Three Time Share Myths

Timeshares have racked up quite a reputation over the years.  Lets take a look at some of the most common myths and lies when it comes to buying or selling timeshare.  There are plenty so I will just run over the top three myths here.

Myth 1.  Timeshares are not an investment

I hate to tell all of you out there that may have fallen for this line that buying a timeshare is certainly not an investment.  Well you could consider it a similar investment to a Cadillac or something comparable.  You should only buy a timeshare if you plan to use it to take vacations.  And, yes it does have the potential to save you money in the long term with regards to vacations.  It is debatable about about how much money a timeshare can save you.  That really depends on too many factors to easily calculate.

During a time when people are not sure if real estate in general is a good investment and budgets are being slashed timeshares can most certainly not be considered a safe place to hide your money.  That said, there are good deals out there and most people are certain that the vacation industry will come back at some point.

It is actually against the law in some states to sell timeshare as an investment.  You can look at timeshare as an investment in your family or as a fail safe way to ensure that you take a vacation, but if you go into it with the presumption that you will not make any money off of the deal you will not be disappointed.

Myth 2.  Timeshares are worthless after they are purchased.

This is also not true at all.  There is a huge industry out there based on timeshare resales.  The truth of the matter is that timeshare resales often come from people who bought unwisely in the first place and may be looking for a way out.  These unfortunate individuals will usually accept a much lower selling price than the market will support.  This in turn drives down the overall price of the market.  These myths are propagated by people who have the potential to profit on either side of the game.  Either by buying your timeshare for a deflated price or rescuing you from a bad deal.  Neither scenario is the bottom line and both are unethical.

Two factors influence the sale of your timeshare above all else.  Those are the price and the advertising.  If you are priced too high you will not sell and if your timeshare is not visible it will not be sold even if you are selling at below market value.  Make sure that you are taking the proper steps to sell your timeshare in order to get the right price.

Myth 3.  You should not pay upfront fees

I hate to say this but it is true.  The timeshare market is unlike the traditional real estate market in this aspect.  Residential realtors usually think they are doing well if they are closing more than 2 deals per month.  Timeshare brokers would go out of business at these rates.  Timeshare sales simply do not generate as much revenue as other forms of real estate and for this reason upfront fees are common.  There is more advertising per deal in a timeshare transaction so the more labor intensive business model will of course be higher priced than the traditional model.

What you need to determine is what you are getting in return for the upfront fees that you are paying.  And, you must make sure that you are not paying for any unnecessary services.  Like a real estate appraisal for your timeshare.  Appraisals are not usually required for the sale of a timeshare and if they are they will be paid for by the buyer.

Here are some facts that you can take to the bank.

Buying a resale will get you a better price than a builder deal.  You will be buying into an established community with a track record that you can review.  This will give you a good idea of how desirable a purchase you are making as opposed to looking at builder projections.

Pay cash for a timeshare if at all possible.  Interest rates on timeshares tend to fit into the luxury category and because of this you could easily spend more than double the original sticker price.

 If you are selling timeshare market, market, market and if you decide to go through a broker expect to pay some fees.