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Timeshares are a large part of the vacation travel industry.
Travellers who cannot afford to own a home abroad, or who don't
want the worries associated with exclusive ownership, often see
timeshare as an affordable alternative. However, unscrupulous
salespeople, poorly maintained properties and unexpected hidden
costs have brought a lot of bad publicity to the industry. A
well-informed consumer can avoid the common pitfalls.
It is always risky to buy property sight unseen, but many people
do this when they purchase timeshares. If you purchase in an
area where you wish to vacation, you may be unpleasantly
surprised when you arrive at your destination. However, many
timeshares are purchased with the intent of trading them for
others in different locations, and in this case the location of
the property is a bargaining chip, not the actual physical
property. Timeshares in prime locations such as Hawaii are
easier to trade than others.
Recently, big corporations such as Disney, Hilton, Marriott and
Hyatt have entered the timeshare market, and their properties
are of a uniform standard around the world. First, you should
know that if you buy a new unit directly from a timeshare
company, it may cost up to 60% more than if you purchased from
the resale market. Buying from a time-share company is more
expensive primarily because of the company's marketing costs,
which include free trips, meals and vacation activities for
prospective buyers. Most customers of these timeshare companies
buy on impulse, without any intent to purchase when they first
walked into the timeshare seminar. Hard-sell tactics and
"Buy-it-NOW-one-time-only-offers!!!" are the rule, and to avoid
being pressured into a bad deal, the best tactic is to avoid
these sales presentations altogether.
Try the resale market for better deals. Time-share resales are
listed on many websites, on eBay and with independent time-share
brokers. The search term "timeshare resale" produced
approximately 500,000 results on Google, so there are plenty of
services to choose from. If you buy directly from an individual,
a resale broker or a lawyer can handle the closing for a charge
of $300 to $500.
If you are buying a timeshare for the resale value, consider
regular real estate instead. Timeshares do not increase in value
in tandem with conventional real estate. From a strictly
financial point of view, time shares are poor investments. Most
real estate increases in value, but this is not always the case
with time-shares, especially those bought directly from
timeshare companies. If you get a good deal on a resale
timeshare in a prime location, it may increase somewhat in
value. But usually time-shares are like cars -- they are
commodities to be used, and are resold for less than the
original purchase price. Don't think of timeshares as real
estate; you are buying a vacation plan.
Also, unless you buy in a prime location, swapping them may not
be easy. Timeshares are frequently sold on the claim that the
buyer can trade a week in one place for a week at another
location. This is only true if the location is in demand by
other vacationers. Otherwise, expect to vacation in the original
location each year.
To find out whether or not you will be happy with a timeshare,
it may be a good idea to rent one for your next vacation. Many
timeshare units are placed on the rental market by owners who
couldn't get away to vacation at their alloted time, and these
units often rent at bargain prices. Check the same websites that
offer timeshare resales for available rentals.
There is a new "points" system being offered by some timeshare
properties. Instead of getting a week each year, buyers purchase
a set number of "points." These can be redeemed for a week's
stay during the peak season, for longer periods during the
off-season, or even spread over the year in two- or three- day
segments. Some large hotel companies such as the Marriott also
offer a points systems whereby a stay at their hotel earn points
in the company's time-share system. Points systems can be
confusing, so be sure you have a clear understanding of the
services you are buying. For instance, find out how much advance
time is required to reserve a week at the resort during peak
season, whether the points have an expiration date, and if it is
possible to transfer the points to other facilities in the same
resort chain. However, when it comes to vacation planning, the
points system offers more flexibility because the buyer is not
locked into the same week every year.
Most important, don't forget the annual maintance fee.
Time-share owners are responsible for paying a portion of the
property's upkeep. These annual fees, including maintenance and
real estate taxes, typically range from $300 to $700 per week of
ownership.
In summary, timeshares can be a good buy if they offer some
flexibility in terms of transferring to other locations and
timing your vacation. The typical timeshare is a small condo
with kitchen facilities and one or two bedrooms, ideal for a
family vacation, and since such units rent for $150-200 per
night, a timeshare purchase may be cheaper way to travel.
However, if you are a mobile traveller who likes to stay in a
different town every night, a single person who doesn't need the
extra space, or if you travel at unpredicatable times, then a
time share may not be suitable.
About the author:
Frank Vanderlugt likes
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