Investing in Timeshare: Weighing Advantages vs. Disadvantages

In recent years, timeshares have gained popularity as a luxury vacation destination. From the time of its inception during the 60's, timeshares have attracted a steady stream of tourists seeking a viable alternative to the usual hotel accommodations in their vacation spots. A timeshare is essentially a piece of property, usually a vacation home, whose ownership is shared by a large group of people. Nowadays, timeshares are commonly units in condominiums or luxury resorts. Owners of the same timeshare allocate the use of the unit among themselves on a per week basis.

Advantages

Back when timeshares did not exist, regular vacationers had to actually buy units to stay in while on vacation for a few days or weeks. For the most part of the year, these already bought units remain unoccupied and unused. It wasn't long after, when the concept of timeshare became popular, that consumers began to see the practicality in paying in proportion to their actual usage. Not only did this scheme save owners a lot of money, it presented other benefits as well. Timeshares allowed for a worry-free and hassle free security and maintenance arrangements. Consumers no longer had to go to their property to supervise necessary repairs or be concerned about the security of their unit. Timeshare companies take care of these for you by making decisions for you in the upkeep of your unit.

One other good thing that comes from owning a timeshare is the certainty of always having a place to get away to whenever you go on vacation every year. When you buy into a timeshare, you will be signing a contract that requires you to use it once, at a minimum, in every year. Depending on the type of ownership, the weeks allotted for your occupancy can be fixed or scheduled. Thus, owners most certainly have a range of dates to work their schedules around with, giving them plenty of time to plan ahead and get some time off their work. On the other hand, people who look at timeshare as an investment prospect, always have the option of renting it out on their specified weeks instead.

Disadvantages

Most timeshare owners bemoan the high cost of maintenance. On the average, maintenance fees can easily rise to a hefty 4 percent annually. Consumers lured into owning timeshare because of the promise of hassle free security and maintenance, often find themselves paying dearly for those very benefits. Add that to the special assessment fees and we are easily talking about a large sum.

In addition to the high maintenance fees, another drawback in timeshare ownership lies in the relatively inflexible scheduling potential. In theory, dividing usage of the property into weeks among the owners should readily work. However, it is almost certain that vacationers aim to go on vacation around the same period during peak seasons each year, thus, making it less likely to have another owner give up his schedule for you around that season.

Lastly, consumers looking to sell their timeshare will have a hard time finding buyers. With the current market conditions and the slump in the economy, timeshare owners rushing to sell their property would be extremely fortunate to find buyers willing to buy their timeshare for even a small fraction of its original cost.


Investing in timeshare is no less serious than making a decision in buying real estate. Hence, it warrants a serious and thorough consideration on the part of the investor. This way, timeshare owners will be able to make well-informed choices that make the most out of their investment.

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