Timeshares are an alternative way for many people to enjoy vacation property. They can help people who have limited incomes to afford a vacation home, and they can also be a great gift for someone special. However, if you’re thinking of purchasing a timeshare, it’s important to understand the facts about them before making the decision.
Costs
One of the most important facts about timeshares is that they are expensive. The average price for a timeshare is around $16,000, according to the American Resort Development Association. In addition, timeshare owners will also have to pay maintenance fees and other costs each year that they use their properties.
If you’re interested in buying a timeshare, make sure you have the money to purchase it before making the commitment. You can either pay for the purchase up front or finance it over time. Often, timeshare developers will offer loans with interest rates of 12 to 20 percent. This is much higher than a bank loan, which is generally under 4 percent.
Real Estate
Another important fact about timeshares is that they do not appreciate in value like wholly-owned property, which means that you will lose money on them over time. You’ll also have to pay an annual maintenance fee, which can add up to thousands of dollars a year.
Buying a timeshare abroad
If you plan to buy a timeshare overseas, you should know that the laws can vary widely from country to country. Some countries have stricter regulations than others, and some have no consumer protection laws at all. In Mexico, for example, foreigners are not allowed to own the title to a timeshare, and they cannot even sell a right-to-use timeshare.
Laws against timeshare fraud
Finally, a timeshare is considered a form of real estate, which means that if you have a mortgage on it, it can be subject to foreclosure if you don’t pay it off. In the United States, the federal government has a foreclosure prevention program that can help people avoid this situation.
The ARDA reports that the total value of timeshares was $100.2 billion in 2018. This amount includes sales revenue for over 1,570 U.S. resorts and 7 million nights rented.
How They Work
There are two types of timeshares: fixed weeks and rotating weeks. The former are the original models of timeshares, and they give each owner a certain week each year at a particular property. These are usually found at independent properties that were built in the 1960s or 1970s and then sold to homeowners associations with no further promotion by the original promoters.
Rotating weeks, on the other hand, are based on a point system, and each owner has a specific number of points they can use to reserve a specific week at a certain property. Typically, these points are for high-season stays, but they can also be used to rent a unit off-season.
Getting out of a Timeshare Conclusion: Unfortunately, timeshares are not easy to get rid of, and many people end up stuck with them after buying them. These contracts are legally binding and usually last for life. If you’re considering selling your timeshare, you should consult a seasoned resale agent.
