Unbeknownst to many, time-sharing has actually been a holidaying phenomenon in full effect for well over a decade now. That’s a long time for a lot of mistakes to have been made and subsequently used as reference points on what NOT to do when it comes to time-sharing. The concept is ingenious. Rather than purchasing a property of your own, or spending obscene amounts of money on extravagant hotels over and over again, time-share investors share a property with a number of other users, thus, there is no outright owner. The cost of each share in the property varies according to how long (yearly, fixed period) each user would like it for (usually a week).
Time-share properties can be either rented on a per nightly basis, or bought, rebought or received for free (sometimes not a such a good sign). Though actually taking the plunge into the world of timeshare can be problematic. Often, would-be time-share buyers can find themselves lost in a world of mind-boggling statistics and double-digit interest rates. As with any online purchasing scheme, there are good opportunities, and then there are bad ones, and identifying the former can sometimes be a trying a task. But it doesn’t have to be. A bit of steady research goes a long way…
DO
- …your homework. All legitimate time-share sellers, developers and management companies ought to be verified members of the American Resort Development Association, so checking this out first is a must. Also, take the time to visit the resort to potentially meet any current investors who may be able to give you more of an honest appraisal of the scheme.
- …understand the difference. There are two types of time-share properties. The first fits the conventional description – one property, one purchase fee and regular maintenance costs thereafter for the right to use it at a given period of time. The second is a little more complicated, and operates on a points-based system. Large resort chains such as Marriot and The Hilton often work like this.
- …pick somewhere because you like it. A time-share property should be viewed as an investment in your family, not your future riches. It’s not uncommon for a time-share property initially tipped for huge profitable gain ends up being the bane of some poor soul’s life, due in principle to a swing in market interest but also because he and his family have no interest in using the property for themselves.
DON’T
- …get fiddled by the real estate pitch. Many a holidaymaker has learnt the woes of time-sharing the hard way; jumping at a seemingly golden opportunity after falling for a threadbare sales pitch in a hotel lobby. These guys earn a stack in commission and will almost definitely dangle some sort of freebie in front of you to lure you in. Be smart, say thank-you and walk away.
- …overlook the cost of maintenance fees. If your time-share plan doesn’t come with a fee cap or inflation-protection, these maintenance fees could potentially spiral out of control. Check the properties budget and for any previous work done before buying. Any property charging over $500 a year should be investigated very carefully. Groups such as Resort Management Association can help with this.
- …don’t get sucked in by ‘the deal of a lifetime’. Perhaps the most important factor to remember when buying into time-share is that there are a plethora of existing users out there who are just desperate to rid themselves of their property. As mentioned above, this is often due by and large to the fact that they themselves do not want to use it and they can’t sell the property on. Thus, they are shackled to a crippling expenses at the end of each month/year with no escape route in sight. So look the other way when a ‘stunning’ or ‘beautiful’ property for $1 pops up in your search results, or, if you are a seller, think twice when a ‘buyer’ contacts you claiming that he or she would like to relieve you of your perpetual nightmare.
If treated with care and handled astutely, time-sharing is an excellent way for vacationers to guarantee a lavish and unforgettable holiday. Alternatively, and with a bit of luck, there’ll be people queuing up asking to rent your property – something which can lead to very lucrative profits indeed.
