If you’ve ever spent time in any major vacation destination, you’ve probably seen someone hawking a great deal on the streets: free tickets or products in return for sitting through a timeshare presentation. These presentations often come in the form of a hard sell, with representatives doing everything they can to prompt attendees to open their wallets.
Of course, given the advantages of these vacation options, should you consider buying a timeshare?
There are a few good reasons to buy a timeshare, including frequent visits to your favorite vacation destination. However, before you make the leap, here are a few things to keep in mind.
1. Do You Know All of the Terms and Conditions?
First things first: buying a timeshare is often more complicated than it first appears. This is especially true if you’re fresh from a meeting with a charismatic salesperson.
During the initial meeting, many salespeople gloss over important considerations when it comes to the terms and conditions. These details can have a huge impact on your financial future.
Make sure you have a complete understanding of the maintenance fees and any special assessments. You’ll also want to learn about the Homeowners Association, and whether it’s under developer or owner control. Find out how many timeshares in the resort are sold out, and what the delinquency rates are.
Details like these can help you predict what owning your timeshare will be like, and whether this option is right for you.
2. Are You Looking for an Investment Property?
If you’re hoping for a long-term investment, many timeshares aren’t the right choice.
Despite the growing market for these properties, timeshares can be a poor investment, as owners tend to lose money upon resale. If your contract allows you to rent out your timeshare, you may be in a better position to make money—provided that you have the time and ability to work to get renters on a regular basis.
As a result of this depreciation, it’s often better to think of these properties as a purchase, not an investment.
3. Are You Prepared to Keep Your Timeshare for the Long-term?
Before you buy a timeshare, make sure it’s a purchase you’re planning to keep for the long term.
As mentioned above, timeshare resales often lose their owners money, so you’ll want to avoid this if at all possible.
In addition, the timeshare resale process itself can be deceptively convoluted.
While there are plenty of reputable timeshare resale brokers that help clients get rid of unwanted timeshares, there are also companies willing to scam clients for a quick buck. They may require significant up-front fees. In some cases, they may not manage to sell your timeshare at all.
That’s why it’s always a good idea to make sure you’re aware of legitimate timeshare exit options on the front end if you’re considering a resale. This can help you recoup a significant portion of your initial costs if you change your mind down the line.
Weigh Your Options Before Buying a Timeshare
Before buying a timeshare, be sure to consider whether or not you’re ready to make this long-term purchase. While these properties may be useful for certain frequent vacationers, other buyers might be better off considering alternate rental options. Do your research before making the leap!
Want to make the most of what’s in your wallet? For more tips on finance, investments, business, and more, check out our other helpful guides.