Timeshares have become one of the most popular forms of vacation ownership in the world. Despite their many benefits, they can also have some disadvantages.
First, they are often sold at a premium, which can add up over the years to a substantial amount of money. Besides the upfront cost, timeshares can also come with hefty annual maintenance fees and exchange fees.
This can make timeshares a financial burden on a family’s budget. Especially if the purchase was made with a credit card or retirement plan.
Another drawback is that timeshares depreciate in value very quickly, so they are not a good investment. They also can become a liability in the event of a mortgage or foreclosure, as they are not worth much more than the outstanding balance and unpaid fees.
There are a number of different types of timeshares, including fixed weeks and points. Some are affiliated with a timeshare exchange company, and others are owned independently.
The most common form of timeshare is a fixed week. A fixed week is a specific time during the year when the owner has access to a resort. Some timeshares allow owners to use their fixed week as often as they like, while others require a set period each year.
While fixed week ownership is typically the most expensive type of timeshare, it may offer a lot of benefits. For instance, owners can exchange their fixed week with a resort through an independent or a major timeshare exchange agency, such as RCI and Interval International [II].
Some timeshare companies also offer membership in a “vacation club” where owners can purchase points to use at various destinations. These points are usually used towards booking the owner’s next vacation, but can also be redeemed for excursions and experiences at some resorts.
It’s possible to buy a fixed week on the secondary market for less than the developer sells it for, which can be an appealing option. Depending on the size of the timeshare, the number of points and the popularity of the destination, these prices can be significantly cheaper than buying directly from the resort.
The downside is that timeshares can be difficult to resell, and they are often priced below fair market value. This makes it a bad idea to buy one with the intent of selling it in the future.
In general, timeshares are not the best way to own a vacation property. They can be costly, a hassle to manage, and can depreciate in value very quickly.
If you do decide to purchase a timeshare, it’s important to understand the industry’s many terms and regulations before making a decision. For example, if you are planning on using your timeshare for business purposes, it’s crucial to consider the resort’s rules and restrictions.
You should always ask to see a copy of the legal documents that govern your timeshare before signing a purchase agreement, so you can ensure that your rights as an owner are not violated. Moreover, you should consider whether the resort’s management company will be responsible for maintaining the property.