Should you Invest in a Timeshare? by Ivan Cuxeva Jr
In a property surrounding much hype.
Purchasing a timeshare property is a huge investment and its purchase should be given the due importance. The foremost question that needs to be answered is whether the investment is really for you? Questions that should follow suit are Can I afford this investment? How often is the unit going to be used? What if I want to dispose long before my contract expires? Am I prepared to bear the depreciation at the time of selling? Would the property be as attract at the time of selling it?
Is that place right for you to go year after year? Is the timeshare just for vacation purposes or will it be a long term investment?
It recommended that a minimum of nine months of proactive preparation and thorough research be invested towards choosing the right time share prior to actually signing the timeshare deed. That being said, there a multiple factors that need to be weighed in prior to deciding whether or not a time share is the ideal investment for oneself.
An investment has a different meaning for different people, with an individual's economic status being the main differentiating factor. To add to that the thought of purchasing a vacation home is a viable yet minor investment for the rich and famous. However it is a dream that many belonging to the middle class can only dream of and a considerably small percentage can work hard enough to invest towards.
The concept of timeshares was discovered in Europe in the 1970's to realize the dreams of the large middle class. Its discovery satisfied the desire of procuring a dream vacation home on a budget.
The concept gained huge popularity since it inception and today has resulted in over two million Americans owning timeshare properties.
What is a timeshare you ask? A timeshare is a real estate property split into many ownerships and all the owners share the cost.
Timeshare ownerships are classified into two types of plans, deeded and non-deeded. Deeded plans allow the owner to buy the time share unit for 30-40 years and are further classified into fixed use and flexible use.
Fixed use timeshare allow the owners to use the property only at a specific time and specific number of years where as a flexible use timeshare allows the owner to vacation at the property at any time of the year but only on first come first serve basis as the option is very popular.Non-deeded plan also called the right to use plan is like a lease on a property for a specific period of time where the owner loses all the rights on the property after the lease expires.
After clearly understanding the types of timeshares, the next appropriate step is to delve into the facts of the timeshare. Timeshares are usually common to popular vacation destinations or places having a high tourist influx. Therefore, the cost of the timeshare is largely dependent on the location and season of the year. In addition to the cost of the timeshare, the cost of property maintenance and various other fees need to be factored in as variable costs, which are dependent on the location.
The one good thing about timeshare is that the owner(s) don't have to worry about the upkeep and maintenance of the timeshare unit. What a potential owner really needs to think deeply about is whether it is worth paying hundreds of dollars every year in addition to the thousands that have already been paid towards the purchase of the timeshare where the owner would spend a maximum of two weeks a year. Cost of spending for the maintenance may be reasonable only if the maintenance fee is low, which in reality is not the case.
On a more positive note, a timeshare will be a lot more cost effective than a hotel or vacation home in the long term. For example, if the total cost of living in a hotel over a three decade period is compared to the investment towards a timeshare. But then, who would want to visit the same place at the same time of the year for 30 years?
Though timeshares offer exchange of properties with other owners across states and countries it may not be that easy to actually put that option into action. In addition, it is a smart move to compare the timeshare to various available alternatives in a particular area. Time shares are expensive in some seasons due to their proximity to beaches, mountains or their location in a city which has warmer weather compared to the rest of the country in middle of winter. Example, Florida or the southern Californian coast would be the ideal timeshare location in the winter or Colorado would be ideal in the summer. In conclusion, the philosophy that a thorough market survey complimented by intensive research is an ideal approach to obtaining a cheap alternative should never be ruled out.
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