By Al and Jean Batson
The Batson Team
A “timeshare” (aka: a vacation ownership) is a property with a divided form of ownership or use rights. These properties are typically resort condominium units, in which multiple parties hold rights to use the property.
Timeshares were very popular long ago before there was access to the Internet, which has brought travelers AirBnB, HomeAway, VRBO and other resources world-wide. With these venues, you just go and enjoy – no ownership costs. Thus, the need for timeshares has changed dramatically, even though resort/hotel chain marketing has not diminished in their efforts to sell them.
Years ago, most timeshares were assigned a specific week and resort with no flexibility other than trading your week with another owner. As they developed over the years, they became more flexible utilizing points, rather than a specific time/place. Hotel chains might offer (for a fee, of course) a transfer of your annual points for usage at any of their hotels, however you can probably, dollar-for-dollar, get a better room deal on your own. Today, most boutique hotels or resorts and large chains offer flexibility to book other locations. It can be challenging to get into the resort of your choice at the time you want to go; especially if you’d like to go for more than one week. Usually there is a fee for every reservation or search outside of your home-location (where you purchased).
Before you attend a presentation, do your homework. Do a cost comparison between staying at a similar resort or condo you book on your own vs. a timeshare with the fees involved. Does it pencil out?
• If it’s an older property, is it ready for remodel? (Annual fees will likely go up significantly)
• What is the annual fee and what does it cover? Get a history of their increases. Most of them increase annually, so if you start at $350/year and keep it for 15 years, it can easily go up to $1,000 or more.
• Are there any cleaning or parking fees once you get there?
• What are the financial resources backing up this property (for repair/maintenance)?
• If you want to use your points at another location, what fees will there be to reserve outside the “network”?
• What are the cancellation fees if your plans change?
• And, are there fees for the company to help you search for a second week? If so, how much?
Compare a VRBO or similar resort you can reserve on your own (without annual, reservation or cancellation fees) to what your annual vacation would cost with a timeshare (factor in the initial purchase price).
Dave Ramsey, renowned financial guru, offers a safe solution to selling your timeshare. “Timeshare Exit Team was founded on the principle that consumers should have an option when it comes to exercising their rights. We are here to eliminate your unwanted timeshare and help you move one step closer to financial peace of mind.” We don’t have personal experience with his program but if you have a timeshare to dispose of, here’s an option to explore: www.timeshareexitteam.com
If you’re interested in timeshares strictly as an investment, financial advisors strongly urge against it. There are many ways to invest in real estate that can be profitable over the years – such as building equity in your personal home [by never pulling the equity out] or a rental under the right circumstances.
We do not personally recommend what anybody should do – these are insights after research and speaking with current and former timeshare owners. It’s your choice.
If you have any questions or an idea for an article, please contact us at: Jean@AlandJeanBatson.com.