What is a timeshare & should I cancel it?
We recommend that Timeshares should effectively be a lifestyle choice and not an investment decision. Before you enter into an official timeshare engagement one should always take the time to research and be well informed of exactly what a timeshare concept is. In addition, always know the rights and limitations of the specific type you are considering.
What is a timeshare?
By definition, “A timeshare is an arrangement whereby several joint owners have the right to use a property as a vacation home under a time-sharing agreement.”
The agreements will differ but ultimately the timeshare owner will be given a certain time frame to have access to said vacation property and use it (mostly without any flexibility on time).
How do timeshares work?
Traditionally speaking when buying a timeshare, the owner has the right to use a vacation property for a set time per year. There is ways to extend the time period but typically it is 1-week allotments. There are two types of timeshare legal structures and they are share deeded or share leased.
Share deeded means that each respective owner is granted a portion of the property/deed based on the associated time purchased. Thus the owner is granted a deed for one week of the year shared amongst other deed owners and can only have access to the property for that week. For example, an owner who has one week will have to share their property with 52 other deed owners.
The other structure is share-leased property. This means that the developer will solely own the deed and the timeshare owners will lease their allotted share/interest in the property. Typically there are many restrictions for the owner with respect to selling or transferring the interest and can also have a term ending date.
In addition to the legal structure of the timeshare, there is also the type of ownership of the timeshare, which translates to how the owner is allowed to use the property.
The usage types are fixed week, floating week, or points system options.
Fixed week means that the owner only has access to the property for a specific week of the year, every year. They are restricted to that time and essentially have the right to that property for only that given time but due to the promised guarantees, many believe that this would be the best timeshare.
A floating week option is less rigid and allows the owner to use the property over a larger time period/season. The owner will have to reserve the property and is subject to availability. This means that there is no guarantee as they are competing with other floating-week-owners.
The point system option is similar to the floating week but their ability to stay at certain resorts depends on how many points they have purchased or accumulated. These points can be applied to reserving a property.
How much is a timeshare?
There are several things to consider with the cost of a timeshare. It will have an upfront cost and will then have an ongoing annual maintenance fee.
According to the American Resort Development Association (ARDA), the average cost of a timeshare interval is $22,000 and above and the average maintenance fee is $980 and above. The maintenance fees can escalate over the length of your timeshare ownership.
There is a difference between Timeshare purchased directly from Resort vs purchased on a resale marketplace. Respectively the timeshare purchased from the resort will be full price and more expensive. The resale of a timeshare can be relatively low, as much one dollar, this could benefit the purchaser but could harm the seller.
Also, note that owners will have to finance the purchase of the timeshare if they have the full amount. This will have additional high-interest rates since many banks will not finance timeshares.
Other associated/possible fees are transfer fees, recording fees, and assessment fees.
- Transfer fees are fees charged to the owner for transferring their timeshare to another respective owner.
- Recording fees are additional fees associated with the sale of a timeshare.
- Assessment fees can be the most damaging, as they are fees given to the owner after a natural disaster or if any extensive repairs are needed on the property. The owners have no warning and can add up to thousands of dollars.
Are timeshares worth it?
Timeshare may provide the idea of an ideal vacation offering but there are definite Pros and Cons.
The Pros:
Timeshares are for those who love the idea of owning a specific vacation property but do not want the high cost associated or the difficulty in managing it when you are not present.
There are people that enjoy a certain local and or have that specific time of year that appeals to them and they want to return to the familiar spot.
Depending on the type of timeshare and the contract, you may not have the hassle of reserving or figuring out your vacation every year.
There is also the possibility of trading properties or locations for a given time but still having the familiar comfort of your timeshare.
This may allow you to travel to a couple of different destinations through a property exchange program.
Also, just like owning your timeshare there is the possibility of lending your time to friends and family.
Although the above reasons may be convincing enough to move forward, there are cons of a timeshare as to why you should notparticipate.
The Cons:
Conversely to the above points, if you enjoy a variety in your vacation destinations and want to explore the world, a timeshare would not be for you. Also, note that you are limited to 1-2 week vacations.
Timeshares are not good financial/monetary investments!
It may seem as though you are saving money by effectively pre-purchasing your vacation, but that is simply not the case!
There are several ongoing fees to consider that will raise your expenses but decrease the value. These expenses are annual maintenance feesthat are constantly increasing. You also have the insecurity of a very large assessment fee that can be thrown your way at any time.
These fees are present whether you use the property or not and can be passed down in perpetuity to your children, thus locking you in for life!
If you do not have the money to outright purchase the timeshare, you may have to take out a mortgage at a high rate. With that comes the added interest that will cost you in the long run. Banks will not provide the funding, as they do not support the risk and devaluationof a timeshare so you will always have a third party financier at high interest rates.
Due to the abundance of inventory and possibly the contract you have entered into, selling a timeshare can be very challenging and if you do sell your “property” then it is always for an extremely decreased assessed value. Many owners will sell their timeshares for one dollarjust to try and escape the contract.
In addition, the floating timeshares seem like a great idea as you are not locked into a set time but more often than not you will not be able to reserve a property due to the competition.
Timeshare scams
Yes. Quiet a few timeshares are legitimate and are provided by large companies. The top companies are Wyndham Timeshares, Hilton Grand Vacation Club, Marriot Vacation Club, World Mark Timeshares, Disney Vacation Club, etc.
You may not agree that a timeshare is a good idea and these companies may not have your best interest in mind but never the less – should you decided to sign a contract always (!) use a reputable timeshare company.
The term “timeshare scam” can be associated with the hard sale and the false prize certain companies claim to associate with the purchase (e.g.: Free Hotel stays, attraction/activities, cash, etc.).
For pre-purchased timeshares, the financing may not go through in the end and the project or vacation property will never be built (!) even though you purchased your share.
With respect to maintenance, some timeshare companies will not take care of the property and will very poorly maintain it.
One of the biggest scams of all is the “timeshare resale scam”. Scammers will propose that they have a buyer for your perspective timeshare for sale and/or they guarantee that they can sell your contract.
All that is required is a down payment fee. This fee is paid by the timeshare owner trying to sell their “property” and they will never hearfrom the proposed sellers again.
Best timeshares & timeshare resorts
If you were to decide to purchase a timeshare.The best type of timeshare would be from one of the more reputable sellers. This would be the best way to avoid any of the above-mentioned scams. Again you may not agree that a timeshare is a good idea but if you do decide to make that choice then use the top companies mentioned above.
Our Strong piece of advise: Once a contract with a company is signed, you will most likely require legal assistance to cancel said contract. Easy Timeshare Relief specializes in getting you out of your timeshare.
Timeshare user groups
Due to all the different facts listed above, one should always be well informed before entering into such agreements. This is why user groups were developed such as TUG offer a fair bit of unbiased source advice for timeshares and their respective owners. They will educate you on the concept as well as provide you with specific information on a potential contract or property you are looking into.
This is why the best decision is a well-informed decision.
