Timeshares 101: Is It Practical To Have One?
You might have dreamed of owning your dream property by the beach where the sun, sand and sea meet each other. With timeshare arrangements, these dreams are getting closer to reality than ever for the average person. However, a timeshare arrangement might not be for everyone. Here are some things you should know about it.
What Is A Timeshare?
Timeshare is sold as an investment, but it is is based on the concept of fractional ownership in a certain property. Instead of getting land for your own, you are given the exclusive use of it for a certain time being, depending on your agreement.
For example, if you purchase one month of timeshare in a condominium unit for each year, this means you own 1/12 of the unit. Other buyers will purchase the remaining fractions that are then available. Due to its advantages, this kind of arrangement has been gaining popularity recently.
Kinds of Timeshares
A fixed week timeshare is where a buyer usually owns the rights to a specific unit in the same week regardless of what year it is, for as long as the contract is in effect. There is predictability in this kind of arrangement and it is also a little flexible and there is that potential for long range boredom.
A floating timeshare is where a buyer can reserve his own time at a given period in a year. This has more freedom than the fixed week arrangement, but it can be difficult when other owners get up the better periods. A Rights to Use timeshare agreement is where the buyer leases the property for a certain amount of time annually for a certain amount of years. The developer, however, still owns the property. There is also a Point Club arrangement wherein it works similarly to the floating type, but buyers can stay at different locales depending on the points that they have accumulated.
Some Words of Caution
Owning a condominium by the beach during the summer time for a cost than you actually owning the unit sounds like a really romantic idea, but do keep in mind that timeshare salespeople want to sell as much as they can. It will be easy to give in into the sales pitch because these people will keep telling you that you are in for a great deal. However, this is not really true all of the time.
Before you even think of actually purchasing a timeshare, do take some time to research and talk to other timeshare owners. Do not rush into making a decision and do not give in to how these salespeople pressure you.
When you buy your own vacation home, you just use it for one season a year at most. In a timeshare agreement, you only pay for what you use. This arrangement is more affordable if that’s what you intend to do with the property. Of course, this also means that you are guaranteed a vacation destination as long as your contract subsists.
If you are into traveling to other parts of the world, this arrangement could also be ideal for you since you can trade times and locations with other timeshare owners. You can also rent out your block if your schedule does not allow you to use it.
Cons of Owning a Timeshare
Maintenance is more manageable in a timeshare agreement, but you really do not have any control over the annual fees and how much they can increase annually. On average, the annual maintenance fee for a timeshare could set you back for $660. This means that you pay that amount whether or not you use that property. What is even worse is that if you do not pay this amount, your timeshare can be foreclosed.
Timeshares are not really that popular yet and they can be hard to sell. Those that are used are also typically sold with great reductions from their original value because there are a lot of new properties in the market offering the same arrangement.
While the idea of having a condominium unit to yourself at your favorite season is ideal, it is more important to know the pros and cons of what you are getting into. Do you know of any other details that should be fleshed out about timeshares? Share with us your thoughts and knowledge in the comments below.
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