To some, buying a timeshare sounds lucrative: a vacation place you can call home and visit time after time. Buying timeshares today is now part of a $10.2 billion industry with no signs of slowing down.
While many people will tell potential buyers to purchase a timeshare investment, others say to stay far away from anyone trying to sell a timeshare investment. Yet, you don’t need to own a timeshare in order to use it.
So in the end, are timeshares good investments? Here are some of the timeshare investment tips you need to know and make a decision for yourself.
Timeshares Aren’t Easy to Rent Out
What if there is a year where you are not going to use your timeshare so you try to rent it to someone else? Turns out it is not easy.
Many companies that offer timeshares will either not allow the owners to do so or, if they do, they put rules and regulations into place, make you pay a fee, and give them a commission. Yet, this is assuming that your timeshare is located somewhere that many people will want to rent one!
Make sure that if you do buy a timeshare, you buy one that is in a great location that many people visit. Think about it: if you wouldn’t stay in an area that would be less than desirable, chances are that anyone looking to stay at your timeshare in that location won’t either.
They Come With Many Fees
Don’t put the checkbook away just yet, because even though you now own a timeshare, you now have to deal with annual maintenance fees. Overall, this can become a big con if you plan on keeping a timeshare. But why is that?
Maintenance fees are assessed and paid annually and cover operating costs for the timeshare resort, such as grounds and housekeeping services, utilities, on-site management, and much more. What’s even less appealing is that while the value of a timeshare will not rise over the years, the cost of the fees can rise up to four percent each year.
What About Alternatives?
If the time is coming where you now want to cancel your timeshare investment, there are some good alternatives that you can do.
Buying vacation homes or condos are a better investment, but if you cannot afford it, another option is a resort membership. With a resort membership, you can do a one-time payment for access, not become responsible for maintenance fees or taxes, and choose from hotels within the resort’s network with more flexible dates. Another option is buying a unit in a condo hotel that will offer the same types of services as a timeshare.
So, Are Timeshares Good Investments?
If you want a definite answer to the question of “Are timeshares good investments?”, the answer is that it is up to the individual buyer and their circumstances.
The world of timeshare investment buying is very complicated, so if you take your time doing research and making careful considerations of your timeshare’s location and prices, you can see if a timeshare investment is right for you.
If you want more financial advice, check out more of our articles.