Friday, May 11, 2007


There are two main timeshare products on sale in South Africa:
1). Coventional timeshare
2). Points (or sometimes marketed as 'shares')

This is when you invest in a particular resort at a particular time of the year in a particular size of apartment. It is very un-flexible but at least you are guaranteed availabilty each year. The timeshare can be sold for a limited term (ie 20 years) or for in-perpetuity (for life - can be passed on to heirs). Sure, you are told that you can make use of RCI (Resorts Condiminiums International) to exchange to other resorts but often this in uncertain because members of RCI do experience availability problems. Exchanging does attract an exchange fee. This fee is quite expensive for a local exchange but normally a good deal if you exchange abroad. Coupled with these costs you pay an annual levy from R2000 and up. This levy is subject to change and it does go up each year. Should the resort need to raise a special levy for whatsoever reason then you are liable. Some resorts also offer what they call a 'flexi' week which is a more flexible option whereby you can holiday anytime within a prescribed season (low, mid, high, peak1, peak2 & peak3).

So is timeshare a good deal?

It can be a very reasonable guaranteed annual holiday and inflation fighter provided:
1). You buy from a reputable marketing company
2). You buy a 'Gold Crown' (top quality) resort (you will need this if you want to make good exchanges.
3). Check the levy history (and if buying 2nd hand timeshare, that all the levies have been paid up-to-date).
4). You must make use of it each and every year to get the full benefit.
5). Expect to pay anything from R35,000 for a good week (anything less I would be wary of).

These are sold on the basis of you can go anywhere and you can go anytime. This is the least favourable of all timeshare options. The way it works it that the Developer buys timeshare weeks and puts them all into a pool and then markets it on the basis of flexibility. Often you won nothing and always have availabilty problems. STAY WELL CLEAR OF ANY POINTS ORGANISATIONS! Even while some of them may have good intentions of providing members with good annual holiday almost ALL of them fall short of their promises. Ask any points owner what their biggest gripe is and they will tell you that there is NO/LIMITED AVAILABILITY.
You are investing in.............. NOTHING! Sure you get an owners certificate/share certificate but it means nothing. All you have invested in is the right to use accomodation within that developers pool of stock. You still pay a levy (which is marketed as subs or membership fees) which is almost certainly higher than that of any timeshare week within the same time.
Points have absolutely no resale value. Check out the news paper or Junk Mail for second hand points - they sell for a small fraction of their original cost! For example: The Holiday Club (marketed as South Africa's biggest points organisation) sells their points for almost R2000 each. Ten points (R20,000) may give you a week in the lowest of all seasons and the worst of all their resorts. If you try to sell these points to a timeshare resale company you will only be offered in the region of R50 (yes FIFTY RAND) and R250 per point. Calculate your loss!!!!! The reason for there been no re-sale value is the high commissions paid to the sales people combined with the high marketing costs that the marketing companies incur. Out of the initial investment amount up to 65% is used to pay marketing costs and commission, 10% is used for administration and the balance (25%) is used for development costs. Hence, there is NO value to second hand points.


Thoko said...

i bought points last week can somebody advise me if they are good or bad

Anonymous said...

Hells Bells - you are in for a ride if you dont know what you bought! Run, hide - stickaway!