9 Tips On Buying A Timeshare
The lodging aspect of vacationing can be quite an expensive prospect, as hotel rooms in favorite vacation spots easily run hundreds of dollars per night. For this reason, some people prefer to purchase timeshares for their vacation lodging as doing so can often give vacationers comfortable and spacious lodging at some of the best locations for relatively low prices. However, while there are many benefits to buying a timeshare, there are various things that you should take into consideration before proceeding. Read on for our nine tips on buying a timeshare.
Consider Your Investment
Because they know that they are buying a portion of real estate – or the rights to use that real estate – some people see timeshares as investments that can increase with time. This is usually not the case, however. Instead, the opposite tends to be true. Just like a new car, a timeshare is usually an asset that depreciates in value rather quickly. While it is possible to sell a timeshare – as people often do – you should not expect to make any sort of a profit from it. Also remember that having the right to use a particular piece of property one or two weeks out of the year for 20 years or so does not mean that you actually own a portion of the property in the way that a shareholder owns a portion of a corporation. Depending on the type of timeshare you purchase, the ownership of the actual building and land probably remains in the hands of someone else.
Consider Your Lifestyle
Despite the fact that a timeshare is not a viable investment in strict financial terms, it can be an affordable and rewarding investment in terms of your future vacation plans. In making the decision to buy, though, make sure that your personality, interests and schedule will allow you to take full advantage of the timeshare. For instance, if you end up becoming bored with the location associated with the timeshare after two or three years, it may not be a good investment. Also, if your professional schedule has a high likelihood of keeping you from using the timeshare in the future, it may not be worthwhile.
Do Not Finance
Timeshares typically come in the five-digit range – often around $20,000 or $30,000. For most people, this is not a small sum. For this reason, companies that specialize in timeshare sales often offer financing for them as well. However, this financing tends to come with a relatively high interest rate, adding significantly to that not-so-small sum. Considering the fact that timeshares are usually depreciating assets, the best thing to do is probably pay the full sum immediately or not buy at all. You may consider alternative financing options, but third-party lenders are often hesitant to finance a depreciating and non-essential asset like a timeshare.
Do Not Attend Timeshare Presentations
Many companies put on presentations to sell timeshare opportunities in bulk. These presentations may or may not provide free alcohol and the deals that they offer are usually not the best on the market. To find the best timeshare for you, use personal contacts or do your own research on the Internet.
Verify Fee Structures
On top of the purchase price, many timeshares come with an annual maintenance fee. Currently, such fees tend to run in the three-digit range. Before signing anything, find out what this fee will be and make sure that there is some sort of limitation to how much it will increase. While it is normal for such fees to increase as a result of inflation, in some cases, timeshare buyers do get gouged by exorbitant maintenance fee increases.
Consider Title Insurance
When you purchase a timeshare, you may or may not be vulnerable to hidden financial burdens such as overdue maintenance fees, unpaid taxes and unpaid liens. While it is possible to investigate such issues before signing, doing so is more difficult in some cases than others. To protect yourself, you can purchase title insurance, which will pay for any such unforeseen liens, taxes and other debts. (For more information on title insurance, see Home Title Insurance: What Is It And Do You Need It?)
Consider Buying Secondhand
Even if you know that you will not get tired of your timeshare in two or three years, the same may not be true for everyone else. Just as the best deals in the auto industry tend to come in the form of not-so-used vehicles, timeshares that have gone a couple of years tend to be the best deals in the industry. While these deals are harder to find, they can deliver significant savings.
Use An Escrow Account
Timeshare sales have long been a favorite scamming method for con artists across the world. To protect yourself, do not put any money toward a timeshare in a foreign country or on not-yet-developed property unless you do so through an escrow account. When you use an escrow account, the money will not be released to the seller until the legitimacy of the transaction has been verified.
Keep Your Head
Above all else, when you are looking at the timeshare market, it is important for you to keep your head. Do not spend more than you can afford and do not place an inordinate amount of trust in the hands of someone who has not yet earned it. Doing so can ensure that your hard-earned money will, in fact, go toward paying for those future vacations that you have envisioned for yourself.
If you are on the market for a timeshare purchase, keep these nine tips in mind. They just might help you to get a great deal on your new vacation spot.