sug­gest we do an exchange with our Col­orado time­share (1,100 miles away), my wife wants to go to Napa for a week.

The Big City

Some of the more pop­u­lar cities have time­shares. You don’t have to go to a ski, beach, or golf resort. You can vis­it a time­share in a city and make the city your play­ground. Plan well ahead, though. City time­shares tend to be popular.

Retirement Benefits

If you’re retired, you’ve hit the jack­pot. You can max­i­mize your exchang­ing pow­er by tak­ing your vaca­tions off sea­son. Many resorts have great weath­er and inter­est­ing activ­i­ties in the spring, fall, and win­ter when fam­i­lies don’t trav­el because the kids are in school. That means you can trade into such resorts with a min­i­mum of exchang­ing pow­er because it’s low season.

Addi­tion­al­ly, the exchange orga­ni­za­tions sell off time­share weeks at rock bot­tom prices for the off-sea­son. You can get some real deals. I’ve seen prices as low as $199 for a week’s stay. That’s $29/night, as cheap as a tent site at KOA.

Half and Half

Who says a hus­band and wife have to take a vaca­tion togeth­er? They can be togeth­er with­out the vaca­tion. For instance, sup­pose you like to play golf but your wife doesn’t. You can go to a golf resort and play for a week while she works on her lap­top in the sec­ond bed­room. She can relax more but still get more done than she does in the office.

For your next out­ing, you go to a ten­nis resort where she plays all week while you work on your lap­top in the sec­ond bed­room. Beats stay­ing at the office.

Family Reunion

Time­shares can make great fam­i­ly reunions. First, you have to have a fam­i­ly that want to meet up each year. Then each fam­i­ly can buy a time­share to enable all the fam­i­lies to meet in the same place, same week each year.

Anoth­er vari­a­tion is one fam­i­ly mem­ber owns a sec­ond home. It’s not big enough to accom­mo­date the entire extend­ed fam­i­ly. A time­share week or two can make a nice addi­tion to the sec­ond home to accom­mo­date everyone.

Theme Vacationing

Many peo­ple like theme vaca­tions. For instance, a golfer may want to play a dif­fer­ent pre­mier golf course every year. With advanced plan­ning each year, a time­share will enable this vaca­tion theme with low­er costs and larg­er accom­mo­da­tions than stay­ing at a resort hotel.

Short-term

Many time­share resorts oper­ate on the point sys­tem today. You don’t get a week. You get points equiv­a­lent to a week. Instead of using your points for a week, you can use them for short­er stays. Some resorts even allow you to use points for just one night.

If you can’t take a week’s vaca­tion this year, at least use your points for short­er stays.

Long-term

If you’re on a point sys­tem and have enough points to stay in a two-bed­room unit for one week of high sea­son, you’ve got pos­si­bil­i­ties. You may have enough point sto get as many as three weeks in a one-bed­room unit in low sea­son. Three for one. Not a bad deal con­sid­er­ing that you don’t have to pay extra.

Business Retreat

A busi­ness can hold a time­share retreat each year in the off-sea­son for key employ­ees at a low cost with nice accom­mo­da­tions. In oth­er words, you can get a good deal for your busi­ness. Resorts are not as busy off-sea­son mak­ing a retreat more relax­ing and per­haps more pri­vate than dur­ing the high season.

Business Reward

If you own a busi­ness, you might con­sid­er buy­ing some time­shares for employ­ee (or cus­tomer) incen­tives. Each year you can award the weeks to deserv­ing employ­ees togeth­er with an extra week’s vaca­tion for each.

Guest Room

If you have a choice, always go for the largest suite (the most bed­rooms). That gives you the oppor­tu­ni­ty to invite fam­i­ly mem­bers or best friends to stay with you.

Kitchen Savings

Most time­shares include a full kitchen. This is a real ben­e­fit for those on a bud­get. You can save a lot of mon­ey doing your own cook­ing rather than eat­ing in restau­rants while on vaca­tion. But make it fun. Try out those exot­ic recipes that you nev­er seem to have the time for at home.

Out of School

To max­i­mize your trad­ing pow­er, take your vaca­tions in the off-sea­son to save mon­ey and resources. It’s a strug­gle to get the kids out of school, but not impos­si­ble. Get all their class­work assign­ments ahead of time, and have them do their school­work the first thing each morn­ing. With no peer dis­trac­tions, they will fin­ish quick­ly and still be ready for the day’s activities.

Extended Vacation

No one says you have to stay a week. You can stay two weeks, or three. You just need an extra time­share or two. If you like a place and want to spend more time there every year, a time­share stay makes an eco­nom­ic choice.

Second Home

This is the extend­ed-extend­ed vaca­tion idea, one I use myself. I spend eight time­share weeks every sum­mer in Pagosa Springs. Every sum­mer I get the insane idea that I might like to buy a sum­mer home there. Since I would prob­a­bly use a sec­ond home only for eight weeks in the sum­mer and per­haps two weeks in the win­ter, the time­share strat­e­gy gives me almost the same ben­e­fits. But when I com­pare the costs, the time­share is so much cheap­er and so much less trou­ble that I rein in my insan­i­ty and for­go the bur­den of run­ning a sec­ond home.

Same Old Place

There’s no ques­tion that many peo­ple buy a time­share, use it s few years, get tired of it, and aren’t sure what to do with it. But that isn’t every­one. There are plen­ty of places that you might be delight­ed to vis­it again and again each year indef­i­nite­ly. Noth­ing wrong with that. And if you do even­tu­al­ly want to go some­where else, you can always exchange.

The author of this arti­cle, Joseph T. Sin­clair, is the author of twen­ty How To books pub­lished by nation­al publishers.

For low-cost non-exclu­sive reprints rights for these arti­cles, con­tact sales@AppworthMedia.com.