Cons of Timeshares
A timeshare is a type of property ownership that affords the owner the right to use the property for a certain amount of time every year. Located primarily at resort-style condominiums and hotels, timeshares have become an increasingly popular with vacation travelers. Timeshare salespeople will sell you on the overall value of a timeshare investment. However, there are several cons to timeshare ownership that you should consider before buying a timeshare unit.
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Cost
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Timeshare salespeople will justify a timeshare as a great investment because you are paying for tomorrow's vacation in today's dollars. While this statement is factually correct, you also need to consider the ongoing expenses of timeshare ownership. Most timeshares require you to pay an annual or monthly maintenance fee and annual property taxes. Depending on the timeshare property, these taxes and fees can add up to thousands of dollars per year.
Exchange Programs
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Most timeshares allow you to trade your week or weeks for weeks at other affiliated timeshare properties around the world. Originally created to give timeshare owners flexibility, timeshare exchange programs typically assign a point value to your timeshare and allow you to use those points at other timeshare resorts for a small fee. While the exchange networks promise tens of thousands of exchange properties, exchanges are always subject to availability. Popular properties sell out a year or more in advance. Therefore, using your exchange points, at the time and place desired, is not necessarily an easy thing to do.
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Getting Out
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Timeshares usually don't appreciate like other types of investments. In fact, a large timeshare resale market exists typically selling used timeshares at 10 percent to 25 percent of their full retail value. Therefore, if you purchase a timeshare and later change your mind or need the cash you invested in the timeshare, you will have a difficult time recouping your investment.
Scams
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Many shady developers and promoters continue to associate with the timeshare industry. Most timeshares are sold in high-pressure situations and don't give you the opportunity to do your due diligence and read the fine print of the timeshare contract. If you purchase a timeshare without properly investigating the developer and the project's finances, you may end up with a timeshare project that is never finished or worse, goes bankrupt. Timeshares typically don't have to disclose the same types of financial information as other types of real estate investments.
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