The Basics of Timeshares
There are 2 basic ways timeshares are sold. The first way is by weeks, each owner will own a set week or a floating week. The second way is to own points. Points can be a little tricky at times but for the most part remember Points = Weeks.
Timeshares as Investments or Not
Most people become convinced that timeshares are investments much like a houses. However timeshares are far from being a good investment. Think of a timeshare as being similar to a company stock. If this company sells off millions of shares of stock, it dilutes the market making the price per stock to go down. It is the same with timeshares you are a fractional owner of a room at a resort. If a resort has 1000 units available and 50 owners per unit, that makes 50,000. Now say 5 % decide to sell there timeshare that means there are 2500 timeshares for sale on the resale market. Now you have to realize that the 2499 timeshares for sale are your competition but unlike the real estate market where every house is different or has different features you are selling the same thing.
Deeded vs. Leased
There are 2 different types of ownership in timeshares the first is deeded. This is very similar to owning a house. You are the owner of a fractional resort. Your deed will state that you own a specific week and a specific unit number, however if you have a floating week allocated to you it will say a week number/float and floating unit. This is a physical ownership stating you own a specific unit number or floating unit during that specific week number or floating week. Deeds are great because they can be passed down to your children for their enjoyment. There is also no time limit of how long you own this deed.
Leased on the other had will be set for a specific amount of years typically 30 years. Just like a Deed you would own a fraction of a resort and would be able to use it as the lease states however you would not be the owner after the leased years are up.
Fixed or Floating
Different resorts offer different packages. When it comes to the week you own it could be a fixed week or a floating week, in some cases it could be both. If you own a fixed week that means that you have it that week every year. If you have a floating week that means that you need to contact the resort to reserve the week you want. Now some resorts will assign you a fixed week but also allow you to call and reserve a different week while giving up the fixed week you have. Which one is right for you really depends on your schedule and how you schedule your vacation. If you know you will have vacation time every year on a set week than a fixed week would be perfect. If you have no idea when you can go on a vacation then you are better off looking for a resort that has floating weeks.
How do Exchange Programs work
Exchange programs such as RCI (Resorts Condominium International) and II (Interval International) are paid memberships. These memberships allow you to bank your timeshare week with the company. This will give you 1 banked week that you can use at a later date. When you decide you want to go on vacation you would call the exchange company and ask to use your banked week for the resort you want to go to. These programs are great for someone who can’t use their week that year. Another great alternative to banking your week would be renting your week out to someone that wants to us it. This could be a friend, family, or coworker. If you can’t find someone personally to rent out your week there are many services that can help you rent your week. Just look for a company that is aggressive with their advertising and marketing or your timeshare you want rented.
Selling a Timeshare
There are 3 ways you can go about selling your timeshare.
1.) The first way it to go to a licensed realtor. A realtor in most cases will charge you a 30% commission and sometimes an appraisal fee. This can take a lot away from what you get from the sale of your timeshare. Another common problem with realtors is they can’t not show your timeshare like they would a house. No resort is going to let a realtor show your unit to a potential buyer. So by using a realtor you have to hope that they have someone that can walk in to their office and say they want to buy a timeshare. Not only that people have to walk into the realtors office wanting to buy a timeshare.
2.) Some resorts will have a resale program and in some cases it could be a good option. However most resorts are more concerned with selling the units they still have available. Selling your timeshare is not going to be a priority to them because they are more concerned about making money for themselves at the resort itself. They will make a lot more money selling their own units than reselling yours. Not to mention they are getting maintenance fees from you year after year. Be careful and look closely at what the program entails
3.) The last way possible is to advertise. There are many good companies out on the internet that do mass marketing to millions of people. At the same time there are many bad companies that will tell you what they are going to do but really don’t. Be careful who you list with. Here is a quick checklist to make sure you list with a good company
a. Check the BBB to see if they have any complaints, remember every company will have a few complaints but check to see if the complaints were resolved.
b. Also look around at the internet to see if the company is advertising as they say.
c. Any guarantee’s the company talks about; make sure the guarantee is written on the contract. Don’t just take their word for it.
d. Be reasonable if they tell you to price your resort really high or for more than what you paid for it be leery. A good company will want you to price competitively with other similar units to ensure a quick sale.
e. Make sure the company you list with will screen all calls and emails regarding your timeshare. People all over the world buy timeshares you don’t want to be bothered will calls at 3am.