The part of property shared among the number of owners is called as a timeshare. This involves use and cost of preserving the property. Although the most of the timeshare properties are condominiums resorts but it will not be a surprise if you find a hotel or a motor home or a cruise timeshare or a campground. The selections are increasing day by day.
The scheme of a timeshare property originated in Europe in 1960s when the property rates were skyrocketing and it was impossible for people to meet the expense of a full time vacation house. But by sharing the ownership burden of maintenance and other costs on single person were greatly reduced.
These also boosted up the fate of real estate developers as they were able to market successfully and sell the properties to a greater number of people. But a key point to remember in timeshare properties that it is owned by a number of people who have no relation to one another like a standard home ownership.
Timeshare properties are more often found in warm destinations like Florida where people like to vacation a lot. They can also be found in cold weather areas near ski resorts. The timeshare properties are typically furnished luxury and usually have one to three bedrooms, multiple bathrooms, a kitchen and a living room. It won't come as a surprise if you want timeshare properties with indoor or outdoor pools.
The typical period of a timeshare ownership unit is one week. Depending on what time of the year you own it. For example, a timeshare property in the month of April in Florida will be much higher than in August. So the rates may differ with different seasons and demand. Some resorts give color coding to different seasons depending on the demand. For example some resorts term high demand as red season meaning the prices of the timeshare will be highest in that season.This offers not only a great vacation but also great investment. Most people rent their timeshare to others when they do not use their timeshare. This has a dual benefit. You earn rent all along with appreciation of the property with course of time. Timeshare properties are exchangeable and tradable with other properties in most of the cases.
Every time many people lock in into the frauds and scams, this has become main reason of the timeshare investments. So, it is always good to know their legal rights when buying a timeshare.
It is good to practice or know your rights when you are signing any contract or agreement. Like any other businesses, timeshare business is also prone to unprincipled tactics by some people. Everyday you hear a story of somebody being scammed to buy it and the property doesn’t even exist.
In some other cases, is not up to the standard and what they were promised. We here these horror stories and we should gain knowledge of from these.
Here are some points that you should keep in mind while buying a timeshare:
Before understanding the rights let us take a look on different types of timeshare plans first. They are basically of two types. A deeded or title timeshare and the second one are right to use also as called license to use timeshares.
A deeded and title means the buyer owns and obtains a specific facility for a particular length of time each year or for a specified number of years (usually 40 years) with the deeds.
A right to use timeshare means the buyer has the right to acquire all the above mentioned things except the deed i.e. title. A deeded is renewable whereas a right to use timeshare is like a lease which expires after specified number of years.
This industry has also acquired the status of used car industry in terms of selling strategies used. It begins off with a tempting you by offering an expensive gift. When you actually go there it turns out to be a pressure selling session of a used car dealer who doesn’t want you to go out unless you sign a paper. And the expensive gift also turns out to be a mere gimmick.
And the people have to go all the way through the shock of sitting through the presentation which runs for two hours also sometimes, full of force selling tactics. But as per the law the people are supposed to be informed about the length of the time they have to sit before receiving a free gift. Also they must be clued-up about the physical condition of the facilities.
These companies are also legally not allowed to fake the market value of the timeshare property. They are also not supposed to misguide you about the resale or exchange potential of the property.
The law also prohibits these companies without including the oral promises that were made before the purchase of the property in the written agreement and also counting any kind of fees that were never ever mentioned orally. The rules may differ from state to state. Some states also have a cool-off period of two weeks to allow or cancel your contract.
Apart from these rights one should also judge things that you really want to buy the timeshare? Did u check out the facility? Did you contact the better business bureau? Did you talk to existing owners in the timeshare property? Do you plan to rent it? Do you plan on reselling it? Do you plan on exchanging vacation sites frequently? The answers of all these questions should be found out before making a final decision about buying a timeshare.
Everyone and everything in life has pros and cons. whereas pros may be essential to some of them and cons to some. It depends on how you estimate the benefits of buying a timeshare with your lifestyle and financial condition.
For some, it may be a miniscule portion of their wealth but for some it can be hard earned savings of their life. In either case, a smart person will always look into pros and cons before investing his/her money.
Firstly, let us converse about the pros. Beginning with, timeshare properties they are more reasonable compared to buying a piece of real estate property for life and only using it once a year. Evaluate this with buying a property for lifetime for $200,000 with timeshare which may be only $10,000 plus annual maintenance cost of $500 for the life. If we assume the lifetime period of 30 years the calculation will be as follows:
$10,000+30 years x 500 = $25,000 for the lifetime
Compare it with buying a real estate property for lifetime you will save $175,000. Isn’t that a lot of money? Is it wise to invest that much extra money for once a year use?
Let us compare this with the cost of Hotel. Suppose if you spend $1,200 every year on a hotel, let us consider the cost for 30 years:
$1,200 x 30 years = $36,000 which is still more than $25,000 you pay for timeshare for the lifetime.
Apart from saving money you get the comfort of your home. In a hotel you might get only one suite. But a typical timeshare condo has two or three bedrooms, one or two bathrooms, a kitchen, a dining room and even a laundry room. Also timeshare units are generally fully furnished. Most of the timeshare properties have an indoor or outdoor pool also these days. In addition to that you also get resort facilities. What more somebody might want when they get all these facilities and comfort of home?
If you have a timeshare you don’t have to worry about the upkeep and maintenance of the condo. It is taken care of by the developer. Now compare this with buying a real estate property for the life, you have to do all the maintenance.
About the Cons of timeshare, it has become an avenue for many scammers and frauds. The timeshare business has been overwhelmed with variety of scam and fraud related problems. People are invited to attend a ninety minute presentation completely free and then they are subjected to the techniques of pressurized buying which is dishonorable in sense. Do not fall prey to these tricks. Always read the documents carefully specially the fine prints before signing any agreements. Research the timeshare company well and know their reputation.
By paying a huge upfront fee your money is tied up for a long time which means you are losing money’s worth in addition to paying interest if you have taken a loan for the rest of the amount. One of the major cons is the appreciation. The timeshares don’t appreciate much. They may be stagnant or even depreciate with time.
And last but not the least; timeshares may not be flexible enough for you to use it every year at a specific time. Although some companies offer flexible timeshares but it is only on first come first serve basis many other timeshare owners might also be planning to do that.
