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Five Financial Myths About Purchasing a Timeshare Property

Scared looking woman hiding picking through dollar banknotes

Why are most timeshare properties sold, while consumers are on vacation?  Because the psychology of purchasing a timeshare property for most individuals, is about extending the memories or capitalizing on the fun they are already having on a vacation.

Timeshare sales agencies and professionals know that a vacationing consumer can be an easy sell; and they sell you the opportunity to repeat a fun, relaxing vacation over and over again, by positioning the timeshare property as a limitless vacation opportunity, and one that is more affordable in the long run, than owning a vacation home, or staying at traditional hotels and resorts.  Many families who purchase a timeshare never realize these promised savings.

1. A Timeshare is an Investment Property

Unlike purchasing a vacation home outright, and acquiring complete ownership of an asset with the potential to appreciate, a timeshare property statistically depreciates over time.  The initial investment of twenty to thirty-thousand dollars is virtually never recovered, even in the sale of a timeshare property.  As the vacation home or condominium depreciates with age, fees for maintenance, repair and incidentals can actually increase over time, costing owners several thousands of dollars annually in unexpected expenses.

2. You Will Enjoy Returning to Your Timeshare Regularly

Even the most desirable vacation spot can get boring, after four or five visits.  When it comes time for vacation, do you really want to consistently return to the same property and location over and over again?  Timeshare swaps and exchanges allow owners to trade weeks at different locales, which is another appeal for buyers, but the fees involved in membership and conditional fees for arranging a swap with another timeshare owner can quickly make it seem more expensive than simply utilizing your vacation time at your own property.  Unless you wish to pay more, your options are typically limited, and swapping properties can be more of a hassle and inconvenience, while you attempt to find a property and member willing to trade with you.

3. Timeshares Owners Take Care of the Property

Depending on who you are sharing your timeshare with, you can find your property and furnishings quickly rundown after a short period of time.  You anticipate that every other owner will be as diligent and respectful to the property out of consideration for other investors and owners.  However, frequently timeshare buyers can be paired with other owners who don’t share the same diligence or respect for the property; your new timeshare can go downhill quickly, with one or more irresponsible co-owners.

4. Timeshares Make Great Gifts

This sales approach is often pitched at parents and grandparents.  A RTU (right to use) timeshare contract can be based on a five-year renewal (after the initial purchase), but many RTU contracts extend for 99 years.  Timeshare sales teams argue that you are purchasing a vacation opportunity not only for yourself, but one that your children and grandchildren can enjoy.   A fraction of that is true, and from a financial perspective, rather than creating a family vacation home, you are creating a legacy of expense and fees that can outlive you, and become a responsibility or obligation to your family.

5. It is Easy to Sell a Timeshare

When the economy is doing well, timeshare sales thrive.  Unfortunately, when the domestic and global economy struggles, the market becomes overloaded with consumers who are desperate to get rid of their timeshare property, and the obligatory expense of it.  They are not easy to sell (with very few exceptions) and in fact, many people who are desperate to get away from escalating fees, either donate them to a charity, or give them away for free or at a rebated rate.  It is not uncommon to see a family attempt to sell a timeshare for $5,000 when they paid over $20,000 for the vacation time.

 

The timeshare industry as a whole is evolving and subject to changes in travel cultural preference.  Fifteen years ago, there was no such thing as AirBNB available to vacationers, but now, you can literally find properties easily online, in any part of the world, for an affordable daily rate.  Why would you own a timeshare and be strapped to annual expenses, when you could pick an exciting new vacation locale twice a year?

The value proposition doesn’t make sense anymore for the average American, which is why the timeshare market is consistently flooded with people trying to recoup some of their investment, and relieve themselves from the financial obligation of owning one.

If you are ready to take action and legally end your timeshare contract, contact us for a free consultation.  Our team can help end the financial burden of owning a timeshare, without negatively impacting your credit.  You can be free of the escalating annual expenses of your timeshare contract.