Timeshare - Is it a good investment?
Is timeshare or, as it might now be more often called, shared holiday ownership, a good investment? Well if you look at it as you would investment in property the answer is most cetainly no. It is better to look at timeshare as an investment in future holidays - it is then a matter of asking is do I want to spend money now on future holidays?
Timeshare in Europe has a really bad name mainly because of what can only be described as scams particularly where you are asked to invest in a holiday club rather than in a resort with actual real estate to back up your investment. But also too many of us have experienced the hard selling used by many timeshare/holiday ownership sales operations.
Traditionally investing in Timeshare meant buying a week in a holiday apartment that was yours to use for a period of time or even in perpetuity. Many people loved the idea of having a share of an apartment in a luxy resort with pools, bars and retaurants where they could go each year and where they would be greeted by resort staff who knew them and made them feel special as owners at the resort. It can also be nice to make friends with other owners who go at the same time. Of course there may be times when you fancy going somewhere new or at a different time of the year and that is where the Exchange companies like Interval International, RCI and Dial an Exchange come in, offering the opportunity to exchange to another resort of a similar standard to the one you own at. All of these exchange companies have affiliated resorts all over the world so someone who owns in Spain might exchange for Florida, Hawaii or South Africa subject to availability. In recent years the exchange companies have added cruises as an option.
THis is where the holiday ownership concept comes in. Why, the proposition goes, bother woningweeks in a resort at all when you can pay a similar amount to become a member of a club offering cut price holidays all over the world, in hotels as well as apartments? Some of these are no doubt genuaine but too many offer very little for your investment. OR they give out scratch cards offering prizes in exchange for attending a presentation. Typically they operate by cold calling and offering a free or cut price holiday conditional ongiving up 90 minutes of your time for a presentation. Often they target existing timeshare owners who may be loking to resell their timeshare, these may well be older retired people whose lifestyles have changed and whose children are now adults and who just want to sell their timeshare. Warning signs of a scam include offering part exchange with highly inflated values put on the week that is owned, a “guarantee” that they have a buyer for your week, offering cash back scemes that offer a refund after so many years. The old addage applies here, if it sounds too good to be true, it probably is. It is also worth remembering that consumers buying timeshare in Europe have protection under EU regulations but these do not cover holiday clubs, etc. See the UK Office of Fair Trading Website for more information.
Some reputable timeshare companies have come up with genuine flexible holiday club offering lots of flexibility but backed up by real estate, so you buy weeks at a specific resort but qualify for points that can be exchanged for accomoation at other resorts or in hotel rooms or for airmiles to get there.
Two of these are Marriotts Vacation Club and Macdonald Hotels and Resorts.
So anyone thinking of buying Timeshare ought to follow some simple guidelines:
Think about whether Timeshare is right for you and your family.
Look up the resort you are considering buying at on an exchange company website.
Think about the cost and make sure that you can afford, not only the purchase price but the annual management fees.
In Europe, check that what you are buying is timeshare and not a form of holiday ownership not covered by the consumer protection regulations.
Visit the resort - you can often get a free or low cost preview visit through the resort sales operation.
Read the small print before signing anything.
Do not pay anything other than a deposit at the time of purchase, a reputable company will call for payment at the end of the cooling off period.
Look at timeshare resller websites - resales prices are often much lower that the resort list prices.
Be prepared to walk away if you feel you are being put under too much pressure to purchase Be prepared to negotiate