So We Went on a $225,000 holiday...

Hi Scott,

We bought 36,000 points in Wyndham Vacation Resorts, but we were retrenched two years ago and have had only part-time employment since then and are struggling to keep up with the club fees of $219 per month. My partner needs two operations over the next year, and we don’t expect to be able to go on holiday anytime soon, or for any extended period in the future. We are considering just not paying the club fees anymore and forfeiting our points. What would be the consequences of doing this?

Amy

Hi Amy,

Oh for the love of coconuts!

You bought into a timeshare? Really?

Okay, I’m going to take my blood pressure pills and read their very glossy product disclosure statement (PDS). I’m guessing you haven’t read the PDS -- if you had you wouldn’t have given them a cent.

If you don’t pay your annual fees, the manager will slug you a $15 fee for every reminder letter, and charge you 15% interest on the amount due. They may also appoint a debt collection agency.

If you still don’t pay after a final demand, you forfeit your entire membership, not just your points for the year, which Wyndham will ‘attempt’ to sell for the full price. There’s no guarantee you’ll receive anything back at all.

You have the right to lend, give or sell your membership -- but, as Wyndham point out, you shouldn’t expect to get anywhere near what you paid. The only ‘bargain’ you got was in the beginning, when they bribed you with the free tickets to Sea World to sit through their high-pressure pitch-fest.

The current price for a membership with 36,000 points is $86,940.

Good lord.

If you’d put that money, plus your $219 a month, into a good Listed Investment Company (LIC), it would be worth around $225,000 in ten years’ time -- at which time you’d be earning $11,250 a year in dividends. That’s enough for a very nice holiday to wherever the hell you want. Plus massages.

You can sell your membership privately -- either on eBay or Gumtree, or through a number of web-based services which specialise in resale of timeshare ownership (though it’s unlikely you’ll recoup much of your initial cost). That’s what I’d do.

Scott

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