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Author:
Frank Hague

Timeshares are a large part of the vacation travel industry. Travelers who cannot afford to own a home abroad, or who don't want the worries associated with exclusive ownership, often see timeshares as an affordable alternative.

However, unscrupulous salespeople, poorly maintained properties and unexpected hidden costs have brought a lot of bad publicity to the industry. A well-informed consumer can avoid the common pitfalls.

It is always risky to buy property sight unseen, but many people do this when they purchase timeshares. If you purchase in an area where you wish to vacation, you may be unpleasantly surprised when you arrive at your destination.

However, many timeshares are purchased with the intent of trading them for others in different locations, and in this case the location of the property is a bargaining chip, not the actual physical property. Timeshares in prime locations such as Hawaii are easier to trade than others.

Recently, big corporations such as Disney, Hilton, Marriott and Hyatt have entered the timeshare market, and their properties are of a uniform standard around the world. First, you should know that if you buy a new unit directly from a timeshare company, it may cost up to 60% more than if you purchased from the resale market.

Buying from a time-share company is more expensive primarily because of the company's marketing costs, which include free trips, meals and vacation activities for prospective buyers.

Most customers of these timeshare companies buy on impulse, without any intent to purchase when they first walked into the timeshare seminar. Hard-sell tactics and "Buy-it-NOW-one-time-only-offers!!!" are the rule, and to avoid being pressured into a bad deal, the best tactic is to avoid these sales presentations altogether.

Try the resale market for better deals. Time-share resales are listed on many websites, on eBay and with independent time-share brokers. The search term "timeshare resale" produced approximately 500,000 results on Google, so there are plenty of services to choose from.

If you buy directly from an individual, a resale broker or a lawyer can handle the closing for a charge of $300 to $500.

If you are buying a timeshare for the resale value, consider regular real estate instead. Timeshares do not increase in value in tandem with conventional real estate. From a strictly financial point of view, time shares are poor investments.

Most real estate increases in value, but this is not always the case with time-shares, especially those bought directly from timeshare companies. If you get a good deal on a resale timeshare in a prime location, it may increase somewhat in value. But usually time-shares are like cars -- they are commodities to be used, and are resold for less than the original purchase price. Don't think of timeshares as real estate; you are buying a vacation plan.

Also, unless you buy in a prime location, swapping them may not be easy. Timeshares are frequently sold on the claim that the buyer can trade a week in one place for a week at another location. This is only true if the location is in demand by other vacationers. Otherwise, expect to vacation in the original location each year.

To find out whether or not you will be happy with a timeshare, it may be a good idea to rent one for your next vacation. Many timeshare units are placed on the rental market by owners who couldn't get away to vacation at their alloted time, and these units often rent at bargain prices. Check the same websites that offer timeshare resales for available rentals.

There is a new "points" system being offered by some timeshare properties. Instead of getting a week each year, buyers purchase a set number of "points." These can be redeemed for a week's stay during the peak season, for longer periods during the off-season, or even spread over the year in two- or three- day segments.

Some large hotel companies such as the Marriott also offer a points systems whereby a stay at their hotel earn points in the company's time-share system. Points systems can be confusing, so be sure you have a clear understanding of the services you are buying.

For instance, find out how much advance time is required to reserve a week at the resort during peak season, whether the points have an expiration date, and if it is possible to transfer the points to other facilities in the same resort chain. However, when it comes to vacation planning, the points system offers more flexibility because the buyer is not locked into the same week every year.

Most important, don't forget the annual maintenance fee. Time-share owners are responsible for paying a portion of the property's upkeep. These annual fees, including maintenance and real estate taxes, typically range from $300 to $700 per week of ownership.

In summary, timeshares can be a good buy if they offer some flexibility in terms of transferring to other locations and timing your vacation.

The typical timeshare is a small condo with kitchen facilities and one or two bedrooms, ideal for a family vacation, and since such units rent for $150-200 per night, a timeshare purchase may be a cheaper way to travel. However, if you are a mobile traveller who likes to stay in a different town every night, a single person who doesn't need the extra space, or if you travel at unpredicatable times, then a time share may not be suitable.

About the author:

To Timeshare Or Not by Frank Hague Living on a Cruise ship by Frank Hague Your own Condo on a Cruise ship by Frank Hague

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A Quick Note From The Publisher... If you like the article above, you may be interested in the following article which is also related to Timeshares... Timeshare Salesman - The Good, The Bad And The Ugly Actually I did not find much of anything good to say about timeshare salesman. You be the judge. It is a sales persons job to sell you their product, make money for the company and make a living for themselves. All well and good. When you pay your money for anything, whether it is a candy bar, a car or a house you expect to get fair value for your money. You would not expect to pay $100 for a candy bar. And if you spent $10,00 for a car you would expect it to have at least a steering wheel and tires. And if the person selling you the candy bar said it was 100% chocolate you would reasonably expect it to be chocolate. And you would expect to be able to eat it anytime you wanted to. When you run into a timeshare salesperson just throw any thought of truth out the window. Their job is simply to take your money no matter what it takes. And the truth will stop them cold in their tracks. Because buying time shares from a presentation is probably one of the worst deals imaginable. So the salesman has no choice but to lie to you. It is as simple as that. And how do you know when they are lying to you? Simple - anytime their lips are moving. Now I ask you again, am I being to harsh? So what are some of the ridiculous stories that you will be told. Well let's start with the one about this being a very good economic decision. Do the numbers work out that way...? Lets see what happens over the next 10 years. You purchase a timeshare for say $15,000 and have a 10 year payout of the loan. Financing through their company will cost you at least 15% interest. So that is $1932 per year. And then there is yearly maintenance fee of around $450 per year. And then there is exchange membership of around $100 per year and vacation exchange of around $130 per vacation. For a grand...