Sunset over timeshare development by water in Ventura California with modern homes and yachts boats
What is a timeshare, are timeshares worth it, and is one right for you?
These questions and more have probably crossed your mind if you’re thinking about a timeshare as a vacation option. It can seem overwhelming at times. You want to make the right choice and not get locked into something expensive that you don’t really want.
What you need to clear up your doubts is a handy guide to timeshare basics – and that’s what we’re here for. We’ll walk you through all the things you should know before you buy a timeshare, so you won’t make a decision you’ll later regret.
Keep reading to learn more!
What is a Timeshare?
A timeshare is a type of property that has divided use rights or ownership. Basically, a timeshare allows you to use the property for a vacation during a set period of time in the year. During the rest of the year, other people are using it for their allotted periods of time.
However, the way your timeshare works depends on the type of timeshare you get – let’s take a closer look at what those are.
1. Fixed Week
With a fixed week timeshare, you’ll own vacation rights to the same week every year. This allows for a predictable annual vacation, but can quickly get boring, since there’s no variety. You also won’t have any flexibility if something comes up during your vacation week.
However, one good thing about a fixed week timeshare is that you can trade or rent out your week if you want to. This works especially well if you have a property somewhere that’s really desirable, and your week is during a peak time of the year.
2. Floating
With a floating timeshare, you have a set period of time in the year, and you can reserve the week you choose out of that period. This gives you more flexibility as to when you use your timeshare. However, this system can also be competitive – a lot of people will be vying for the prime weeks.
3. Right-to-Use
In a right-to-use timeshare arrangement, you’re leasing the property for a set period of time each year, until your contract is up. However, the developer continues to own the property the whole time.
4. Points Club
The points club system is kind of like a floating timeshare. However, this kind of timeshare lets you vacation at a number of different locations, using points that you get when you buy into a property or buy points directly. The points are the “currency” you can use to buy timeshare time.
Again, there is some competition with this system – other people will be trying to get the most popular properties with their points, too. But this way, you do have some flexibility in terms of where you go each year.
What to Know Before You Buy a Timeshare
Is a timeshare right for you? Many people think the answer is yes, but change their mind later. Let’s take a look at what you should know before you make the investment in a timeshare.
1. Timeshares Use Serious Salespeople
The people who sell timeshares are there to make the sale, and they can make it hard for you to say no.
Timeshare presentations usually lure you in with a gift like a free restaurant trip of spa treatment for attending. Many people go into these presentations without actually intending to buy a timeshare – but they might walk away with a timeshare contract they didn’t really want.
Even people who do plan to buy a timeshare often get pressured into signing the contract before they’ve really weighed their options. Sometimes, these purchases can be canceled – contact a timeshare lawyer to find out if that’s the case for you. However, you have to move fast to get these contracts canceled.
2. You Have to Pay More Than the Mortgage
One reason many people regret timeshare purchases is that they didn’t realize how expensive the investment would be.
If you can’t pay the total cost of the timeshare up front, you’ll need a mortgage. But the mortgage isn’t the only thing you’ll have to pay. In the fine print of your contract, you’ll see that you might be paying property taxes, assessment fees, maintenance fees, and utilities. If you fail to make these payments, the developer might foreclose on your timeshare.
3. Timeshares Don’t Make Good Investments
If you’re hoping to invest in property, a timeshare isn’t a good way to do it. Not many people want to buy secondhand timeshares, so you’ll have a really hard time selling yours.
People who sell timeshares almost always end up selling for much less than they paid. They go down in value, rather than up.
4. You’ll Have to Avoid Resale Scams
It’s hard to sell timeshares once you buy them, but many people want to sell theirs. This has created the perfect environment for resale scams – if you do decide to sell, you’ll have to avoid the scammers.
These timeshare resale brokers will tell you that they have buyers lined up, and just need a fee to move forward. After you pay their large up-front fees, you’ll find out there was no buyer and your timeshare never got sold.
