Up until the economic crisis, timeshares had been gaining in popularity.
The industry had an all-time sales record of over $10.
6 billion in 2007, and currently over 4.
8 million households in the US owned one or more timeshare units (or equivalents).
Yet as those numbers increased, the number of timeshare owners that wanted out of their timeshares also rose.
Looking back, these owners wished to impart some advice as to why they should not have purchased their timeshares.
Here are five of the top reasons.
1.
Prepaying For Vacations When you purchase a timeshare from a developer, you pay an upfront cost which averaged $19,000+ in 2007.
The salesperson would like for you to think of the cost as saving money over the number of years that you are going to use the timeshare.
However, few are able to use their timeshares enough to warrant the initial cost.
Furthermore, the money spent could have been used for savings, necessities, and/or true investments with expected returns.
Timeshare rentals or traditional hotel lodging on a year-to-year basis would most likely be a much more cost-effective way to spend your vacationing dollar.
2.
Pain in Scheduling Too often, timeshare owners must book their timeshare well in advance, sometimes up to 2 years before their planned visit.
The resort has little financial incentive to accommodate owners because the owners are already contractually obligated to pay their maintenance fees as well as special assessments.
More revenue can be generated by bringing in more prospective buyers and selling them more timeshare intervals.
3.
Long-Term Contracts Many of the timeshare contracts require a long term commitment from the timeshare owner.
Good marketing departments spin this fact as a long term commitment by the resort, while the resorts are only obligated to provide a certain level of lodging services when requested.
The long-term contracts guarantee that the timeshare resorts receive an annual revenue stream for decades perhaps lifetimes.
Yet, the continuous financial liability lies squarely on the timeshare owners during the same period.
If they do not pay, the timeshare can place a lien on real property and even a default judgment ordering payment of past-due fees with penalties.
4.
The Fees A common marketing technique in timeshare presentations is to examine the rising cost of hotels due to inflation.
The comparison with a timeshare and a low weekly cost in the form of an annual maintenance fee seems like quite a bargain.
What is not thoroughly considered is the fact that maintenance fees rise over time as well.
Resorts can also issue special assessment fees whenever any type of "special circumstances" arise.
Thousands of dollars can be spent on special assessments alone.
5.
Huge Number of Resales The number of timeshare owners who feel the proverbial albatross around their necks is rising.
The disillusionment has caused a glut of timeshares on the resale market.
The competition and the lack of informed buyers has caused plummeting sales prices.
Many timeshares go completely unsold with the owners quietly bearing the on-going burden to pay the associated fees.
Friends don't let friends buy timeshares.
Learn from those that have gone through the process yet are lost among the din of timeshare promotions.
The long-term contractual obligations and scheduling hassles far outweigh the freedom of vacationing on an ad hoc basis.