Owning a Timeshare can be a great investment for your family, but there are quite a few reasons to be wary. While timeshares do offer home-like accommodations and exchange options, there are quite a few cons to consider:

CONS

Potential Scams – Unfortunately not many consumers have done enough research on timeshares and there can be some less-than-ethical players in the industry that prey on those people. Timeshare sales have been notoriously associated with sneaky sales pitches and bait and switch tactics. Luckily the American Resort Development Association has set more ethical standards for the industry, but it’s still important to do thorough research before buying.

No Appreciation – Timeshares, unlike most real estate, do not appreciate, meaning they should not be considered a “money making investment.” That being said, it’s important to understand that nearly half of the price you paid for your timeshare actually went towards their marketing costs to sell it to you—in the form of the salesperson’s commission, phone calls and mailers. A better way to look at a timeshare is similar to a car, which isn’t necessarily an investment, but it may depreciate in the future.

Pre-Paying – When you pre-pay for a timeshare you’re tying up your money that could be spent on a number of other investments. Not only is a timeshare a big chunk of money upfront for a long-term value, but you are contractually obligated to pay maintenance fees for as long as you own it. Another con is if you’ve used financing to purchase your timeshare, you will be paying interest as well.

Resale – Reselling your timeshare can become a problem, especially in a slow economy. If you get good use out of your timeshare and are not strained by the maintenance fees, it’s worth holding onto. As if reselling your timeshare weren’t hard enough on its own, some developers include clauses into your contract that may restrict your ability to sell without paying commissions or extra fees.

Maintenance – One of the biggest cons for most buyers are the maintenance fees associated with the timeshare. Some of these fees go towards on-site management, landscaping, keeping the facilities manage. Fees depend heavily on the size, location and amenities and can vary greatly. Maintenance fees are not fixed and have been known to fluctuate up to 4% a year.

For more information on all things real estate, or two look at our homes for sale in Denver CO, please contact us at PorchLight Real Estate Group.

About PorchLight Real Estate: PorchLight Real Estate Group has the most experienced and knowledgeable Denver real estate agents in Colorado. For more information about homes for sale in Denver CO or specific neighborhood homes please visit www.porchlightgroup.com.

Advertisements