There are some genuine timeshare resellers who aren’t scammers. But they won’t charge big fees up front and won’t make absurd promises about the sale price you can get.
5. You Can’t Deduct Timeshare Resale Losses on Your Taxes
When you sell a timeshare, you’re almost sure to take a loss. However, the vast majority of the time, you can’t deduct those losses on your tax return, making the financial pain even worse.
Are Timeshares Worth It?
If you’re deciding whether or not to buy a timeshare, it’s a good idea to step back and seriously consider the value you’re getting. Knowing what is a timeshare isn’t enough; you also need to know all the pros and cons of having one.
Buying a timeshare is easy – selling one is hard. Read the fine print and think about whether other vacation options would suit your lifestyle better. Some people love their timeshares, but there are a lot of cons to consider, too.
Do you have a timeshare contract that you’re struggling to get out of? Then you need a timeshare attorney. Contact us – we can help.
Did you know that more than 9.1 million Americans own a timeshare?
In recent years, timeshare ownership has exploded into an $8 billion industry. Once associated with seniors playing shuffleboard, the average timeshare owner now is 39 years old with children under 18.
With so many people buying into timeshares, you might be asking yourself: Is timeshare a good deal? Are timeshares worth the money?
In this post, we’ll take an unbiased view as we examine the pros and cons of timeshare ownership.
Are timeshares worth it? Read on to find out!
How Do Timeshares Work?
First of all, let’s make sure you understand exactly what a timeshare is and how the concept works.
There are two main types of timeshare properties: deeded and undeeded.
The vast majority of timeshares in the US are deeded timeshares. You are essentially “buying” the property–but you only get to use it for a specified time period each year.
Like other forms of real estate, you can sell or rent your timeshare to someone else, or leave it in your will.
If you purchase a timeshare outside the US, it will most likely be an undeeded timeshare. You’re not actually “buying” the property–it’s more like signing a rental agreement.
In return, you get a license or membership to use the property for a specific amount of time every year.
From here, it gets a little more complicated. You may have the option of purchasing a fixed week (the same week every year) or a floating week (which can be used any time).
Many non-deeded timeshare companies (or “vacation clubs”) operate on a points-based system. You, the owner, buy a specific amount of points that you can redeem at many different destinations.
Now that you know how a timeshare works, let’s examine some pros and cons of buying one.
Pros of Owning a Timeshare
So far, this is probably sounding pretty good, right? A beautiful condo on the beach, the peace of mind knowing where you’ll take your family vacation each year…
Yes, for certain people, there are some pros to buying a timeshare.
Do you enjoy visiting the same place year after year? Do you have your favorite beach and favorite restaurants in your favorite town? If you buy a timeshare, you can visit your favorite place every year.
What if you know you’ll be taking your annual vacation the same week every year? A timeshare could save you the headache of booking hotels (or the heartache of discovering they’re all sold out).
If you have kids or enjoy traveling with friends, a timeshare is also great because it’s typically a lot larger than a hotel room. Most timeshare properties offer two or more bedrooms, a full kitchen, and laundry facilities.
For large groups or families, the comfort and convenience may be well worth the price tag.
Cons of Owning a Timeshare
Because we promised an unbiased perspective, let’s now consider some negative aspects of timeshare ownership.
Do you enjoy traveling to different places each year? Do you hate the idea of being locked into a pre-set week for your annual vacation?
If you answered yes to either question, a timeshare probably isn’t the best idea.
The same goes for singles or couples traveling without kids. If it’s just you (or you and your significant other), do you really need a three-bedroom condo with three full bathrooms? You may find all that extra space just goes to waste–but you’re still paying for it.
Dollars and Cents
Speaking of payments, a timeshare will usually end up costing you a lot more than you bargained for. No matter how friendly your salesperson at the pitch, chances are that there are plenty of hidden fees they’re not telling you about.
For starters, you have to pay property taxes. And no, you can’t write them off.
