Hot Tip Of The Week

Why would you? (Buy a timeshare that is)

Usually a small investor is away on holiday somewhere and it's a bright sunny day and to kill some time he finds himself walking into a timeshare building and by some mysterious chemistry he finds himself having this vision of owning the suite that is being shown. That investor should at that point run for the hills as fast as he can.

Time-share units bought on holidays are not an investment. They are almost always a self-inflicted financial wound. To begin with they are not real estate. You own that investment with 51 other investors and you have to ask yourself this question. "What happens if I own the week of July 1 - 7 and I want to show it to a prospective purchaser in December?" It's going to be very difficult for you to do this when someone else owns that time segment.

An estimated 94% of all timeshare owners never intended to buy in the first place; they are swept away by high pressure sales pitches and cleverly disguised promotions.

The promotion may offer a new camera, a half-price parasail ride, a free day's rental car, a free gourmet meal -- you name it; timeshare sellers offer it. (Particularly in Mexico, Hawaii and in other more exotic places.)

In the usual case, the catch for the gift is that you must sit through a presentation about a timeshare vacation property. The presentations vary, but most include high-pressure sales pitches that drone on for hours and leave visitors desperate to get out. Timeshare salespeople frequently go over the advertised time allotted for their presentation and are not responsive if you complain.

Of course…the idea behind a timeshare is simple: for a one-time price plus an annual maintenance fee, you can buy the right to use a given vacation property for a certain amount of time (typically one week) each year. What you may not be told is the extent to which the annual maintenance fee will increase over time. For example, one timeshare owner in Hawaii saw her annual maintenance fees climb 76% in six years. Timeshare operators also may force owners to pay unexpected special assessment fees, sometimes as high as $1,000. (In Mexico reports of up to $3,000 per year!) While a timeshare has the potential to be a satisfactory arrangement, it often yields a variety of pitfalls and frustrations for the unwary purchaser.

For the vast majority of people, timeshare resort units are a huge waste of money. Here are 8 things that the timeshare sales rep won’t tell you, but you really should know before you consider buying one:

1. Time Shares Are a Lousy Investment

2. You Can Get the Same Time Share for Half the Price

3. You Lose 50% or More When You Sell

4. It’s Cheaper to Rent a Time Share

5. Time Shares Come With Multiple Hidden Risks

6. Miss One Year and You’re Better Off Without a Time Share

7. Travel Is Not Calculated When Comparisons Are Made

8. Hotel Prices Are Increasing (But So Are Time Share Fees)

You really need to be careful with these because they will suck your savings dry if you purchase on the image (what the timeshare sales reps sell) and not the financials of the deal. To this day, it’s still the issue I get the most emails about - people stuck with timeshares that they don’t want because the maintenance fees are killing their finances, but they aren’t even able to give the timeshare away (known as the Timeshare Trap - the timeshare resorts won’t take it back even for free because they want your yearly maintenance fees).

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