Buying a Timeshare- A User's Guide
Buying a timeshare can be a great lifestyle investment. If you purchase the right one, you'll have years of wonderful vacations. But first, arm yourself with the knowledge you need to make a good decision.
So you've decided a time share might be right for you. But what else should you know before you buy one? First, you should determine why you want to buy a time share. People seem to buy timeshares for one of two reasons. The first is that they want to vacation in a wonderful place during the same week(s) each year. The second is that they plan to exchange their week with other timeshares from all over the world. They would go to ABC Luxury Resort and the people they exchanged with would go to their resort, located at XYZ. There are over 5000 resorts worldwide to choose from.
There are two main types of timeshares. One is a "fee-simple" arrangement, which means the purchaser has a title, title insurance and a warranty deed. As a purchaser you can sell, lease or will your interest. Most timeshares are fee-simple. Another kind of timeshare is a "right-to-use" arrangement. This means you haven't actually bought real estate, but instead you have the exclusive right to use the unit for a specified number of years. In fact, it's very similar to leasing a car.
Once you understand the reason you want to buy a timeshare, and what kind you're interested in, there are several things you should consider:
- Don't cave in to high-pressure sales tactics. You probably already have an idea of what you want, so take the time to make an informed decision. And remember - if something sounds too good to be true, it probably is.
- Don't think of a timeshare as a real estate investment. Timeshares typically depreciate, much like cars. Instead, think of it as an investment in your future vacations.
- Buy in a high demand area. In the event you decide to sell, you'll likely fetch a higher re-sale price. But also be sure to buy in a location that you like, so you'll actually use the timeshare.
- Ask about maintenance fees. They should not be exorborant.
- Be realistic about how much money you want to spend. Add up the money you've spent on past vacations (travel, accomodations, food, etc.,) to get an idea of how much you should spend each year.
- If possible, buy into a resort that is part of a large management system so you are entitled to low rates at other resorts in the system.
- Buy through a licensed real estate broker.
- Make sure you receive the Title Insurance.
- Keep an open mind. You may want to consider several locations or companies that you like, or even look into buying a used timeshare - you'll probably get it for a song!
- Get everything in writing.
A Few Words of Caution
Even though timeshares offer smart vacation options, there are some things you should be aware of:
- Don't trust envelops bearing gifts. People often receive announcements that they've won a free trip to a tropical paradise. If you have won something, the prize advertisement must state the following:
-a full description of the exact prize
-the cash value of the prize
-whether or not you are required to submit to a sales presentation (or possibly endless numbers of them)
-all terms and conditions attached to the prize - Don't buy into a timeshare that isn't built yet. It's too risky and you may not get what you bargained for.
- Don't buy into a timeshare that doesn't have an Owners' Club.
- Don't buy if the management fees are too high. It's unlikely they'll ever go down.
- Don't rush your decision. You can wait until you find the deal that's right for you.
Before purchasing a timeshare, be sure you have an idea of what you want. By asking questions and resisting high-pressure sales tactics, you'll find the timeshare that's right for you, complete with years of vacations you'll love and fees that work with your budget.