Then there are the property’s annual maintenance fees. These could run anywhere from several hundred to several thousand dollars per year, depending on the property.
What if the property needs a new roof or suffers damage from a hurricane or water intrusion? Yes, you’re expected to cover your share of those costs too.
That’s what happened in 2012 to the timeshare owners of The Point Resort in Kauai. They were billed a staggering $5,893–each–to cover the costs of water damage.
Other Important Considerations
Unlike other forms of real estate, a timeshare depreciates in value as soon as you buy it. Although you’ll be promised in the sales pitch that you can easily sell it–and make your money back–this is rarely the case.
If you do decide to sell your timeshare down the road, it’s no easy task. In fact, you’ll probably need the help of a timeshare attorney to free yourself from the agreement.
If you’re considering a points-based system, keep in mind that booking or trading properties may not be as easy as it sounds. If you don’t want to travel to a particular place during a certain time of year, chances are the other timeshare owners feel the same way.
Another factor to consider is your current (and future) lifestyle. That timeshare on the ski slopes in Aspen may look great now, but what happens down the road when you have a baby care for? What if you suffer an injury that leaves you unable to ski?
That timeshare will still be there–and you’ll still be paying for it.
Are Timeshares Worth It?
So, what’s the takeaway? Are timeshares worth it?
The answer depends on your reason for buying. Like all major purchases, there are pros and cons of buying a timeshare.
As a financial investment, it’s likely to cost you more than you’ll ever make back–even if you do manage to sell it.
But if you want the peace of mind of returning to the same vacation spot year after year, a timeshare could be your best bet.
Do you have further questions about timeshares? Click here to schedule a free 30-minute consultation with My Timeshare Attorney.
Alternately, you can use our online contact form to get in touch anytime, anywhere.
With 54% of American workers failing to use their time off, Americans are just plain bad at taking a break. This figure includes plenty of people who’ve made the effort and spent the money on a timeshare investment.
Whether it’s work that catches up to you, a need to schedule vacations a year in advance, or not enough money, fewer workers than ever are taking vacations. Taking a break is important to your mind and your body. An increasing number of people will go on vacation and remain connected to their jobs via mobile devices the whole time.
Whether you’ve already invested or are thinking about making a timeshare investment, you need to make a plan to get the most out of it. Otherwise, you could be wasting money and your precious vacation time. Follow these tips to make sure you’re getting a bang for your buck.
1. Invest In Memories, Not For Returns
A timeshare is a great investment for a family that doesn’t want or can’t afford to purchase a vacation home. It’s a great way to have memories, host friends, and invite family for a getaway. If you’re thinking of your timeshare as a way to get a return on your investments, you might be disappointed.
The timeshare market isn’t a market that will appreciate in value. Timeshares are a great way to have a “home away from home” and to relax. They provide plenty of value to your life, just very little of it is measurable financial income.
If you buy into a great network, you’ll be able to be part of a timeshare exchange that allows you to go to different places, all for the same price.
2. Balance Your Budget
Timeshare maintenance fees can be a turnoff to some timeshare owners. In just the last 10 years, the average fee has doubled to around $1,000. On top of that, if you take advantage of a timeshare exchange, you might pay an additional fee.
If you’re paying $20,000 for your vacation time every year, you might not see any returns for a decade or more. Unless you really love your timeshare, this could be a little more than a drag.
If you buy from a developer, you’ll pay more than it could cost you to rent a hotel for the week. Buying secondhand from another owner could be more cost effective than buying a brand new contract.
An entire secondhand timeshare market exists online where you can buy a timeshare for next to nothing from someone who is trying to get rid of one. If someone feels buried under the costs of their timeshare investment, they’ll be glad to sign the responsibility over to you for free.
Hire a real estate agent to ensure that you ask all of the right questions before you write a check. You will likely have a certain kind of property in mind, so be clear with your agent so that they can point you in the right direction.
