As many people plan their vacations, they will inevitably run into a friend, co-worker, or acquaintance who owns a timeshare. Additionally, vacationers who visit destinations like Orlando or Myrtle Beach will be bombarded with companies looking to make them a “no hassle” presentation about timeshares. Before you take the plunge into vacation ownership, consider the following advice about timeshares and timeshare presentation.
Timeshare Financing
For starters, the interest rates offered when purchasing a time share are outrageous. Companies use the excuse of having to provide financing to all customers to get away with charging you rates of 15-20%. This would be equivalent to purchasing a timeshare on a credit card and then making low monthly payments. Timeshare loans can easily be obtained from a local bank in the range of 7-10%. Also, consider a home equity loan to make the rate even lower.
Never EVER Buy the day of the Presentation
Timeshare sells people will tell you that all of their benefits are only available on the day of the presentation. Surprisingly, this is NOT true. The trick lies in the fact that they typically connect incentives to the deed. They may offer things like free yearly golf passes with a purchase. In order to make these benefits transferable, they have to write them in your deed. This means that if a timeshare is bought from someone with those amenities in the deed, they are automatically transferred over to the next owner.
Timeshare Resell Values are Terrible
The last incentive they will throw in to try to make the sell is a reduced purchase price. This is the biggest trick of all because timeshares have horrible resale value. Even if you buy a timeshare at a 20% discount off of their “retail value,” your resale value of the timeshare will be at most 50% of what you pay. Consider the flip side of that equation. If the resale value is 50% of what you pay, that means you can probably find the same exact offer from the same exact property for sale at a 50% discount from people who are trying to get out of their timeshare. Google timeshare resells before you go to a presentation and compare prices. It’s truly amazing.
The Best Way to Purchase a Timeshare
For those who consider purchasing a timeshare, the best thing to do is to attend as many presentations as possible. Not only will this be an informative process, but you can probably pick up some nice gifts and a good bit of cash. Ask key questions like: How often does the maintenance fees increase, how often does the property do a special assessment and how much, are their partnerships with other resorts and how do they work, etc. Don't just take their word for it, talk to some current owners about their experience. Once you really love a property, go home and look for that property at one of the many timeshare resells websites. If you don’t feel comfortable, get an agent who specializes in timeshares and identify the property and the time you want. Finally, secure a loan with your local bank that feels right to you. Rates will be higher on timeshares because of their poor resell value. Then have a happy yearly vacation.
