The first American timeshare began in Hawaii in 1969. Nowadays, timeshare revenue has surpassed $9.6 billion.
But is buying a timeshare the right move for you? Read on for the top 5 things you must know before you make this decision.
1. The Kind of Usage System
There are four common types of usage system in timeshares. It’s important to know which you are getting into.
Fixed week systems give you access to the property for the exact same week each calendar year.
Floating week systems let you pick a different week every year.
Right-to-use systems let you rent a share of the property for x number of years. You also get to stay there for a certain amount of days based on the size of the share you buy.
In points club systems you buy points. You then redeem points for time in their timeshare properties. This often includes hotels.
Depending on how much flexibility you want, one of these systems might be best for your needs.
2. The Type of Contract
The next thing you must know is the type of contract available.
Deeded contracts mean that you own part of the property. You are able to use, rent, resell, or gift your portion as you see fit.
A non-deeded contract is akin to signing a lease. You’ll pay for the right to use the property for a set period of time, often for several years. At the end of the term, the ownership goes back to the owner.
It’s common for timeshare contracts to be deeded, but be sure to double-check before you sign.
3. How Much Will It Cost?
Here’s the big question on everyone’s mind when buying a timeshare.
You should be crystal clear on the costs involved before you commit. This means hidden fees, too.
A good idea is to take the overall cost and divide it by the number of years you expect to use the property. That gives you a yearly cost.
Then you’ll know if it is a good value for you.
4. It Isn’t a Real-Estate Investment
Many people mistakenly believe that a timeshare is a real estate investment. It is not.
Timeshares are not financial investments. They are great for investing in family or vacation time, but not the same as purchasing a commercial property.
Be very clear about your reasons for buying a timeshare before you start shopping.
5. Have an Exit Strategy
The final tip when buying a timeshare is to have a timeshare exit strategy.
As with many contracts, getting out of it can prove to be a challenge. Even if you have no plan to get out, be prepared by understanding how you could get out if you want to.
Sometimes, you can negotiate your way out of your timeshare. Other times, you will need to help of an attorney.
Just be sure you know these avenues just in case, before signing on the dotted line.
Be Wise When Buying a Timeshare
There you go! We hope these 5 tips on buying a timeshare allow you to make an informed decision.
Remember, even though a timeshare promises a great vacation, you want to make a smart and prudent decision.
Before you go, check out our other informative content for more interesting reads.