3. Love Your House And What Surrounds It
If you want to get the most out of your timeshare investment, you need to love the destination itself. Even a beautifully designed luxury building can be useless if you don’t have anything to do during the day. You need to ensure that your timeshare is located in an area that you like to spend time in.
Before you invest, make sure you spend a few days in the area where you plan to get your timeshare. Find a few places you enjoy eating, relaxing, and shopping. When you leave, you should feel like there’s more to see if you’re planning on spending a week or two there every year.
You should fall in love with the property as well. If you’re in a large complex, take a walk around the courtyard and meet some of the people living there. Make a few connections so that when you arrive for your vacation, you’ll have some people to show you around.
4. Rent Out Your Timeshare
While owning a timeshare can be appealing, you could be paying a lot of money for space you don’t get to use that often. If you’ve booked out a week and realize you won’t be able to make it, consider renting it out.
With the rise of Airbnb and other short-term rental websites, you should be able to easily recoup your costs. Have some friends or neighbors nearby who can help you out in case of any emergencies.
Check with local regulations and your own contract to ensure you’re not violating anything that you’ve signed. You might be able to make some extra money on the side if you decide you’ll be vacationing somewhere else this year. You could also make this process easier on yourself by announcing your rental to friends, neighbors, family, and colleagues.
Renting out to someone who you already know comes with fewer headaches than renting it out to a stranger.
5. Buy Outright If Possible
If you want to make money with your vacation space and can’t find the perfect timeshare investment, perhaps you should consider buying a property.
While this is more like opening up your own timeshare company, renting it out short-term will be based more on your own rules. If you make enough money, you might be able to hire someone locally to take care of the space while you’re away.
Many foreign countries now report that much of the new investment in real estate comes from people who are buying vacation properties.
A Timeshare Investment Is An Investment In Yourself
You work hard all year round so that you can enjoy your time off. Finding the perfect timeshare situation goes hand in hand with getting the most out of it. If you can find a place that feels like a second home, you might start finding ways to work remotely and extend your stay.
If you’re looking for other ways to get the most from a timeshare, contact us for more tips.
There are over 1500 unique timeshare resort properties in the US alone. That makes it a nearly $9 billion industry.
For comparison, the music industry is only worth $7 billion.
The average person will pay around $20 thousand to buy in. But this initial investment is only a drop in the bucket. Very soon after that initial purchase, people learn the hidden timeshare costs that no one told them.
I’m here to share them with you. Whether you’re thinking of buying or having second thoughts, you need to know this.
Let’s explore the timeshare costs they don’t want you to know about.
1. Your Life
Does that sound overly dramatic? You’ll quickly see why. Buying a timeshare is often a lifetime commitment.
Once you’re in, it’s almost impossible to sell it to someone else. You’re competing with all of the new, unsold properties at the same resort and others.
Lose your job? Go through a divorce? Terrible diagnosis? It doesn’t matter. You’re responsible for whatever you agreed to in your contract.
Failure to meet these obligations could result in legal actions taken against you.
Now onto less dramatic, but still impactful hidden timeshare costs.
2. Your Freedom
Want to go to Disneyland this year? How about Venice? Did you always want to visit Dubai?
As they say: Variety is the spice of life.
But not for you. You have a timeshare. You already know where you’ll be going every year for the foreseeable future.
Even if you do have several resorts to choose from, your choices are very limited. The top destinations may require booking years in advance.
And they may not tell you up front that you’ll pay yet another fee to exchange units.
One of the hidden timeshare costs is playing vacation deja vu for the rest of your life.
The resorts know that people hate monotony. They’ll try to sell you upgrades every chance they get.
3. The Not So Hidden Hidden Costs
When you own a timeshare, you’ll probably be told up front that you’re responsible for annual ownership and maintenance fees.
It seems all transparent. You’ve got this. You know exactly what you’re in for.
But do you?
