Nothing in life comes without pros and cons and buying a timeshare is no exception. You’ll need to weigh up the advantages of buying timeshare with your own way of life and personal finances. Whilst some people may only be investing a small part of their assets others may well be investing their lifesavings. Which ever way it will always be a smart idea to study the pros and cons before making an investment.
Starting with the pros…First off, timeshares are much more cost effective if you buy a piece of real estate property and end up using it, say, only once a year. Compare spending $200,000 for a property with a timeshare which may cost as little as $10,000 plus annual maintenance fees of $500 per annum. Taking a a period of 30 years as our example the calculation looks something like this:
$10,000 + 30 years x $500 = $25,000 for the entire 30 year lifetime of the property.
That makes a saving of $175,000 over the purchase of a real estate property. Quite a saving isn’t it? Is it really a good invesment to put that much money into a property used so infrequently?
Let’s compare this with hotel costs over 30 years. We’ll use $1,200 per annum as our hotel costs:
$1,200 x 30 years = $36,000 i.e. MORE than the $25,000 you would pay for timeshare over 30 years!
As well as the obvious financial savings you also have the additional comforts of staying in your own home, whereas in a hotel the best you can hope for is a suite. The average timeshare, on the other hand, has two or even three bedrooms, one or two bathrooms, a kitchen with a separate dining room and a laundry room. Not to mention the indoor or outdoor pool which most timeshare properties now have and the full resort facilities – what more could you ask for?
The headache of maintaining the condo is also dealt with if you have a timeshare as this is sorted out by the developer. Compare this to the constant worry of the upkeep on a piece of real estate property.
Another advantage is that you and your partner will definitely make a point of taking at least one vacation a year! What could be easier than planning a trip to your own timeshare condo?
The majority of timeshare companies are associated with other timeshare companies making the exchange of timeshares much easier – another reason why people are so keen to buy timeshares.
Moving on to the Cons of timeshare, the timeshare sector has seen its share of scammers and as an industry been plagued with fraud. There are stories of people being being duped into attending free seminars…then subjected to unethical hard selling techniques. Be wary of these tricks. Read all documentation thoroughly, especially the small print, before signing anything. Find out who you’re dealing with and check out the background of the timeshare company first.
Be wary of paying an overly large upfront fee which will lose you interest on any moneys you’ve borrowed, plus you’ll also be paying the maintenance costs.
Probably the biggest Con is the appreciation factor. Timeshares simply don’t appreciate much in value and may even depreciate over time. They also tend to be more difficult to resell compared to conventional real estate property.
Finally, timeshares may not offer enough flexibility as you will be tied to using it each year during a specific period. There are some companies which offer flexibility but being on a first come, first served basis you are always competing with many other timeshare owners who may be planning around the same period.