Timeshare Retirement. Some people think of buying a retirement home in a prime location on the lake or at the beach. Some people think of buying an RV and becoming traveling gypsies. How about achieving both?
When you think of timeshare retirement the possibilities are endless! Imagine having a first class condo in over 4000 locations around the world.
Beats living in an RV all to heck! Besides, last time I checked, they haven't made RVs that fly yet!
I've always wanted to be more than a visitor nearly everywhere I've visited that I really enjoyed. You know, not only understanding the local culture, but blending right in.
Can you imagine experiencing the world say a month at a time instead of a week? Or even three months at a time. That would be retirement heaven to me! A little bit of bohemian gypsy and a little bit of nesting all wrapped into one.
Timeshare retirement makes that possible! Let's see, the first place worthy of a three month visit would have to be Greece. Why? I love history, of course, but I have to admit I'm crazy about Greek food. It is my absolute favorite.Check out some hings to do in Greece...
The white-washed houses with bright blue shutters surrounded by white sand and turquoise water doesn't hurt! And is it just me, or does everyone else perceive Greek culture to possess an indomitable zest for life?
Yes, I could live there for three months. But then my wanderlust would kick in, with the rest of the world beckoning and my gypsy spirit would be ready to wander again...to Brazil!
Now Brazil, I might have to stay there for six months! So many reasons. The gypsy in me is a little afraid of visiting Brazil for fear I'd never want to leave! I suppose the politics would keep that in check.
It's mostly the music, the rhythms have always been infectious to me and I'd want to stay long enough to plant them more firmly in the core of my soul, so they could never leave me where ever I go.
I do love rodizio (fresh, grilled meats cut off skewers and served by a gaucho) and feijoada (an incredible stew of black beans, sausage and yummy spices), farofa (toasted cassava) and refried collard greens.
But I try to stay away from caipirinhas, the most delicious drink made with cachaca (a Brazilian liquor), lime, sugar and ice all crushed together, because I'm just not good at drinking alcohol no matter how good it tastes!Check out some things to do in Brazil...
There is so much tropical beauty to explore in Brazil, such a rainbow of cultures that intrigue me. So, so much! But I still have three months left in my first year of timeshare retirement. Hmmm. Let's see.
Oh, I know, I'd like to spend a month out at sea on a sailboat! I love cruises. I'd like to see what it would be like to live on a sailboat. And why not live on a sailboat sailing around the South Pacific? I'd love to sail into the ports of Tahiti, Fiji and Samoa.
I have some friends from Samoa. One guy told me that it is a tradition for the men of Samoa to have the history of the island tattooed from their knees up to their waist! Wow! I'd like to see, well, some of that history!
Everyone I know from the polynesian islands are full of a joy I'd like to experience first hand. I can and see what it's like to live at sea all at the same time!
Two months left in my first year of timeshare retirement. Okay. I'd like to spend it traipsing around South East Asia. Thailand, Indonesia, Taiwan, Hong Kong, Malaysia, Philippines and Singapore.
We'll be gypsies here because I want to get a feel for where I might like to visit longer. Right now, I think the Philippines will be a place I could stay for a while -- it will be fun to see!
Not bad for my first year of timeshare retirement, huh? Greece, Brazil, South Pacific and South East Asia? And there's so many more places to go! Now be honest, doesn't this easily surpass owning a retirement home on ONE beach or by ONE lake? Doesn't this beat the heck out of living in an RV?
I know what you're saying, "Well, yeah, but who can afford it?"
Well, here's the amazing part! It's a LOT cheaper than buying a retirement home in any of the prime locations you'd be able to stay in with a timeshare retirement plan!
According to an August 21, 2006 Money Magazine article, "Between 2001 and 2006, the median home price in the 30 top vacation markets rose 120 percent according to David Stiff, senior economist for Fiserv Lending Solutions - nearly twice as much as the appreciation in primary markets."
The article also points out that second-home prices are even more vulnerable to a downturn. They provide Naples, FL as an example, with a nearly 40 percent appreciation between the fourth quarters of 2004 and 2005.
But that number turned sour and dropped 48 percent between June 2005 and June 2006 according to the Florida Association of Realtors. Yet median prices? They only fell 8%. That math just doesn't work for me!
As a result, financial advice recommends buying a second home only with an eye to consumption rather than investment. But here's the catch for me. That's no different with purchasing timeshare, and enjoying a timeshare retirement, but do I really want to go to the same place every year?
