Whether
you are looking to buy or sell your
timeshare, you need to make sure you
have all the information on timeshares
to come to an informed decision.
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 a 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.