The timeshare industry has seen its ninth consecutive growth in recent years. Now, it boasts a total of $10.2 billion in sales with an average occupancy rate of 80.8%. Lots of people notice this trend in the market and often think about investing in a timeshare.
It’s a good move, after all. Timeshares are affordable, available throughout the year no matter where you are, and they’re a sustainable commodity in the market, requiring little maintenance.
Are timeshares a good investment, though?
Today, we’re laying out a short guide for you to learn if they’re worth the value you think they have. Read on and learn whether investing in a timeshare is the right choice for you.
How Do Timeshares Work?
In a timeshare, you’re buying a piece of property you can use along with others who can also make use of it. The reason it gets its name is that you can only use the property for a certain part of the year. There’s no need to worry about running into the other property holders as schedules tend to be weeks apart from each other.
The cost for a week (the usual time allotted by the property owner) depends on several factors. The location of the property, it’s size, the integrity of the deed, and the period when you buy the timeshare all count towards the total cost of your share.
Different Kinds of Timeshares
Are timeshares a good investment? A large part of knowing whether they are depends on the type of timeshare you get.
1. Fixed Week
A fixed week timeshare gives you rights over the property for a fixed week in the year. The week you have reserved can’t get snagged by anyone else. This presents you with security in your timeshare.
This type of timeshare is great if you’re into having a routine. This way, no one can take away your week from you no matter what. This sets you up to plan an entire year ahead for your vacation.
A floating timeshare means you have some flexibility with when you’ll use the property. This type of timeshare allows you to reserve a specific period in the year. For example, you can set to have your week set any time between July and August.
This way, you can change plans at the last minute should there be any complications in traveling. The drawback with this timeshare option is that it may be hard to get the week that you want. Other property members may also want to rent out the week you want if you haven’t booked it yet.
In a right-to-use agreement, you have the same conditions as the fixed week timeshare. The only difference here is that you don’t own any property during your week. Instead, you only have a contract to bind you to the agreements you’ve made with the property owner.
This type of timeshare costs more than the others. However, since you don’t own any property, you don’t have to pay any of the annual maintenance fees.
Advantages of Getting a Timeshare
Getting a timeshare can present you with many advantages if you know what you’re getting into. Let’s take a look at the benefits below:
Timeshares are famous for being a cost-effective purchase. You only pay for the week you use plus a maintenance fee divided by the other people with a timeshare in the same property. You get to use an amazing property in a high-value area and not worry about any maintenance throughout the year.
2. Stability Over a Long Time
As mentioned above with fixed timeshares, it provides long-term security for your vacation week. This also ensures you have a fixed place to have a vacation in. You won’t have to stress over where to go and how long your stay will be.
Everything is set as soon as 1 year before your vacation this way. You only need to wait for your allotted week and work hard until you do.
3. Tradable and Offerable
If you won’t be able to make your allotted week, you can trade with others with a timeshare. This makes timeshares a somewhat flexible commodity. You’ll be able to exchange dates with others so long as you have an agreement.
If you lose the motivation to travel though, you can share your week to anyone who may find it interesting. You can share it with your family for free or to your friends for a price.
Drawbacks of Having a Timeshare
As with everything, timeshares also have their drawbacks. Consider these before you consider investing in one.
1. Prices Don’t Increase as Time Passes
A common belief is that timeshares are a foolproof investment coz they will earn a profit in time. Most people trying to sell you the timeshare will say the value will increase as time goes on. The truth is that it doesn’t.
Lots of other timeshares are on the market. This means there’s no demand for it. Making a profit by selling your timeshare at an increased price is difficult to achieve.
2. Impossible to Stabilize Foreign Timeshares
You can also invest in foreign timeshares if you’re able to find one. They often offer a refreshing view and a nice change in scenery for a vacation home. The only problem with them is they’re tricky to nail down in a contract.
Certain laws prevent foreign people from owning property on their land. It may become a problem when you want to make use of your week there. They also tend to tax you more in this case.
3. You Have to Pay Fees Even If You Don’t Use Your Share
As mentioned above, you have the option of passing on your week if you lose the motivation to travel as your allotted time approaches. That doesn’t mean you’re free from any fees, though.
You will still have to pay the maintenance fees expected of you at least once a year. Often, this amounts to half a thousand dollars or more. You’ll have to use your week if you want to make sure you’re not losing money in the end.
What happens if I just stop paying my timeshare? In some cases you missed one maintenance fee on your timeshare, this could lead to reporting you to collections which will result in negative credit score, as well as harassing phone calls and threatening emails demanding payment. However, with the right help of reliable timeshare cancellation companies, you can still get out of timeshare without ruining your credit. Just don’t stop paying on your timeshare yet.
Are Timeshares a Good Investment?
Are timeshares a good investment? Hopefully, our guide here helps you make the right decision. Take time to consider all the ups and downs.
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