Posted on June 09, 2023
As economies worldwide show signs of recovery following the global pandemic, potential buyers are hunting for profitable opportunities, and many have set their sights on timeshares.
A timeshare is a type of ownership or right to the use of a vacation property, where multiple parties hold rights to use the property, and each sharer is allotted a period of holiday time. The question then arises: is now the right time to buy a timeshare?
To get to the answer, we need to consider several factors. These include the current economic climate, changes in the tourism industry, and personal financial health, among others.
Since 2020, the economy has been on a roller-coaster ride due to the impact of the global pandemic, with tourism being one of the most hard-hit sectors. However, as the world gradually reopens, we are seeing an upturn in the tourism industry.
The Transportation Security Administration reported that the number of flyers making their way through U.S. airports over the recent Memorial Day holiday weekend exceeded 2019 numbers, showing that tourism has bounced back.
These developments make it tempting to consider a timeshare purchase, keeping in mind that buying a timeshare with today’s money locks in the cost of accommodation at today’s value as a hedge against inflation.
In the wake of the pandemic, there have been important shifts in the tourism industry. Most notably, there has been a rise in the demand for private, spacious accommodations as people seek safer travel options.
Timeshares, particularly those with larger, multi-room units and in-room kitchen facilities, are well-positioned to meet this demand. Consequently, buying a timeshare makes sense if you can find properties that align with your travel needs.
Technology has dramatically changed how we engage in timeshare ownership. Innovative platforms have made it easier for timeshare owners to exchange or rent out their timeshares, providing more flexibility and potential financial gain. However, it's worth noting that this also means greater competition if you're considering buying a timeshare as an investment to rent out.
Changes in booking technology have also improved timeshare ownership, especially point-based programs where an owner uses points to book accommodations. These platforms allow owners to book as a far as 13 months in advance among resorts within their ownership network, such as Disney Vacation Club or Marriott Vacation Club.
While the broader economy and tourism trends are important, the decision to buy a timeshare ultimately depends on your personal financial situation.
Timeshares require an upfront cost, (although resale prices are far lower than prices charged at the resorts) as well as ongoing maintenance fees. If you're currently in a solid financial position with a steady income and good savings, buying a timeshare makes sense. If your financial situation is precarious, it may be better to delay your purchase until you're more financially secure.
This is the most important reason to buy timeshare, as it should be considered for its quality-of-life benefits. If you love to vacation at the same place each year, a timeshare could offer you a cost-effective way to do so.
Even if you're someone who prefers exploring new locations every year, a timeshare is a very appealing option due to the points programs currently on the market as well as the option to exchange ownership with companies such as RCI, Interval International and 7Across.
There are significant health benefits associated with taking an annual vacation, as taking regular trips have proven to reduce the risk of heart disease or heart attacks compared to those who do not regularly vacation.
A major factor to consider when buying a timeshare in the current environment is the robust resale market. In the vast majority of cases, resales offer the same benefits as buying a new timeshare but at a fraction of the cost.
This can be particularly beneficial during uncertain economic times, where keeping costs low is essential. However, navigating the resale market can be complex, and it's crucial to do your due diligence to avoid scams.
As remote working becomes more prevalent, vacation patterns are also changing as more workers combine work with vacation destinations. Many people are now able to work from anywhere, leading to an increase in extended stays at vacation spots.
This trend is beneficial for timeshare owners who can stay for longer periods at their timeshare properties or trade for longer stays elsewhere. Therefore, if you anticipate being part of this remote work trend, a timeshare might offer you the flexibility you need for your evolving lifestyle.
As a result of the pandemic, travel restrictions and changing policies have become a new norm. The uncertainty around international travel might lead many to focus on domestic locations for their timeshares. As such, if you're considering a timeshare in a foreign country, it's vital to keep abreast of travel advisories and possible quarantine requirements, as these can impact the use of a timeshare.
Finally, understanding the timeshare contract is critical, especially in uncertain times. These contracts can be complex, with many nuances that could impact your decision to buy.
Key things to consider include the type of timeshare (fixed, floating, or points), the flexibility of use, any cancellation policy, and the costs of management fees and special assessments. In the current environment, it's particularly important to understand what happens if you can't use your timeshare due to travel restrictions or other unforeseen circumstances.
To answer the initial question, "Is now a good time to buy a timeshare?", we'd say now is the time to do so to beat the rising costs of vacation accommodation due to inflation. If you find a property that aligns with emerging tourism trends, are in a good financial position, and like the idea of having a regular vacation spot, then buying a timeshare could be a good move.
The good news is that you are already researching the timeshare resale market or you wouldn’t be reading this article. Resale prices start at 50-60 percent below resort retail prices, mainly because of the way they are sold at the resort. Some timeshare resale prices are even lower depending on the type of resort, location and type of timeshare.
Because resorts need to recoup sales and marketing costs, they mark up their prices to cover these costs, which are as much as 60 percent of the retail price. On the resale market, those costs do not exist, which is a huge advantage for savvy buyers who understand the market.
To find the best timeshare for your vacation needs, decide where you most often like to vacation. Is it closer to home or a fly-to destination such as Hawaii? Once you have decided, go to the search bar at the top of the page and enter in your favorite town or state and check out the timeshares for sale in our database for that destination.
If you have any questions, reach out to us on 800-640-6886 and we’ll be happy to help.
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