Do I really want to manage and pay for the entire property, maintenance, repairs, security, property taxes, association fees and insurance all on my own? Do I really want to worry about it when I'm not there?
Or does it make more sense to share those expenses with others and be able to choose from over 4000 first class accommodations in prime locations around the world with no worries?
Kind of a no-brainer, isn't it?
As a safe rule of thumb, your overall housing costs should only be one-third of your overall income, including mortgage, maintenance, property taxes, association fees, insurance and travel expenses.
So let's take a look at a price comparison. According to ARDA (American Resort Developers Association), the average price for a timeshare week in 2006 was $18,000.
If you plan to spend all 52 weeks in a timeshare, that would amount to $936,000, assuming you didn't receive a discount for purchasing a year's worth of timeshare, which is unlikely, but we'll be extremely conservative.
To calculate the maintenance fee, I've experienced a .024 ratio with Worldmark and a .037 ratio with Polo Towers. So if we use this ratio and you purchased 52 weeks worth of timeshare from Worldmark, you'd pay $22,464 annual maintenance fee, with a 5% annual increase cap (Worldmark maintenance fees have actually only increased a total of 3% since 1989 when they began. See The Best Bottomline to see why!).
If you purchased Polo Towers you'd pay a $34,632 annual maintenance fee -- unfortunately Polo Towers doesn't have a cap that I'm aware of, and the ratio has increased to .043%, since I purchased in 2000. That would make it $40,248 per year today with Polo Towers.
So, in summary, if you paid $936,000 and as much as $40,248 in annual maintenance fees, how does that compare to purchasing a retirement home in a hot vacation spot?
According to EscapeHomes.com, nearly two-thirds of vacation home shoppers prefer a home on the beach. Combine that wish with a limited supply of sand and beach house prices have boarded a space ship for another galaxy!
According to information compiled for Money Magazine by Realtor.com, the AVERAGE asking price for homes on the beach in Destin, FL is $2.1 million. How about Bar Harbor, Maine? $3 million. Malibu, CA? $6 million.
Those are great places to visit, but why would I want to go there every year if I don't have to? Why would I pay that price tag when I could pay $936,000 and go all over the world? Even with the added travel expenses for timeshare retirement, I still come out millions ahead!
And the maintenance, insurance and taxes costs? Which do you think is going to cost more? Looking at averages for any home, MSN Money suggests to budget a minimum of 1% - 3% for annual maintenance costs.
The National Association of Insurance Commissioners reports that the average cost of homeowners insurance was $835 per year on a $227,000 home in 2006, which is .037%.
Then according to HousingEconomic.com, for property taxes our three beach house examples would be paying $7.89 per $1000 in Destin, FL, $11.22 per $1000 in Bar Harbor, ME and $4.77 per $1000 in Malibu, CA. Let's add it up!
x 3% maintenance = $63,000
x 3.7% insurance = $77,700
x $7.89/$1000 property tax = $16,569
(Not including your mortgage payment on $2.1 million.)
Bay Harbor, ME
x 3% maintenance = $90,000
x 3.7% insurance = $111,000
x $11.22/$1000 property tax = $33,660
(Not including your mortgage payment on $3 million.)
x 3% maintenance = $180,000
x 3.7% insurance = $222,000
x $4.77/$1000 property tax = $28,620
(Not including your mortgage payment on $6 million.)
Timeshare Retirement - 52 Weeks Around the World
x 4.3% maintenance fee = $40,248/year
(includes maintenance, insurance and property taxes)
Now do you believe me?! And, honestly, these numbers on our beach house examples are really TOO conservative because they are the averages for all homes, not multi-million dollar homes!
If you owned a $6 million beach house in Malibu, are your security, maintenance and insurance costs really even comparable to a ranch house in Iowa?
Even if you added travel expenses for traipsing around the world and exchange fees with timeshare retirement, there is still such a vast difference in costs!
Yet with a timeshare retirement plan, you would be staying in the absolute prime locations like Destin, FL and Bay Harbor, ME and Malibu, CA and better! Uh, how about Greece, Brazil, Polynesia and South East Asia?
Timeshare retirement makes so much sense.
Are you ready to be a gypsy in style?
For more retirement living tips see http://www.retirementinvestigator.com
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