These fees are due whether you use the property or not. If the property goes into decline, they may go up. Depending on your contract, they could go up a lot.
And, they usually don’t cover the big stuff. Does the resort need a new parking lot, roof or lobby? They’ll send you the bill.
4. A Hefty Tax Bill
When you buy your timeshare, you’re savvy enough to ask probing questions.
Is this all I’m responsible for? Are there any hidden timeshare costs I should know about?
They may look you straight in the eye and say that’s it.
Then you get your tax bill. As a property owner, you’ re responsible for the annual property taxes. You can’t write these off.
A timeshare broker doesn’t have much to do with these hidden costs. It might simply slip their mind.
But you could owe a thousand or more in property tax each year in addition to the costs you knew about.
This timeshare is looking like less and less of a bargain all the time.
5. Real Estate Fees
When you buy a timeshare, you’ll pay the same kinds of real estate fees you pay when you buy a house. There’s an assessment fee, an appraisal fee, a transfer fee and so on.
The resort may even find some clever finder’s fees or other fees to tack on there. These fees should be in your final documents. But they are often hidden until you are already excited and well into the buying process.
These hidden timeshare costs can really bite into the value of your timeshare. But there’s more.
6. More Real Estate Fees
Let’s say that you find a buyer for your share down the road. You may be thinking that you’ll get at least most of your money back.
But when you add up real estate agent fees and concessions you have to make to sell the timeshare, you really end up paying these fees or more twice.
And if you do sell it, this doesn’t get you out of any back fees you may have acquired during ownership.
7. Travel Fees
Okay. You already knew that the resort wasn’t going to pay for your plane tickets to the resort every year. But these are hidden timeshare costs that almost always slip the buyer’s mind.
In order to enjoy your timeshare, you’ll need to pay for you and your family to travel there.
If fuel costs go up and you can’t afford to travel, you’re stuck with a terrible choice.
Either don’t use the timeshare that you’re paying thousands for each year. Or go into debt to travel there.
When you consider other options like waiting until fuel prices go down or taking a close to home vacation that year, you’re wasting a ton of money.
8. Depreciation
You buy into this great resort. You see all kinds of entertainment venues and restaurants going up around it. What a great investment?
Think again.
Timeshares rarely, if ever, go up in value. In fact, plan to take a mighty loss on it when you sell it.
We’re not even taking all of your annual fees into account. That’s a loss out of the gate.
If you paid 20 thousand for it, expect 10 or less. Yes, really? When you add up all of the hidden timeshare costs you no longer have to pay, you’ll actually be relieved to dump it.
But There’s Good News About Hidden Timeshare Costs
It’s possible to get this burden off your back. You may be ready to dump the timeshare and you don’t care what you lose. But wait!
You may have options.
I can help you better understand what those are. The timeshare may have been misrepresented. Perhaps, they told you it was an investment or that your annual fees were fixed.
Don’t suffer under a timeshare anymore. Learn about your options. Set up a free consultation today.
Do you have a timeshare contract you no longer want to be party to?
Timeshares seem like a great deal, until they’re not. The upfront fees can be as much as $19,000, plus annual maintenance fees. Not a small amount by any means.
Many people sign up for a timeshare while on vacation, then realize it’s a costly mistake. They are generally a bad choice in the long run. And if you hold on to a timeshare you don’t want, it will cause unnecessary expense and become a headache.
If you find yourself owning a timeshare after coming home from a vacation there may still be a way to get out of your timeshare. Keep reading, because you’re about to find out how you may be able to have your timeshare contract canceled.
Give Your Timeshare Back to the Resort
First things first, this is going to be a painful process getting out of your timeshare and you are going to lose money, in fact, it may even cost you more money to rid of your timeshare.
Contact the resort and see if they will take back. However, understand this is rare and they are not obligated to take back the timeshare because you changed your mind. However, trying to sell your timeshare is almost always a bad idea. Why? There is no resale value, you can find them everyday on Ebay(R) for $1.00, yes that’s one dollar. People sell them just to get out of the lifetime of annual maintenance fees.
