Consumers can purchase a timeshare that gives them ownership rights to a piece of property. Timeshares are a similar concept to buying stock in a business. Timeshares have become increasingly popular in recent years. A couple million Americans own timeshares in vacation properties.
There used to be many crooks in the timeshare business. The industry has since become much more legitimate and there are more opportunities for consumers to get their money’s worth when buying a timeshare. However, there are still a number of scams that you will need to protect yourself from.
Make sure that you understand the statements that people tell you when they try to get you to buy timeshares. Timeshares may be appropriate for some people, but these salespeople will make it sound as if they are the perfect investment for everyone.
“They Are the Best Investment”
Many people trying to sell timeshares will tell you that they are great investments. They don’t tell you about all the expenses involved in marketing the product – which you will ultimately pay for. Timeshares may pay off for themselves if you actually use them. However, they are rarely a good investment. According to one expert, many time shares lose about a third of their value the moment you buy them.
Many people selling timeshares will also tell you that you can make a bundle of money renting them out to other people. Those claims are usually exaggerated.
“You can make a Bundle Renting Them Out”
You can certainly make money renting timeshares out, but your net income is usually fairly modest at best. You will need to pay an agency to help you find tenants and coordinate transactions with you. Most of these agencies require you to pay them a fee upfront for any services. There may be just over a 50% chance that the agency will find interested parties who will pay more than what you need to cover your expenses.
“You Will Save Tons of Money Using Them”
The people selling the timeshare may also tell you that you will save a considerable amount of money buying a timeshare instead of renting a hotel. This is a very misleading statement. They neglect to factor in maintenance expenses and other costs of owning a timeshare.
You will also need to make sure that you are going to be able to make it to your timeshare each year to get your money’s worth. You are paying for the timeshare long beforehand and are typically only going to be able to use the property for a specific week each year. You would need to make sure that you could guarantee that you could go on vacation and use your timeshare during that specific time to make sure that you get your money’s worth.
There are a lot of misleading claims made by people in the timeshare business. A timeshare may be a worthwhile investment, but you are going to need to make sure you look at the facts objectively. Don’t buy one based on a flashy presentation by a salesperson.
About the Author:
Kalen is a business and financial advisor. He traveled to Connecticut for one of his recent conferences with his BNI Group, where he stayed at Quality Inn Hotel & Suites in Danbury Connecticut.
Owners should also be aware of the crooks/scams they might face when attempting to sell their timeshare in the future. If you have a timeshare you need to sell, the easiest way to avoid getting scammed is to NEVER pay an upfront fee of more than $100! Instead, work with a licensed real estate broker who won’t charge you until your property is sold.