Is A Timeshare A Real Estate Investment?

While a timeshare in the United States can sometimes be tied to real estate, consumers should NOT purchase a timeshare with an eye for investment.

Even in the best of times, a timeshare will NOT go up in value and should NOT be thought of as an investment except as an investment in future vacations.

In most jurisdictions, a real estate license is necessary to handle a timeshare transaction. Check before doing any business.

Are RCI and II My Only Options For Trading?

No, not at all.

There are a number of smaller, boutique or alternate exchange companies. Some of the better known ones are:

Dial An Exchange
Trading Places
Platinum Exchange

Not all timeshares are accepted by these companies.

What Is Timeshare?

In the most basic terms, timeshare is buying and owning your vacation accommodations, as opposed to renting a hotel room, resort room or vacation home. The difference between timeshare and whole ownership of a vacation or second home is that you only purchase and own the amount of time that you plan on using each year

How Do I Buy a Timeshare?

Timeshares can be purchased on the primary market, i.e. from the developer, or on the secondary market from an existing owner. Developer sales are generally onsite at the resort, while secondary market sales can occur online between consumers, via a licensed broker, or in some cases through the developer.

Can I Sell My Timeshare?

In most cases, the legal answer is “yes.” Although the value of the timeshare maybe far less than what you originally paid (see below) and some timeshares sell easier and faster than others. Timeshares can be sold if you no longer want/use it.

Why Is The Resale Value Of My Timeshare So Much Less Than What I Paid For It?

Timeshares purchased on the primary market, e.g. from the developer, include the cost of building plus the cost to sell (in most cases, marketing and sales costs account for upwards of 50% of the price) plus the profit margin, just as with any other product. Combine that with the fact that there are millions of timeshare units for sale on the secondary market and the fact that many developers are restricting the rights and benefits to secondary market purchasers, the value of most timeshare is considerably lower than most owners realize. It is simply supply vs. demand vs. benefit.

What Is The Difference Between Timeshare Weeks And Timeshare Points?

Timeshare weeks are the standard and are the simplest to understand and use. Owners have the right to use 8 days 7 nights, consecutively per year, at a home resort or at another affiliated resort. Point systems vary from developer to developer and from exchange company to exchange company, but all operate under the same premise; owners use their points as the currency to make accommodations and other reservations.

With weeks, location is key.  With points, reservation windows are key.

Understand that with points, the developer can, and often does, change the rules leaving you at a disadvantage and opening the door to trying to sell you more points.

What Happens If I Stop Paying My Annual Fees?

As mentioned above, timeshare ownership carries with it benefits and responsibilities. One of those responsibilities is to pay your share of the annual maintenance fees levied by the resort. Failure to pay these fees may result in losing your ownership rights and in many cases lead to a foreclosure, which can have a significant negative affect on your credit and your ability to purchase a major item or even obtain employment in the future.

What Is An HOA And What Does It Do?

Your HOA or Home Owners’ Association is in charge of the management of the resort or in some cases, responsible for the hiring of the management company of the resort. HOA duties include assessment of annual fees, budget, and/or special assessments, the day-to-day operations, determination of expenditures or improvements and staffing of the resort with the exception of the marketing and sales departments. Individual owners are encouraged to get involved in their HOAs.

Is A Timeshare The Same As A Vacation Or Travel Club?

No. While vacation and travel clubs differ, they are both are distinct from timeshare in that a vacation or travel club involve a membership vs. ownership rights. If you are considering a purchase of a timeshare, vacation club or travel club and are unsure of the differences, do your research before committing to anything.

I Just Received A Call Saying Someone Wants To Buy My Timeshare. What Should I Do?

Hang up and report the call to the Attorney General’s office in the state where you live and the state that they are registered in.

Do I Have to Go to the Same Timeshare Every Year?

No. There are more 6,000 timeshare resorts worldwide. The vast majority of these timeshares are affiliated with either RCI or Interval International (II.)

Most consumers buy a timeshare with the thought of trading it or exchanging it. For a fee, generally less than $200 per week or trade, you may trade or exchange your timeshare for comparable accommodations throughout the world.

It is important to understand that timeshare exchange companies operate under certain “rules.” Just because you own a timeshare, you are not guaranteed the option of trading when and where you want to go.

You have to understand these rules before you purchase a timeshare, or you may find you have made an expensive error.