Timeshares may be a sensible purchase for you if you want to create great holiday memories and don’t mind the associated escalating costs. Timeshares can be very expensive to buy into, and nowadays, because of pricing, a timeshare purchase typically requires a finance agreement involving a down payment together with a long term loan agreement. Buyers will also have yearly maintenance fees that can increase dramatically over the years. Timeshares are increasingly more expensive to get into and more expensive to service.
Many timeshare owners are not aware whether they have the legal right to exit their timeshare, or even if they can exit at all. The majority of timeshare companies only care for their pockets, and not those of the consumer.
The biggest misconception of value is when a timeshare is described as a real estate property or worse still an investment. Timeshares are not like real estate. When you own bricks and mortar, you own everything on that property. If you own a timeshare, you only own the use of time for a particular period. You cannot use the unit all year long, and you can only use the unit when it’s your time of year, or when availability allows.
Is timeshare an investment?
Timeshares do not generate profits from increased value. In fact, timeshares decrease in value, even when they’re in a highly desirable location. Realistically timeshares lose all monetary value from the moment they are bought.
Timeshares are also nearly impossible to resell. New and used timeshare markets are abundant in inventory supply outweighing demand, which is a really bad sign. So, even if you do manage to sell off a timeshare eventually, expect a price considerably lower than what you paid. Also, try not to think about the thousands you shelled out for maintenance fees over the years, because that’s something you should have considered when you initially purchased the timeshare.
How much will I lose?
How long is a piece of string? Most resale companies are nothing more than listing sites that offer no real guidance as to a realistic value, if any. Also they are rather more reactive than pro-active in their marketing meaning they don’t actively try to sell but merely wait for an approach from an interested party. Another facet is it’s impossible to ascertain how long the listing has been on the site.
The Resort Development Organisation (RDO) the self appointed European timeshare trade association list recommended resale agents but they are there solely to serve the purpose as an avenue that resorts can point disgruntled owners towards, those owners who want out and expect a monetary return for their ownership. Basically creating the illusion of false market demand.
We show below the vast difference in the perceived value of the same timeshare being Grandview in Las Vegas. On a resale site the value is quoted as $15,000. On ebay the bids start at $1, interestingly even at $1 there are no bids.
Resale Listing
eBay Listing
In the quest for fairness, it may be argued that the ownerships are not identical and as such we are not comparing like for like but what is a certainty is that the resale listing is a 1 bed apartment, whereas the 1$ eBay listing is a 2 bed, that alone must influence the value.
From the above we can establish that the resale market is as confused as the owner. In most other resale arenas there is an accepted market value. Two same cars of a same age will have an approximate similar value relevant to each other. If one is wildly overpriced against the market, it simply won’t sell; this is the general law of buying and selling. Timeshare simply doesn’t follow any rules, because there are no rules.
What return can I expect from my timeshare?
Apart from holidays, not a lot. Given the above, the question posed is impossible to answer; understanding the total extremes of pricing it may be a case of sticking your finger in the air, think of a number and half it.
One thing that’s for certain is that under no circumstances should timeshare be considered as a financial investment. There is no way on God’s planet that the financial return will come anywhere near the purchase price. In Fact, in many cases, even trying to give an ownership away doesn’t work.
Remember, given that timeshare is considered more of a liability than an asset why would anybody actually want one, or more importantly continue owning one, another question impossible to answer.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk