Running the Numbers

So, some of you might be wondering why we all went on an extended weekend down to Williamsburg, Virginia, despite the fact that it's the off season, and so many of the attractions (see the aforementioned Busch Gardens post) are closed.

Well, about a month ago, we went to computer show, and picked up a new (used) laptop for my daughter, and my wife filled out an entry form, and we got a call for a timeshare (they call it a vacation share) in the area which included their giving us space in one of their vacation condos for 3 days.

We talked about it, and we decided that this would be a lot of fun, and listening to a sales pitch would be well worth it.

We declined their offers, which by the way got sweeter and sweeter as time went on, pleading poverty, which is only half true.

The other half is that I can do basic math in my head, I are a mechanical engineer after all, and their numbers were simply not that good.

Basically, the spaces were set up as townhouses, with two apartments, each being a 2 bedroom with a decent kitchen and living space, nice bedrooms, and a kickass master bathroom, it included a jacuzzi, a separate shower, and a toilet in its own separate room.

The basic offer was around 10 grand, with a down payment of 2-4K with a 6-8 year loan at 7 percent, and around a $500 a year maintenance fee.

All this for a complex that was about 5 miles away from the Colonial Williamsburg Historic Area.

They talk about this, and show how, for decent, and honestly not as good, hotel space, you would be spending $30K over the next 30 years for lodging, and then discuss how this is a prime location that could be swapped for other space.

Well, ignoring opportunity costs, the economic fact that dollars spent today are worth more than dollars spent later, let's look at the numbers.

You get 2 weeks a year, either fixed (the cheap option I describe above), or floating, so you are paying for 2 weeks out of 52.

Let's be charitable, and say that you are paying for ¹⁄₂₅of a year, or ½ a month.

This makes purchase price around $250,000.00 (10+K x 25) and the maintenance fee equivalent to about $1000.00 a month.

Note that this is all in the suburban areas of Williamsburg, where nice houses are well under the price that they asked (annualized) if you are more than 5 blocks from historical area/William and Mary College, and then you have a $1000/month rent maintenance fee.

When you consider the fact that the developer did this on what had been soybean fields at some point in the past 3 or so years, it's certainly a good deal for them.

Obviously for certain people, those who are certain that they will hit the area year after year, and who might want to swap a week with someone in some other location, it might make sense, but for most of us, this is simply not a sensible financial or lifestyle decision.

As for me, I want to vacation in different places, or to visit with family, which makes it even less attractive to me.

Still, I don't mind the 2 or so hours that I spent on the sales pitch, along with having to say "no" to the very earnest sales person, it was worth it for the rest of the weekend, which was a lot of fun.