To Invest Or Not To Invest: Timeshares

14 Apr To Invest Or Not To Invest: Timeshares

Whether to invest or not to invest your hard earned money into a timeshare is entirely your choice. Before making that all important decision though, it is worth understanding exactly what a timeshare is – and what a timeshare isn’t.

A Timeshare is Not a Financial Investment

Perhaps one of the biggest misnomers in any industry operating today is the term ‘timeshare investment’. Whilst many of those snapping up timeshares back in the 60’s, 70’s and even (to really push it) the 80’s did so believing that their timeshare could or would make them money upon resale, this is one of those gambles that has unequivocally not paid off for the overwhelming majority. In fact, in 2016 a timeshare can prove more expensive to sell than to buy.

To Invest Or Not To Invest: Timeshares

Whilst changing taste, fashions and holidaying habits are partly responsible for the dwindling interest in timeshares and so their worth in monetary terms, the fact that the industry has been so besmirched by scams and fraud have too caused the worth of timeshares to plummet to such a depth that it is not just unlikely, but highly improbably that timeshares will ever garner the majority of their existing owners any financial reward.  Couple these factors with the fact that in 2016 package holidays, budget airlines and last minute hotel deals are all readily available and affordable, and it is easy to see why timesharing is so unpopular these days.

To debunk more of the confusing jargon and terms used in, by and surrounding timeshares, the TESS (Timeshare Exit & Support Services) rather handily features a comprehensive jargon buster glossary of timeshare terms. For anyone familiar with the terms compiled in it, arguably, the only wonder relating to timeshare investments in 2016 is why they are still being referred to as an investment at all.

Owning a Timeshare vs. Owning Property

Another misconception still commonly held by many is that to purchase a timeshare is in some way to invest one’s money into property. To burst the bubble, timeshare owners rarely if ever own any stake in the property which they ‘timeshare’. Rather, timeshare purchasers pay for a stake of the lease attached to a property they are then permitted to use for a fixed amount of time during a fixed period of every year.

The terms of a timeshare contract can vary and with it so too can the nature, location of the property being ‘timeshared’ as well as the duration and times at which the property can be used. Whether owners are able to rent out their timeshare to recoup any losses otherwise made by not using it will also be contained in their contract. What rarely if ever changes is the fact that they do not own any property through forking out for a timeshare.

Hence, a viable alternative to purchasing a timeshare whilst enjoying the benefits that a timeshare can provide is to consider investing in the purchase of a holiday home. To compare the value of purchasing a holiday home against those of potentially buying into a timeshare, you might want to begin by reading the Huffington Post article: ‘Vacation Home Purchase vs. Timeshare Ownership’ written by founder and CEO of Vacation Home Rentals, Tom Gilmore for some expert insight.

Hidden Costs and Annual Fees

Yet another of the realities involved in purchasing a timeshare are the annual fees usually affixed to a timeshare ‘investment’. In this regard it could be argued that a timeshare is indeed an investment, as owners are almost always legally bound to ‘invest’ additional sums of their own money ever single year into the upkeep and related costs of maintaining the property.

Unfortunately this is one investment timeshare owners are almost always not pleased to learn about, or fork out for as these fees can not only ensure timeshare owners stand to make no financial return long term on their ‘timeshare investment’; because the fees are to be paid every year this means that the longer a person owns a timeshare the more they will financially pay. As if that isn’t a sting enough, because the property exists whether or not you choose or are able to use it the fees are paid whether you use your timeshare or not and as such are one of the major reasons why timeshares are today so cheap to buy; when compared against the average cost of a budget package holiday available in 2016 quite frankly, the numbers all too often just do not add up.

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