Buying a timeshare can seem like a great idea. It’s an opportunity to vacation with friends and family in a beautiful location. But it’s not all fun and games. Buying a timeshare can also drain your wallet. In fact, the average cost of a timeshare in 2018 was $21,455.
Timeshare companies can take advantage of people. They will try to sell you a timeshare for a higher price than you paid for it, and will tell you that it’s worth more than you actually paid for it. Unfortunately, they don’t give you enough information about the actual costs, or the benefits of owning a timeshare.
To avoid this, you need to understand what you are buying. Unlike purchasing real estate or a regular home, timeshares do not appreciate in value. Instead, you will be paying annual maintenance fees, property taxes, and special assessments. If you are unable to afford these costs, you may need to borrow money to pay them. And you won’t be able to predict when you’ll be able to use the timeshare again.
There are a few things you can do to protect yourself and get the most out of your timeshare. One thing is to be sure you update your ownership documents. Many timeshare companies offer financing. However, you should be aware that you will need to put a higher down payment on your timeshare than on a traditional home. Fortunately, most people with 401(k) plans can borrow up to 50 percent of the vested balance of their retirement savings plan. You can also use personal loans. However, they will charge you a higher interest rate than a traditional mortgage.
Another option is to try to sell your timeshare. You can contact a company that specializes in timeshare exits. This company, called Wesley Financial Group, LLC, can help you find a buyer and even cancel your contract. Sadly, most of these companies will not buy back your timeshare once you’ve sold it.
A third option is to rent out your timeshare. Renting your timeshare can be a good way to offset some of the costs. Some owners have found that they can make money by renting out their timeshare, but it is a tough process to do it right. Also, you will never be able to completely cover all of your expenses. The best approach is to make the most of your timeshare before selling it.
Lastly, you should be wary of perpetuity clauses in your timeshare. Sometimes, these clauses can transfer your timeshare to your heirs if you die. This can add an unexpected debt to your loved ones’ lives.
While there are many different ways to save yourself from buying a timeshare, you will need to do some research to find out exactly what you are signing up for. You can get a free tool that will give you an estimated value of your timeshare. For instance, Redweek provides a free timeshare value calculator.