Purchasing timeshare property is a common way to stake out a favorite vacation destination and remove much of the worry that comes from planning a vacation. Timeshares are available with a variety of terms and are not only for the wealthy. However, there are certain disadvantages to purchasing timeshares. Knowing what to expect, including the possible downside, will help you make a good purchasing decision.
In many cases where an individual purchases a timeshare from a developer rather than the actual owner, the property experiences severe depreciation. This is because the developer often incurs high marketing costs that drive up the price of the timeshare. While this may simply raise the price in the short term, it can also be a problem in the distant future when you attempt to sell your timeshare property and find that it fetches a price lower then you expected, or even lower than what you paid for it. Timeshares are also very susceptible to general drops in the price of real estate.
Many timeshare owners find that the long-term costs of their purchase are higher than they initially anticipated. This can happen for several reasons. Besides interest that must be paid on any timeshare that is financed, buyers are also responsible for annual maintenance and service fees. Maintenance fees change over time, generally increasing as the cost of labor and building supplies rises. At the same time, timeshare owners may be required to pay additional assessment fees if and when their property requires extensive repairs, like a new roof or a repair to environmental damage not covered by the property's insurance policy. The unpredictability of these fees makes them a major downside to timeshare ownership.
Although many people purchase timeshares primarily for the convenience they offer, some of these advantages may also lead to inconvenience down the road. Owning a timeshare removes the need to plan individual vacations by choosing a destination and researching hotels, but it also eliminates the opportunity for spontaneous trips since timeshares must be reserved in advance. Some owners find that buying a timeshare in a resort area they enjoy visiting locks them into visiting the same location every year and takes away the chance to explore other places.
