Buying a vacation home is a large financial commitment that many families cannot afford, but timeshares present an alternative way to have a home away from home without fully owning a vacation property. A timeshare is vacation property where ownership is split among several different owners, and each owner can use the timeshare property for certain period of time during the year. Several common myths surround timeshares that may cause people to buy into timeshares without fully realizing the risks.
Timeshares Are Valuable as Investments
Perhaps the most dangerous myth associated with timeshares is that they represent a potentially valuable real estate investment, similar to a home. Timeshares share many things in common with real homes and condos, such as a purchase price and the ability to purchase with a mortgage. And timeshare salesmen may claim that they are good investments. In most cases, however, timeshares decrease in value over time. The U.S. Federal Trade Commission states that the value of a timeshare is in their use as vacation destinations and that the resale value of timeshares is often much lower than the original purchase price. It is possible to sell a timeshare at a price higher than what you pay for it, but it is not likely.
Timeshares Make Vacations Cheaper
Another myth about timeshares is that they make vacationing cheaper. It seems intuitive that owning a property would tend to be cheaper than going to a hotel, since owning a home tends to be cheaper than renting an apartment once you pay off your mortgage. Timeshares, however, require users to pay maintenance fees that can amount to hundreds of dollars a year even if you only own one week of time. CNN states that timeshare developers may increase costs by up to 60 percent to cover marketing expenses. "The Wall Street Journal" reports that some timeshare owners end up selling their timeshares for as little as $1, simply to get rid of them and avoid paying fees.
You Can Visit Only One Location
A traditional timeshare involves purchasing a block of time at a specific housing unit, but some timeshare systems allow you to visit different locations. For example, a resort chain might offer a timeshare point system where you purchase a certain number of points that you can use to stay at different resorts that the chain owns.
Considerations
"The Wall Street Journal" states that timeshare buyers are often subjected to sales pitches or seminars that are akin to infomercials in that salesmen try to hype the timeshares or use aggressive sales tactics. Timeshares should be viewed as a vacation alternative rather than an investment opportunity; the costs and benefits should be weighed against the costs and benefits of taking traditional vacations.
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