answersLogoWhite

0


Best Answer

Don't buy a timeshare. Let me repeat-- Don't buy a timeshare.

People routinely get seduced into thinking their little time in heaven should translate into doing it again and again.

Don't be fooled. A timeshare is an expensive hotel room without services. You can buy five-star-hotel services anywhere on the planet for much less and with much greater flexibility.

Let me repeat-- Don't buy a timeshare!

Pros and cons

One of the major benefits of the product is the fact that vacation timeshare is real property. Resort developers purchase land in a location and develop a timeshare resort. They are actually selling consumers deeded weeks of real property at a specific location, meaning customers can do what they wish with the weeks they own. This flexibility includes the opportunity to rent out weeks that are not used or lend them to friends or family. A timeshare unit is real property, it does require constant maintenance. With each unit owned by many people, a competent management team is necessary for it to operate in an efficient and economically beneficial manner.

The problems discussed below notwithstanding, timeshare has the potential to provide a range of vacation experience in a variety of locations, for substantially less than an equivalent resort if rented on the open market. This is particularly the case with overseas travel where a convenient and economical location is sought, rather than a 'holiday' at a given resort. An often overlooked advantage is that timeshare units are usually 'self-catering' with a full or partial kitchen and have readily available laundry facilities. This frees the occupant from the necessity of eating at retail establishments and allows purchase of local products from markets, thus providing a more flexible and economical approach to the daily requirements of life.

To gain the most from a timeshare experience it pays to research any purchase thoroughly. Understand the precise nature of the particular timeshare contemplated, the management scheme and competence, the time of year or other conditions and the details associated with the available exchange mechanisms. The key is to be knowledgeable and flexible. Understand what the benefits and potential problems are, and how to use it to maximum advantage.

The timeshare industry has been widely criticized and even likened to a travel scam.[2] Unlike the customary renting arrangement, where the customer decides every year on the quality and price of accommodations, timeshare requires a major payment up front. Doubts exist as to whether timeshare buyers ever recover the money spent.

Many people complain that they cannot trade their weeks easily, or that the weeks they bought are suddenly "unavailable". There are also complaints that owners have to return to the same resort every year, but several companies exist that enable timeshare owners to exchange their weeks into literally thousands of resorts around the world. However, using these companies increases the overall financial cost of owning a timeshare. There are a growing number of independent timeshare exchange organizations available to timeshare owners. One of the biggest issues for exchange is that it depends on another owner to deposit a desired week, which may not happen. Another issue is some exchange systems have hidden rules and the deposit unit may not be strong enough to allow the owners to get the vacation they want. Also, some owners can not make a decision on when to vacation or where to vacation until the last minute, which often results in a bad exchange or no exchange at all.

Other complaints involve issues surrounding the yearly maintenance fee. Some critics talk of ever escalating fees that owners cannot afford, and the resulting financial pressure prohibits them from keeping their weeks. In the worst cases, there are maintenance fees, homeowners' fees, rental fees, fees for trading weeks, property taxes (depending on location), and an assortment of hidden fees that buyers were not aware of when they first bought their timeshares. In addition, if a resort suffers as a a result of a natural disaster, it may need some special assessments to recover it.

As real estate, timeshare requires the owner to take an interest in their resort's operation and, unfortunately, most owners are not prepared to do so since they see the purchase as just a vacation unit.[citation needed] Also, when owners first purchase the timeshare, they have little knowledge of the local renting market and local season, and end up getting a time slot they can not use. When they then try to rent it out, they find that there is no chance to rent or the rent income is not able to cover their maintenance fee.[citation needed]

People interested in purchasing a timeshare are strongly advised to look online at the secondary market listings for the development they are interested in. Developers put a very large mark-up on new inventory and a new owner will find the resale value of their timeshare to be half or less of what they purchased it for. In the very worst of cases, timeshare resales are virtually impossible and users are stuck paying fees indefinitely. This is what is commonly known as the "timeshare trap,[citation needed]" Sometimes, when it happens, owners can talk to the resort and the resort may be willing to take it back if there is no loan attached to it and the maintenance fee has been paid. Sometimes, there are various charity groups that are willing to accept a timeshare if no loan is attached and the maintenance fee is current. With the development of the internet, there are a lot of sites that charge little or no fees to let owners put "for sale ads" that will reach a larger market over the internet. However, it is usually hard to evaluate the value of a timeshare, thus it may take a while to sell or to get a reasonable price.[citation needed] If the unit belongs to a big chain, there is a better chance that enough people know the product and desire to add more vacation time from that product, and will thus increase your chances to sell. There are also sites that let owners put their share up for auction, and within weeks it will be taken if the ad is successful[citation needed]. Some of the resorts have resale programs that will take a cut of the final price. If owners are not very comfortable about reselling by themselves, there are real estate companies that can do that for the owner, although some charge a hefty up-front costs. Usually, if there is no sale, an owner will have a difficult time trying to get the money back.

There are also a lot of timeshare user groups that form different forums. If one happens to have an interest in purchasing a timeshare, one may want to check various internet communities like Yahoo, AOL, Google. If the owned unit is part of a major point system, those groups also provide a place to rent out your points or rent more points from other owners.

