The Positives, The Negatives, and The Inbetweens of Timeshares

Most of these properties are often used for vacations, and in most cases, buyers impulsively decide to purchase one. In this context, let’s assume we have a prospective buyer named Philip. Here are the pros and cons he must consider when mulling timeshare ownership.

Disadvantage: While Philip does not need to worry about maintenance, he will need to worry about the annual fees and lack of control over yearly price increases. In addition, the developer can foreclose on the timeshare if compulsory fees are not paid.

Disadvantage: Timeshares should not be viewed as investments because they are tough to sell. Used timeshare units are sold at discounted prices because so many are on the market. Many victims have been done in by timeshare reselling schemes, so buying used units is risky.

Disadvantage: Buying timeshares in foreign counties can be challenging. Some countries have lax consumer protection laws that won’t protect Philip. For example, in Mexico foreigners are not allowed a direct title to a property within 60 miles of international borders or 30 miles of the coast. Unfortunately, these locations are known as hotspots for vacationers.

Disadvantage: However, some timeshare contracts do not permit renting a block out. What’s more, if Philip gets tired of the unit and sells it at a loss, the IRS would not let him claim a capital loss as he could with other investments and properties.

With a fixed week timeshare, Philip can have the rights to a whole beach house for a specific week or weeks every year for as long as the contract states. If Philip has a highly desirable location, this type of timeshare allows his to rent out his block of time or exchange it with the owners of other properties.

Although Philip can choose any week or weeks in a year, other buyers might have already booked his preferred week(s), and he only guarantee preventing that issue by reserving well in advance to ensure its availability.

One downside to right-to-use timeshares is that website exchange services can charge Philip when helping him look for other prospective buyers.

He can also gain points by purchasing them from the club. The points are used like currency, and timeslots at the property are always reserved on a first-come first-serve basis.

Airbnb can be better for residential purposes, while timeshare properties are mostly bought for vacation and other pleasures. Finally, timeshares are generally more expensive than Airbnbs, which are common among those who prefer a private life.