In the area of “Timeshares” there has been some positive movement as of late.
Even though we recommend that those who buy into Timeshares have high discretionary income and have adequately addressed their finances in all areas—we realize that when Timeshares are promoted they can often be difficult for some to resist.
What Exactly Is A Timeshare?
With a Timeshare you are basically purchasing the privilege to utilize a luxury accommodation in a resort or hotel for one week or another time frame that would be specifically spelled out. You would then be able to take your vacation and enjoy it in a resort type setting.
Most Timeshares are corporately developed and managed by the major players in the resort and hospitality industry. As of 2012 Timeshares in major cities were increasing and you can now buy into a Timeshare in many of the major cities in the United States.
The “upfront” price is based on the size, location, amenities and the time of year that you visit. The prices can range from $5,000 a week to as high as $50,000 a week depending on your choice and package.
You normally would purchase for a specified number of years or for the remainder of your life—unless you sold the Timeshare!
Most buyers are now paying cash. However financing is available in many locations but the rate is usually well over 10%—plus you will have the customary annual maintenance fee that could easily approach $1,000 annually in most locations.
Ownership Option Types:
1) Fixed Ownership
2) Floating Ownership
With Fixed Ownership you would be locked in for the same time period each year and it is the less common approach.
With Floating Ownership you can receive your ownership on a first come—first-serve basis which gives you more flexibility.
Your home resort (company you purchase your Timeshare from) would normally have a portfolio of properties with the Floating Option and you could technically switch to other venues within the portfolio if available.
You may also have a “trade option” which allows you to trade through an exchange company such as RCI or Interval International along with a number of other national and international companies if you wanted to further enhance your travels.
In addition, many companies add their own twist to Timeshare Ownership and new ways of packaging and selling timeshares occur often.
It is important to make it a point to be aware of what is on the market and make certain that the ownership form that you desire is the ownership form that you purchase.
If you are seriously considering purchase of a Timeshare Property—whether by deed or by right-to-use you must know what you are purchasing and you must know and understand fully how you are purchasing!
Those who have purchased Timeshares in the past know that it can be difficult to sell in many cases and the tighter regulations although helpful, may not change that reality for many.
Therefore, prior to purchase you must be ready, willing and able to handle the purchase of a Timeshare and you must consider all of the pluses and the minuses!
Be particularly cautious if you are purchasing a Resale Timeshare as they can often be overpriced and not a good bargain when compared to purchasing from a company.
New regulations do provide some protection for those who purchase from a company, but very little additional protection if you purchase from an individual.
You can now Cancel a Timeshare contract within 5 to 7 days if purchased from a company in many states.
Selling a Timeshare in the past has been difficult for many and will probably continue to be so in the future—therefore, if you decide to Purchase a Timeshare you must know all of the ramifications and have a thorough understanding of your current financial situation.
Brokers who resale Timeshares normally charge 10 to 30 percent commission and many still have difficulty selling them so recouping what you invest is a real gamble.
Be sure to avoid scammers and those who may work against your best interest as the Timeshare Market has been a major area for abuse in the past and even with the new regulations will be a prime area for scammers in the future.
You can go to www.consumer.ftc.gov to learn more about ways to protect yourself if you have a need to Buy or Sell your Timeshare.
On the plus side—Timeshares are more cost effective than buying a vacation home or condo but you must look at the purchase from the standpoint of “enjoyment” as opposed to an investment or something that will increase in value in the future—although in some instances that could be the case.
To learn more about vacation ownership and timeshares: