The Pros and Cons of Owning a Timeshare
If you’ve ever considered investing in a timeshare, there are many options to consider. You need to know how they work and if that fits into your yearly vacation plans. Here is a breakdown of what timeshares are and if they are a worthy real estate investment.
What are timeshares?
Timeshares are typically fully-furnished apartments or condos that you can pay to rent for certain weeks of the year. For example, you may pay to rent the same condo in Florida, for the same week or two of every year. You will sign a contract and pay a lump sum to ensure that for the time-period of the contract, every year the condo is yours for a specified date range. The average sales price of a share of a condo is $19,000, with a smaller yearly maintenance fee.
Some companies are offering a points system timeshare system, that can provide more flexibility. Users earn points that can be used at any time of year at certain hotel or property system. For example, if you buy into a hotel chain’s timeshare program, you have the flexibility of staying at any of those hotels locations, with some flexibility added in.
Timeshares can be a long-term financial commitment. Most timeshares don’t have an expiration date, meaning you’re saddled with a yearly maintenance fee until you sell your timeshare. This isn’t a problem if you use your timeshare every year, but if your enthusiasm wanes, getting rid of your timeshare could be slightly more difficult than selling a house.
If your finances aren’t exactly stable, investing in a timeshare may not be for you. You want to make sure that you can always afford the yearly maintenance fee. While affording a monthly mortgage is still something you need to plan for, a mortgage ends when the loan is paid off. Timeshare agreements don’t typically have end dates, so be prepared to pay fees until you get rid of the share.
You typically save on travel expenses, because you don’t have to pay for a place to stay. Cost per usage can work out when you factor in the cost of hotels on normal vacations. Because you have access to a full kitchen in most timeshares, you also can save money when you travel, due to less restaurant dining.
Some timeshare programs offer trades for users, letting them trade their weeks for shares in other locations. For example, you’ll give up your week at your normal timeshare in Florida, for a week in Spain.
One of the pros that timeshare users note is that you’re guaranteed a vacation once a year. Whether you rent your timeshare out, or trade it for another week, it’s certain that it forces you to take the time each year to take a break and go on a vacation.
If you’re concerned that the excitement of going to the same place every year may wear out, consider purchasing of a timeshare with a points system, so you can trade weeks and experience new locations.