Who doesn’t love vacations? Of course, we all do. Buying a timeshare seems like a great idea. But did you know it can cost you a lot in the long run?
Simply put, a timeshare is a real estate contract that gives you a right to use a timeshare or a vacation club for a period of time.
The term ‘Share’ here refers to the fact that there are multiple owners in a timeshare contract that shares the cost and gets the right to stay in the property for the assigned period of time.
Timeshare Contracts – Types
There are two types of timeshare contracts – deeded and non-deeded. Deeded contracts are also known as fee-simple contracts. This is the most common type of timeshare agreement that enables the owner to get a share of ownership or sell/rent your property.
Non-deeded contracts are also known as right-to-use agreements. This type of contract works in the same way as signing the lease. You purchase the right to use the property for a stated time period. However, the right of ownership reverts to the original owner when your term ends.
Once you’ve bought the agreement, the most important thing you should do is invest your time learning about your rights as a timeshare owner.
All timeshare contracts come with a recission period clause, which basically is a cooling-off period in which you can return your timeshare contract back.
Make sure you carefully check this clause as it enables you to get rid of your timeshare agreement if you regret your purchase within a stated time period.
According to LinxLegal, a company that specializes in Bluegreen timeshare cancellation, “In 2019, timeshare sales increased 7% to $12.5 billion as the industry recorded its 10th straight year of growth. But now, with the unforeseen catastrophic change in the travel economy in 2020, the industry is taking big hits. If people can’t travel, they can’t buy it. With no foreseeable end to the COVID-19 crisis, these companies will likely go bankrupt, or their product will become so expensive that they will have to cut their sales staff in half and raise prices.”
The biggest disadvantage of buying a timeshare is that it involves extra costs (other than the purchase cost) that you’ll have to pay each year regardless of whether you use the property.
For instance, you may be responsible for paying property taxes, maintenance charges, utility expenses, etc.
What if you’ve missed such payments? Can timeshare ruin your credit? It definitely will. When it comes to timeshare foreclosure, it can drive your credit score to drop which can greatly affect your ability to get credit in the future.
You may have to face foreclosure if you fail to pay these charges.
Scheduling Your Visit
This is the most frustrating part. The best times generally fill up quickly, and you don’t get the dates you want.
Sadly, there is nothing much you can do in this regard except for scheduling your visit at an undesirable time.
Each Country Has a Different Law
When you purchase a timeshare outside the US, you’re not shielded by the US laws. Unfortunately, consumer protection laws in other countries are not as powerful as those in the US. As a result, you may have to compromise on several things, making your timeshare journey not as enjoyable as expected.
Not Very Easy to Sell
Selling timeshares isn’t as easy as it may sound. There are hundreds of thousands of timeshares available on the market. And you may have to sell your right at a loss if you want to get rid of a timeshare contract.
All in all, timeshares are not an investment. Their value depreciates with time. Also, the contract you get is generally ambiguous, making it difficult for the user to know about their rights. If you’re planning to invest in a timeshare in the coming future, make sure you get legal advice first and also carefully review your contract before you sign anything.