9 Timeshares Myths Exposed
It is expensive to buy a timeshare
Not true
Attending showy presentations at timeshare resorts and financing at a high interest rate over 5, 7 or 10 years can be very expensive. There is another option. Buy resale. You save money, have a greater selection and have the opportunity to do your research on your own instead of touring a resort and dealing with a “Buy here, Buy now” attitude.
Timeshares are real estate
Yes
Timeshare property generally comes in two flavors - Deeded and Non-Deeded / Right-To-Use. Deeded properties are deeded in perpetuity and may be bequeathed to heirs. Right-To-Use ownership allows the owner usage of a unit or units over a lengthy period of time, typically 30-yrs or longer.
Timeshares go up in value
Only in certain geographic locations where ALL Real Estate is in short-supply
Resorts want you to see all timeshare properties as real estate. In most cases you are issued a deed and deeded property typically goes up in value. Some resorts may play into this assumption during their presentations to add value to the product. Timeshare is best considered an investment into your well-being and future vacations, not a financial investment.
Timeshares hold their value
Not typically
Everyone pays a different price at the resort and everyone sells for a different reason, so the resale market is varied. A person that bought many years ago surely paid less than someone who bought just last year. If both parties try to resell, the owner who has owned longer would typically be willing to sell for less as his unit is most likely paid-in-full or close to it. To be competitive, newer owners may have to consider selling at a loss. The best way to maximize a timeshare’s value is to use it.
I can resell back to the resort
Rarely
Some resorts have something called Right of First Refusal in their contracts. Basically, this clause states that if an owner has a contract to sell, the resort has the option to either match the price offered or allow the sale to take place. Most resorts have no interest in owning additional inventory, especially since owners are already paying maintenance fees. This right is typically not exercised.
I got a great deal
Only if you bought resale!
Everyone buys at a different price. When you’re at the resort, the price is always negotiable, and the more you haggle the better price you get. No one buys at “bad price”. Owners typically buy at a price they feel comfortable with. However, the best value can always be found on the resale market.
If I stop paying, the resort will take it back
By foreclosing on the property
If you stop paying on a timeshare loan, the resort will typically hand you over to a collections agency or begin the foreclosure process and eventually reclaim the deed.
I can give my timeshare away
If it’s paid-in-full
If the property is owned free and clear, you may be able to donate it to a charitable organization. You can also give it to a family member or friend. Normally you will incur some costs to transfer the deed. The best option is to advertise your property for sale or rent on the resale market.
I can refinance my high interest timeshare loan
On a personal credit card or loan, only
Banks don’t loan money for timeshare. From a bank’s standpoint, if you were to default on a loan on a timeshare, what would they reposes? They cannot take the unit or building because the resort, not you, owns them. Although you own a deed, it is only deeded interest in the resort.
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