In order for them to consider your offer, you need be in good standing and the unit should be paid off. You may be able to do a “deed back”, which means signing the deed or interest over to the resort. It’s most likely you won’t get any money for it and you may have to pay a fee to transfer.
Approach the condo association and find out if the resort is open to your offer. Whatever you do, don’t stop paying maintenance fees as it will damage your credit and lead to foreclosure. Then you won’t have a property, and you’ll still be liable for the fees.
Check the Law on Rescission in Your State
There is a legal way to cancel a timeshare contract that can work if you act in time. When you sign the document, it is a legal and valid contract. This means it’s covered by normal contract law.
“Rescinding” basically means the act of you canceling your obligations under the contract. The time period you have to rescind will be stated in the contract, and you can check your state’s laws as well.
Usually, this period is between three to fifteen days. If you were pressured into signing up for a timeshare a few days ago and regret it, the time to act is now.
Cancel a Timeshare Contract in Writing
In order to go ahead with the cancellation, you must do it in a certain way. The standard method to cancel a timeshare contract is to send your decision in writing.
For detailed instructions, you must look at your contract’s cancellation policy. It will usually specify that the cancellation letter includes certain things. Some of these might include the purchase date, your personal information, and a timeshare description.
It’s vital that your letter includes a clear intention to cancel. You don’t need to state a reason for your cancellation. But it’s good form to include a request for a confirmation that your letter was received.
It’s not a good idea to call, as the salesperson will usually try to persuade you not to cancel. If you do call the company, be sure to speak to a manager. Definitely don’t speak to the same salespeople who sold you the timeshare in the first place!
Delivering the Cancellation
The method of delivery is extremely important for the timeshare cancellation to be effective. It will be specified in your timeshare contract and can range from hand delivery to certified mail.
If you don’t follow the instructions exactly, it’s possible your rescission could be rejected. Be sure to make copies of the letter before you send it. Also, make copies of your agreement and any other relevant documents if you send the originals. Be sure to mail it certified return receipt.
Refinance the Timeshare Loan
Sometimes the timeshare itself isn’t the problem, the loan you took out for it is. You can keep your timeshare by refinancing your loan so that you don’t have to cancel a timeshare contract.
It’s not mandatory to stick with the rate the timeshare developer gave you. While you will need a good credit record, this option can shave a lot off your repayments.
Shop around for the best options. Once you have moved your loan to another lender, this opens up possibilities. You can then look into getting rid of your timeshare because you don’t have a high mortgage to pay.
What to Do If the Cancellation Period Has Passed
What should you do if you can’t cancel a timeshare contract?
In this case, selling the timeshare is the easiest option. Sadly, a timeshare isn’t like a normal property. It doesn’t increase in value year by year.
Even if you sell it at a loss, however, you will have gotten out of a costly contract. Your best bet is can contact a licensed firm that specializes in timeshare matters. You can also look for a buyer yourself by posting an ad on the internet, however SELLER BEWARE! This is laden with scams and most people lose money pursuing this path, again the sad fact is there is no resale value for the majority of all timeshares.
Another choice you can make is to donate the timeshare to a charity.
A local charity can sell the use your week at an auction to raise money. If you get a bigger organization, they can even take over the payments. The great thing about donating is that you can get a tax deduction to offset the money you’ve spent on the timeshare. This is far more difficult to do than it appears.
Get a Lawyer to Cancel a Timeshare Contract
While there are some steps you can take to cancel a timeshare contract yourself, in most instances, you will need professional help. Or your time to cancel may have passed and you need to find other options. In a case like that, you should get in touch with a trusted timeshare attorney.
A lawyer may also be able to find a way to get you out of your contract even if the rescission period has passed.
Go ahead and contact us today, our consultation is free. The sooner you call, the sooner you can get out from under your costly timeshare.
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