Be an Informed Timeshare Owner – Things to Know Before You Buy
If you are someone who enjoys vacationing at your favorite destination year after year, you might have wondered whether to buy a timeshare. Timeshares offer the opportunity to own a piece of vacation property that you can use for a specific period each year. However, purchasing a timeshare is not a decision to be made lightly.
In this comprehensive guide, we will go over what to know about buying a timeshare and the key points you should consider before buying, including the types of timeshares, the costs involved, and the pros and cons of ownership.
Understanding the Types of Timeshares
There are two main categories of timeshares: deeded and non-deeded.
- Deeded Timeshares: With a deeded timeshare, you own a specific share of the property, granting you the right to use it for a certain time period each year. The ownership is typically divided into weeks, and you receive a deed that identifies your ownership interest in the property. Deeded timeshares can be sold, inherited, or rented out, just like any other piece of real estate.
- Non-Deeded Timeshares: Also known as right-to-use timeshares, non-deeded timeshares don't involve direct ownership of a particular resort. Instead, you sign a lease or membership agreement for the right to use accommodation at a resort for a certain period each year. The lease term can range from a few years to several decades. When the lease expires, your right to use the property ends.
Fixed Week, Floating Week, or Points-Based System
Timeshares operate on different usage systems, which will determine when and how you can vacation at a property or, in the case of timeshare points ownership, within a network of resorts. The three most common systems are fixed week, floating week, and points-based.
- Fixed Week: With a fixed week timeshare, you have a designated week each year when you can use the property. The week is usually numbered, and the dates will vary from year to year based on the timeshare calendar, as a timeshare calendar doesn’t exactly align with a standard calendar.
- Floating Week: A floating week timeshare allows you to book any available week within a specific season or range of dates. This provides more flexibility, but you might face competition from other timeshare owners for popular weeks.
- Points-Based System: Points-based timeshares assign you a certain number of points each year, which can be used to reserve vacation time at various properties within the resort's network. The number of points required for a stay depends on factors like the size of the unit, location, and time of year.
Assessing the Costs Involved
A big part of learning what to know about buying a timeshare involves various costs, both upfront and ongoing. It's important to understand these expenses before committing to a purchase.
- Initial Purchase Price: This is the amount of money you pay for your week, right-to-use or points membership. Prices can vary widely, depending on factors like the location, size, and amenities of the property. This is where the resale market can have a big impact, as resales are significantly less than the prices charged at the resorts.
- Annual Maintenance Fees: As a timeshare owner, you'll be responsible for paying yearly annual dues or maintenance fees to cover the upkeep of the property and its amenities. These fees can increase over time, and failure to pay can lead to losing your timeshare rights.
- Exchange Fees: If you want to exchange your week or points for a stay at a different property, either within the resort's network or through an exchange company, you may need to pay exchange fees.
- Financing Costs: If you're financing the purchase of your timeshare, you'll also need to consider interest payments and other loan-related expenses. For resales, this isn’t as common since resale prices are so much lower than resort prices and are often purchased outright rather than financed.
What to Know About Buying a Timeshare
Before you buy timeshare, consider the advantages and disadvantages of ownership.
Pros:
- Guaranteed Vacation Time: Owning a timeshare ensures you'll have vacation accommodation reserved for you each year, encouraging you to take regular breaks and relax.
- Familiarity and Comfort: Returning to the same location every year is like owning your own vacation home, with a sense of familiarity and comfort, allowing you to build cherished memories and feel at home in your vacation spot.
- Amenities and Services: Timeshare properties often come with quality amenities and services, such as pools, fitness centers, bars, restaurants and activity programs which can enhance your vacation experience.
- Expanded Use Options: Timeshare exchange programs such as RCI or Interval International allow you to use your week or points for vacations at different properties within their network of affiliated resorts.
Cons:
- Limited Flexibility: If your circumstances change, such as health, job or family needs, you may find it difficult to use your timeshare during your designated fixed or floating week.
- Ongoing Costs: Annual maintenance fees can increase, making timeshare ownership more expensive than initially anticipated.
- Travel Limitations: Owning a fixed week timeshare might limit your travel options, as you may feel obligated to return to the same destination each year instead of exploring new places.
Research Before You Buy a Timeshare
Prior to choosing a timeshare, research the property, its management company, and/or the developer. Consider the property's track record in terms of occupancy rates, maintenance, and financial stability. Definitely check timeshare resales to see what deals are on offer that can save you thousands of dollars at your favorite resort.
Beware of High Pressure Timeshare Sales Tactics
Unfortunately, the timeshare industry has been afflicted by questionable sales practices. Be cautious of high-pressure sales tactics and promises that seem too good to be true. Always verify the legitimacy of the company and its representatives before making any commitments or providing personal information.
Consider Renting Before Buying
If you're unsure whether timeshare ownership is right for you, think about renting a timeshare first. This allows you to experience the property and its amenities without making a commitment. It also provides insight into the timeshare community, helping you decide if it's a good fit for your vacation needs.
Buying a timeshare can be a great way to secure annual vacation accommodations and create lasting family memories. However, it's crucial to understand the different types of timeshares, their associated costs, and the pros and cons of timeshare ownership before making a decision. By following these guidelines, you can enjoy the benefits of timeshare ownership while minimizing the risks and challenges associated with this unique form of vacation property ownership.
Go with Timeshare Resales
Now that you understand what to know about buying a timeshare, always consider the online timeshare resale marketplace before buying a timeshare, especially if you have responded to one of those special long-weekend deals at a timeshare resort. You are sure to be invited to a sales presentation, so check out the available timeshares for sale online for that resort so you’ll know what the real value is, not just the marked-up prices at the resort.
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