Like any other product, timeshare exchange is subject to the law of supply. This should make the exchange mechanism a fair and meritocratic system. For example if a timeshare owner deposits a studio apartment in low season that owner is unlikely to be able to exchange into a villa during a country's high season. In practice the major exchange companies have proprietary exchange formulas that add complexity to the system. The study of and issues revolving around exchanging are beyond the scope of this article and should be researched before making any timeshare purchase.

One aspect that is little known outside of the travel industry is that timeshare companies generally have very generous compensation programs for those sales agents able to convince individuals to take a tour of their timeshare facilities (something that normally takes approximately 90 minutes).[citation needed] With this in mind, a crafty individual can bargain for incredible vacation deals with a sales agent if they are willing to spare a bit of time. At one time, timeshares were known for applying considerable pressure to these touring individuals to purchase (even prompting a South Park episode called Asspen parodying the process), though that is generally supposed to have been lessened after a backlash by customers. The movie Once Around provided a look at the "inside" of a timeshare company. Each timeshare has its own rules for who it is willing to allow to tour, and most only allow one tour per year, though this does not prevent multiple tours from different resorts. An entire industry has sprung up based around this concept, negating the need for the frugal individual to do his own bargaining.

Several people have discussed what should be the motives for purchasing a timeshare.[3] It is important to review them based on the facts and avoiding to be trapped with false expectations.

Buying a timeshare can sometimes end up in a scam. Other times, some agreements will not be realized.

Most buyers come with high hopes with the units they are buying. Some did not even saw the real place, they just saw it through presentations or pictures. And much of the disappointment comes when their expectations were not realized.

User Avatar

Wiki User

14y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: What are the risks involved with buying a time share?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Continue Learning about Finance

What are benefits of Composite Risk Management?

There are many benefits to composite risk management. By determining the types of risks involved in something ahead of time, problems are less likely to arise. One will already know which risks to look for, so issues can be resolved quickly. Accidents are also less likely to occur.


What are some of the risks involved in investing in Bonds?

Bonds are one of the most preferred investment instruments for the risk averse investor who wants a decent return on investment (ROI) and capital preservation at the same time. Bonds are debt obligations which pay out a fixed interest on the invested sum and pay back the whole invested principal at maturity. Unfortunately, Bonds are not so straight forward as they might sound. There are many risks involved in investing in Bonds. These risks can cause losses to the investors bond portfolio and defeat the whole purpose of capital preservation. Some of the risks involved in investing in Bonds are: 1. Interest Rate Risk 2. Re-investment Risk 3. Call Risk 4. Default Risk & 5. Inflation Risk


What can happen if you miss time share's monthly payments?

What can happen if you miss your time share's monthly payments depends on the contract you have with the company you purchased the time share from. In most cases you can expect that eventually the time share will be repossessed by the lender and sold to someone else. You will still owe the money that remains on your contract, even if you don't have the time share any longer.


What does cash buying mean?

It means you pay for whatever you are buying in full at the time of the transaction.


What does share price mean?

Share price refers to the price of a particular company's share that is being traded in any stock marketat that particular time.

Related questions

Are there any real advantages to buying a timeshare?

Buying a timeshare is great if you plan to vacation. I would suggest buying a time share from an owner you will get a better deal.


Two scarce resources are involved when making buying decisions?

Income and Time


What are the risks of buying a cheap car for sale by an individual?

The risks for an individual buying a cheap car for sale are the the car may have mechanical problems, the car may have been in an accident at one time, and interior may be deteriorating. There are so many problems that you should check the car out completely before buying.


What are the risks of drinking heavily after prostate surgery?

Aside from the normal risks involved with heavy drinking, heavy alcohol consumption may result in a slowed healing/recoery time, and may increase the risk of infection.


What are the dangers and security risks of using electronic medical records?

All electronic records have some security risks. However they also allow doctors to share information that saves time, lives and money so the trade off is in their favor.


Where can I find information on buying a time share in Florida?

If you are looking to purchase or just are interested in looking into time shares in general that are located in Florida, I would suggest FindAShare(dot)com


What are the pros and cons of buying products online?

Some advantages of buying online are: saves time, shop when and where you like, you can compare prices and the inventory is larger. The disadvantages are: shipping costs, you have to wait a few days after buying something, security risks because of personal data and credit card numbers and a lot of trouble if an item is broken.


What are the risks if one were to buy a puppy without seeing it first?

The risks that you may entail when buying a puppy without seeing it include that the puppy may be too big for your living space, the puppy may be sick or injured, it may be too aggressive for you or the kids, and finally, the puppy's personality might just not be a good fit with your personality. It is strongly recommended that you spend time with a perspective pet before buying it.


How does one sell a time share?

Timeshares are known to often be scams. If one has bought a timeshare and finds someone who would be interested in buying it, they should sell it to get rid of it as soon as possible.


What are are benefits of Risk Management?

There are many benefits to composite risk management. By determining the types of risks involved in something ahead of time, problems are less likely to arise. One will already know which risks to look for, so issues can be resolved quickly. Accidents are also less likely to occur.


Is it easy to sell your time share?

Yes, it is easy to sell your time share. If a personal ad does not find a buyer, there are several companies such as sell a time share or sell my time share now that will purchase it.


Where can one purchase Time Share Rentals?

One can purchase a Time Share Rental from a Time Share Broker. Time Share Broker Sales and Licensed Time Share Resale Brokers are two good websites for locating brokers who have access to time shares all over the world.