What To Know Before You Buy a Timeshare
Many of us have stayed at a resort on a beautiful beach in a location where Seasonal Affective Disorder (SAD) isn’t even a thing. You spend a few days splashing in the infinity pool, bronzing on the beach
even though you should never do this, and frequenting the swim up bar to enjoy frozen cocktails festooned with little umbrellas.
Every day, you pass a table in the lobby with attractive young people anxious to tell you that you could own a piece of the very resort in paradise you are enjoying. Then, one day, it happens. You wonder whether you should buy a timeshare. Well, should you buy a timeshare?
What Exactly Is a Timeshare?
This is a trick question. There is no such “exact thing” as a timeshare these days.
At their genesis in Europe in the mid-20th century, and during the 1970’s when they became popular in Florida, a timeshare was a fractional (part) ownership in a vacation property whereby a person(s) purchased an exclusive right to use a particular unit, at a particular time, for a particular amount of time. (Yep. That’s a lot of particulars. It’s a lawyer thing. I can’t help myself). Typically, maintenance fees and real estate taxes were shared proportionally among the timeshare owners and a timeshare owner could sell and bequeath their timeshare just like other real estate property.
This type of timeshare is still commonly available, particularly throughout the United States where timeshare agreements and timeshare developers are subject to state and federal laws. However, over the years, many other variations of the timeshare concept have evolved and timeshares have become popular vacation options throughout the world, most recently, even in Viet Nam.
Some popular variations of the basic timeshare “fractional deeded ownership” in a vacation property are as follows:
*Leasehold deed timeshares where the timeshare owner essentially rents (leases) a timeshare unit for a specified number of years. (This is fairly popular because in some countries, there are strict rules about foreigners’ rights to own real estate).
*Floating or rotating weeks timeshares where the owner is typically buying or leasing a unit for a week during a particular block of weeks. The popularity of certain weeks greatly determines the cost of a timeshare unit. Thus, it would likely be cheaper to purchase a timeshare week in Florida during the fall hurricane season than during February when denizens of the frozen north might be willing to trade their first born for some warm sunshine.
*”Vacation Clubs” where the timeshare is essentially in the form of a deeded or lease based membership that entitles the owner/lessee to reserve a unit at a choice of properties during a particular time.
*Points based “timeshare” programs usually offered by large resort groups and their partners where one can buy or lease a certain number of points to use at various properties for accommodation and sometimes for other vacation needs such as air travel, rental cars and cruises.
The Good — When the Answer to the Question “Should You Buy a Timeshare?” is “Yes!
- You are not a spontaneous, adventurous person.
- You have taken a vacation the same time every year and you know exactly what type of accommodation, amenities and location you want to have on your vacation.
- Location, location, location.
- You plan to travel with the same number of people every year.
- You enjoy reading (and understanding) fine print and consulting the Better Business Bureau and perhaps the office of the Attorney General or the equivalent in your chosen foreign land.
- You have done the actuarial calculation and have determined that your vacation taking lifespan in terms of years, divided into the cost and fees of your timeshare is less than the anticipated cost of the same vacation, over the same period at an increasing yearly market rate. (Got that?)
- You find a good deal in the secondary timeshare market to purchase a timeshare from an owner with buyer’s remorse who is selling below market value.
- You can pay cash and do not have to finance your timeshare purchase, and you are certain that you will not need that money to put food on the table and keep a roof over the head of your family; help put your child through college; or take care of your aged, impecunious mother.
The Bad — When the Answer to the Question “Should I Buy a Timeshare?” is “No Way”
- If after searching your soul and being totally honest with yourself, you realize that in your case, the opposite is true for one or more of the above items.
The Ugly — Why You Should Not Buy a Timeshare on Your Honeymoon (True Story)
- You are terrible at resisting persistent salespeople, especially when you are on your honeymoon on a beautiful Caribbean island that shall remain nameless (except that it is dry and windy, one of its official languages is Dutch, it is near Venezuela, and its name starts with an “A” unlike the other nearby islands that start with “B” and “C” respectively.)
- You have a crystal ball and know that your marriage will end in divorce.
- You have another crystal ball that is absolutely, positively omniscient and can absolutely, positively predict that the timeshare developer who is selling you the timeshare, will declare bankruptcy.