Timeshares are a form of vacation ownership that has become an extremely popular way to travel. They can be a great way to save money on your vacations and eliminate the hassle of hotel reservations. But before you make a purchase, there are some important facts to keep in mind.
1. The cost:
When you buy a timeshare, you’re paying for a certain amount of vacation weeks each year at a particular resort. That price is based on a number of factors, including location, amenities, unit size and the season you choose to use it. The upfront cost typically runs into the thousands, and maintenance fees can add to that sum.
2. The depreciation:
If you plan on using your timeshare more than once a year, the depreciation costs could make it a bad idea to invest in a timeshare. Over the years, the value of your timeshare may decrease compared to the original purchase price, says Jim Rogers, a Florida timeshare broker.
3. Property taxes:
If your timeshare is a fractional deeded property, you’ll owe a proportionate share of the property taxes on the unit. This can be a major expense, especially if the property is in a gated community or is located outside of your home state.
4. The resale market:
If you decide to sell your timeshare, you may end up with a significant loss of the original purchase price. That’s because there are more timeshare owners looking to sell than there are buyers.
5. The resale market is not a good investment:
You may end up selling your timeshare for less than you paid for it in the first place, which is bad news for anyone who thinks timeshares are a sound investment. The primary reason for that is that the price of timeshares has increased significantly over time, which means more people are selling theirs than buying them, according to a study from TUG, an industry group.
6. The resale market doesn’t appreciate:
As a rule, timeshares don’t increase in value, and you can’t count on them to increase in value over the long term. They may have some residual value after you sell them, but they’re usually worth about 10% of their original purchase price, says Judi Kozlowski, a timeshare resale agent in Orlando.
7. The resale market is not always easy:
If you are in the process of selling your timeshare, you should make sure you have the proper legal documentation before making a sale. That paperwork is crucial to ensure that you are not liable for any claims or damages that might arise from the transaction.
You should also consult with an attorney or accountant before making any decisions regarding your timeshare. A lawyer can help you understand any legal issues that might be involved in the sale, and an accountant can advise you on tax implications. In addition, a professional can provide you with recommendations on how to sell your timeshare in a way that will benefit you financially.