Tuesday, November 02, 2010

5 Reasons Not to Buy a Timeshare

There are over 5 million timeshare owners world-wide, and the most recent survey had 85.6% agreeing that timeshare ownership was a positive experience. But maybe you shouldn't buy a timeshare. Here are 5 reasons not to buy a timeshare:
  1. Looking for an Investment
    A timeshare is not a real estate investment. This can be confusing for some people. Legally a timeshare can be considered deeded real estate, you have to pay property tax on it, and in many states timeshares are regulated through the real estate commissioner's office. However, a timeshare does not act like real estate. You don't own a piece of property, but rather you're buying a share of some time to use some property. Think of purchasing a timeshare more like purchasing a car - it can be listed in your will, it's very handy to have, and it will depreciate in monetary value.

  2. You don't take Vacations
    The entire point of owning a timeshare is to make vacationing easy on a routine basis. If you know you'll be taking a week's vacation every October, and like visiting Maui, then buying a timeshare on Maui for that week will allow you to have a pre-planned vacation every year. However, if you're not someone who vacations on a regular basis, then a timeshare won't work for you.

  3. Unpredictable Vacation Time
    Maybe you do take a vacation every year, but you never know when or how long it will be. Many timeshares restrict you to a particular week of the year, and if you don't know when you'll have time off then, don't buy a timeshare. However, there are ways to make your timeshare flexible. Exchanging your timeshare week is an option, as is purchasing through a vacation club that works on points rather than calendars.

  4. Ties up Cash Flow
    There's no getting around the fact that paying an up-front fee on a future vacation limits your cash flow in the present. If you take out a loan you'll have interest to pay, and every timeshare purchase also includes monthly maintenance fees, all of which contribute to the amount of cash that is tied up each month.

  5. Scams
    Disreputable companies and timeshare sellers are no doubt a part of the timeshare world. If you don't keep your eyes wide open, do your research, and deal only with businesses that have a reputation for honesty (always check with the Better Business Bureau, or the consumer affairs office your state) you'll have a negative experience with your timeshare purchase.
If you are wondering if a timeshare purchase is right for you, take a vacation with a timeshare rental first. You'll learn a lot that can help in your decision, one way or the other.

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