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(#1) It's Way Cheaper to Rent a Timeshare Than to Buy One
That pesky little thing called life can often interfere with you staying at your timeshare each year. Most timeshare owners try to rent out their space in order to gain back some of the money that they've paid. In most cases, if you rent a timeshare, you'll be paying the same amount it would cost to stay at a hotel for a week! And you won't have to worry about all the risks that come with owning a timeshare.
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(#2) If You Default on Your Timeshare, You Could Face Foreclosure
If you manage to take out a loan to pay for part of your timeshare, you can face foreclosure if you default on any of those payments. However, that's not all! If you default on any other timeshare financial obligations (taxes, maintenance fees, etc.), you can also face foreclosure. Not only will your credit score take a hit, you'll have difficulty securing a loan in the future.
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(#3) Timeshare Reps Use Tricky Wording to Convince You
Similar to used car salesmen, timeshare reps have a lot of tricks up their sleeves. Though nowadays they're discouraged from telling prospective buyers outright that timeshares are quality investments, they use subtle wording during their sales pitches to make you think that purchasing a timeshare is a good financial move. Using phrases like "life-quality investment" subconsciously tricks buyers into handing over their cash.
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(#4) Buying a Timeshare Comes with a Lot of Hidden Risks
When you buy a timeshare, you're technically purchasing a part of that building. That means, that if there's some natural disaster (earthquake, fire, etc.), you are fiscally responsible for rebuilding your unit. Despite the fact that most timeshares have some sort of insurance, there are some disasters that insurance cannot cover, leaving you to pick up the pieces.
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(#5) Trading Timeshares Isn't as Easy as the Reps Make It Out to Be
During a sales pitch with a timeshare rep, they'll make it sound like it will be a walk in the park to trade your timeshare unit with other properties around the world. However, it's actually a lot easier said than done; you usually have to pay extra fees to make a trade happen, and, more often than not, a trade isn't possible at all.
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(#6) The IRS Doesn't Care About Your Timeshare Losses
What a shocker, the IRS doesn't care about your bad business decisions! If you sell your timeshare at a loss (which most people do) the IRS will not let you claim a capital loss, as it would with other real estate investments.
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(#7) Travel Costs Aren't Factored in When Making Comparisons
When meeting with a timeshare rep, they'll usually try to sell you on how much of a "great deal" timeshares are by factoring in travel costs of your current vacation. However, the reps conveniently forget to include travel costs when calculating the cost of your future timeshare. Pay attention to their calculations, because you might think you're saving when you're not.
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(#8) If You Can't Pay for Your Timeshare in Full, It's Definitely Not Worth It
Because timeshares lose their value immediately upon purchase, most banks will refuse to provide you with a real estate loan. While they may provide you with a timeshare loan, their interest rates can reach the double digits and most often, are not tax-deductible. When you calculate the cost of financing to the overall cost of the timeshare, it's usually wiser to pay up front in cash, or not buy one at all.
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(#9) You Can Get Locked Into Vacationing at the Same Place Every Year
Some timeshare programs are part of a club, meaning that you can use different units throughout the world. However, if your program is not part of a club, you can very easily get locked into vacationing in the same place each year.
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(#10) The Salespeople Will Show You the Best Room During the Sales Pitch
While the sales reps may show you the best on a tour, they'll actually sell you the rest when you choose to buy! It's no coincidence that you toured the oceanfront villa, but ended up getting the unit that looks out on the parking lot. Make sure to look at a variety of rooms, or at least make it clear that you're willing to pay for what you've been shown.
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(#11) Be Sure to Optimize "Red Time"
In timeshare lingo, “red time” is the terminology used to designate high demand time. For instance, a place like Hawaii is "red" all year round because it's always in demand. While having a week in Hawaii in January will still be more valuable than having a week in North Dakota in July, you should try your best to acquire a timeshare during "red time." That way, you can trade your timeshare more easily!
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(#12) Don't Be Afraid to Negotiate
When it comes to dropping an insane amount of $$$ on a timeshare, you should definitely not be afraid to ask for some added perks! If a rep is trying to convince you to drop $20,000 a year, you should definitely try to negotiate that price down, or at least try to get some bonuses. After all, ask and you shall receive! Ask for a lower price and most reps will reward you.
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(#13) Life Can End Up Costing Your Timeshare
When timeshare reps calculate an offer for you, they operate under the assumption that you will be able to go on vacay at the same time of year for many years to come. When you end up actually crunching all the numbers, a timeshare's price can actually be more expensive when compared to a hotel! If you have to cancel your plans to travel to your timeshare, you're out all of your money rather than if you just had to pay a cancellation fee at a hotel.
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(#14) There Are a Lot of Unreliable Factors That Can Depreciate the Value of Your Timeshare
Believe it or not, the real estate market can actually turn owning a timeshare into a nightmare. While you may have had hopes of selling your timeshare at a profit, a million variables can depreciate the value of your timeshare. Whether it's the political landscape, weather, natural disasters, or what have you, you can never truly predict if your timeshare will be worth it in a couple years.
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About This Tool
Timeshare is one of the very common sales models in hotels or resorts. They sell the right to use a guest room or a tourist apartment to customers in a one-time membership system for a period of 10 to 40 years or even longer. Members get the right to stay in a hotel or resort for one week each year, and customers also enjoy a series of rights and interests such as the transfer, gift, and inheritance of time period rights.
Timeshare is a new business model that perfectly combines the real estate industry, hotel industry, and tourism industry. There are many types of timeshare hotels currently on the market, fully understand and choose the most suitable timeshare product will make it the value for money. It is a good time to know more information about timeshare here that the salesman would not tell you.
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