The idea of jetting off to a picturesque location for a week sounds fantastic, but the idea is even more appealing when you know that you’ll be staying in your beautifully furnished, clean and comfortable timeshare that you’ve going to for the past few years.
This is what you usually would think of when you agree to a fractional ownership of a property, also known as timeshares.
Yet although the idea of a timeshare may initially be very appealing whilst your soaking up the sun and overlooking the magnificent scenery surrounding you, it’s important that you don’t get succumbed to the sales pitch that timeshares are a deal not to be missed before you’ve researched it properly to see what is involved.
If you are perhaps considering investing in a timeshare, it’s important that you’ve considered what the process involves andwhether it’s worth the time and money.
Let’s now take a closer look at what you might to consider in terms of whether a timeshare really is an investment worth making this year.
The benefits
For families or people wanting to a stick to a regular vacation pattern and would prefer home-like accommodation as opposed to other forms of accommodation that you haven’t stayed in and could therefore be more unreliable, timeshares do present a rather attractive prospect.
Furthermore the regularity of visiting the same destination at a guaranteed price presents an advantage for people in that they know what to expect and what they’re getting for their money.
However when considering timeshares as long term investments, this is when the lines become a little more blurred.
Decrease in value
One of the biggest criticisms of timeshares is that they generally don’t grow in value.
Whereas investments should appreciate in value or generate an income, in many cases timeshares do not achieve this.
According to Debt.org’sarticle discussing whether or not timeshares are a good investment, the author, Al Krulick says that timeshares often sell for less than 50 percent of its original price
Difficult to offload
Another argument in support of the view that timeshares may not be a sound investment is they can be very difficult to sell.
A U.S News article looking at whether timeshares are worth investing in reports of Jill Etesse, the owner of a mobile app development firm outside of Washington D.C. who inherited her parents timeshare in the 1980’s had trouble trying to exchange the property online and didn’t think that she would be given much even if she did manage to to sell it.
Yet even if you do manage to sell your timeshare, the chances of you receiving the initial investment that you made is very low.
The main problems you are faced with when it comes to selling your timeshare is that with an increasing number of timeshares being built, this is flooding the market full of more options that are more contemporary in design and perhaps more attractive to buyers.
The second problem is that timeshare owners are selling their shares to escape debt problems or after they have realized that the deal they signed up isn’t quite what it seems.
Additional charges
Timeshares also may not be regarded as good investments due to the additional fees and charges that you could faced with.
On top of the monthly payment and interest rate that you are paying, the annual maintenance fee is something that you’ll also have to contribute paying towards.
Furthermore if the property needs any other work doing to it, for example a new roof, a “one-time” assessment will be levied, according to Lisa Smith’s weighing up of timeshares on Investopedia.
Inflexible
Although timeshares perhaps have the added benefit that you have a set destination for you to return to and you know what to expect, another one of the issues with timeshares is that they do not come with all of the flexibilities and advantages of owning your own property outright.
As you are sharing the property with other people, you do not have the freedom to do what you’d like with it.
Also in terms of investment opportunities, you are not able to rent out your unit whilst you are not there, which you could if you had full ownership of a vacation property.
Lastly in terms of inflexibility, timeshares have strict limits on when you can actually occupy the unit, therefore limiting opportunities to go away when you’d like to.
It would seem that in terms of looking at timeshares as an investment, there are a number of points to suggest that timeshares aren’t necessarily a sound investment.However this is quite a generalisation and doesn’t necessarily mean that it applies to every timeshare.
Buying a timeshare is clearly a major purchase which requires much consideration before signing any documents, therefore it’s important that you weigh up exactly what you expect to get out of your timeshare before committing to a purchase.
If you are requiring advice on purchasing a timeshare or require assistance about a timeshare you have purchased, head to Timeshare Consumer Association who can help with a range of matters including acquisitions, purchases, sales, exits and legal matters.