Currently, along with the economic downturn, there are more and more owners who are trying to get out of their timeshares. For some, owning a timeshare could mean a financial drain. In this article, we will tackle some important facts about timeshares and why it is not considered an investment.
First, consider the time value of money. With timeshare ownership, you will be charged an upfront fee for something you are planning to use in the future. Once you use your money to buy a timeshare, you also forego the opportunity to use that money somewhere else that can be more profitable at the moment.
Next, you have to expect maintenance fees. Every year, regardless of whether or not you actually use your week, you have to pay a fee. And usually, the maintenance fee increases every year. You also have to be aware of the deprecating value of the timeshare. Once you purchase it, it loses 40 to 75 percent of its value.
With regards to renting, you can often rent the timeshare week of someone else for less than the amount they are paying for the maintenance fees. You can also exchange your timeshare unit to another one. However, it will cost you some amount of money. In addition, your exchange value diminishes over time.
Timeshares can be a lifestyle expense, not an investment. If they are purchased in the right way and for the right reasons, it can be worth it. But any interested buyer who is not aware of the above-mentioned facts is more likely to become a dissatisfied owner and later on have problems getting rid of his/her timeshare. Bear in mind that some owners even hire a timeshare transfer company like the Transfer Smart just to get rid of their timeshares. So, it’s better to be aware of those important facts before buying one.