fools reap the benefits of ownership
right but the reality is things don't
always work out that way and here to
unravel the good the bad and especially
the ugly of timeshares his real estate
expert John Adams John how you doing man
I am well today thank you but I freely
admit that I am prejudiced against
timeshares it's a great marketing
concept unfortunately it's not a
particularly good real estate investment
well we appreciate your full disclosure
right here at the very front of this
okay so the concept though it seems like
it could make a lot of sense right you
spread out the cost among a bunch of
ownership and families and then
everybody's a winner in this right seems
like it should it sure seems that way
and last year the average timeshare sold
for about twenty thousand dollars you
put five thousand dollars down and make
payments of maybe 150 bucks a month and
then once a year you pay eight hundred
and fifty bucks for maintenance and you
get a full week at in heaven that is
free essentially right well if you run
the numbers it's not free and if you
take twenty thousand dollars multiply it
by 50 owners you've got a million
dollars a lot of money even at the beach
and then that eight hundred and fifty
dollars is a maintenance fee multiply
that by 50 weeks somebody's making a lot
of money here and it's not you
so that's Marty on the other end of the
timeshare caliper the only right that's
who makes the money all right so we
talked about four major problems with is
ass break them down I thought there are
the first problem that I have with
timeshares is they are terribly complex
unlike buying a house which is very
standardized and we all do it and the
paperwork's pretty much all the same
with these timeshares they're extremely
complex you absolutely need an attorney
and even then you may not fully
understand what your obligations are
you've got 52 owners of what's
essentially an apartment and and what if
somebody wants to bring their pet well
do we take pets what if somebody wants
to paint the kitchen green do we want
the kitchen green who makes these
decisions the answers are not clear and
anytime you have 52 people I assure you
you're gonna have 52 opinions there's no
doubt about it and it makes for it just
causes controversy
does not work number two things just
life happens right I mean that week may
not work out for you every year for the
rest of your life you know when you are
25 and you've just won a free vacation
to Puerto Vallarta or someplace Cabo San
Lucas and you're you're staying at this
really nice place and they say wow you
just sign this thing you have to come
back every year for free for the rest of
your life the problem is you're not
going to be 25 forever you may not want
to be in Cabo San Lucas at once a year
for the rest of your life and this time
may not work out for you our lives
change we have children we move we we
have different things stages in our
lives right and committing now to a
specific week on st. Simons Island for
the rest of your life every year that's
a that's a tall call and even committed
to this summary number three they don't
generate income you know we talked about
in real estate there are five key
characteristics we're looking for income
depreciation appreciation equity
build-up and leverage okay that was real
quick but those are the five key
characteristics of a real estate
investment with with at I'm sure you get
none of those there's no leverage there
is is no income you if you're allowed to
not go at all I mean you don't have to
go obviously but you are not necessarily
guaranteed the right to rent that if
they would have to do that for you
they're gonna take half of that rental
if they allow it in the first place so
the income is just not there you're
losing money on this deal from beginning
to end but at least they're easy to sale
that sell right that's number four
they're easy to unload right that's the
problem if there's a reason that $5,000
that you pay upfront all of that goes to
the marketing cost the guy that
pressured you he gets that $5,000 and
the reality is when you decide that you
want to sell there's a huge resale
market and almost no takers and that's
because one reason is they're building
millions of new ones all the time the
market is flooded people don't know that
until after they've purchased it's just
not a good investment at any level
that's what we learned today John Adam
says don't buy a timeshare that's right
all right
John thanks a lot and John's gonna be
here for the next hour to answer all of
your real estate questions on our Fox 5
atlanta Facebook page so you definitely
want to take advantage of that a 20s