I think, therefore I transfer.

Tuesday, May 18, 2010

Transfer Smart Outlook: Are Timeshare Bargains Really Bargains?

Historically, timeshares, where owners are deeded a small portion of a resort property used for vacationing are considered lousy purchase. Just like a new car, they lose value when you drive it off the lot. You also have to pay upfront for future use. Moreover, you have to pay maintenance fees and your exchange value diminishes as the fickle public wants to stay in newer and newer resorts. For these reasons, many owners want to get out of their timeshares. But according to American Resort Development Association, there are still 4.5 million households who have bought one or more weeks in one of the top 1,600 timeshare resorts.

Nowadays, people are practically being paid to take a timeshare week off someone's hands. Just look on eBay and you'll find auctions on timeshares for $1. But as much as those deals look like absolute steals, that doesn't mean that now is the perfect time to buy a timeshare. In fact, if a timeshare didn't make sense as an investment before the real estate market flat-lined, it is still the same now.

The truth is, people have been walking away from timeshares since the point that they got home from one of those high-pressure sales pitches. That's in part because of how timeshares are marketed and sold. If the only way you can afford to take that Maui helicopter ride is to listen to a timeshare presentation, the chances are you have no business buying your lifetime vacation week. Timeshares are also sold by volume. According to industry experts, for every 100 people in the room, 10 sales are closed.

So, with the previous economic meltdown that we experienced for the previous two years, more people than ever before are trying to get rid of their timeshares and that is not exactly a huge surprise. Consequently, the units available in the market are getting cheaper and cheaper. Now, the question is, does that make those timeshares any better an investment? No, it doesn't. Although it may make them a slightly cheaper bad investment, if that's what you want.

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