A Guide to the Costs of Buying a Timeshare in 2023
When times are good, such as in the 1990s and 2000s, timeshare sales soared.
Now that the global pandemic has taken a toll on the world’s economies, many potential buyers have taken the side road from owning a condo or home at a resort.
But have you ever thought about owning a timeshare? If not, it’s the perfect opportunity to dispel some myths about purchasing a timeshare in 2023.
Read on to learn more about what a timeshare entails and your cost.
What Is a Timeshare?
A timeshare is known as a real estate scheme for real estate at a resort or vacation spot. Many owners split the expense of the property, as the word share denotes. In exchange, each owner will have the right to occupy the home for a predetermined amount of time.
The typical annual time block is one week, while some allow owners to buy more extensive or less annual time blocks.
Types of Timeshare Contracts
Deeded and non-deeded timeshare agreements are both available.
Deeded
Deeded or fee-simple contracts are like buying a house—you get a share of ownership. Your timeshare can be rented or passed down to your children. Approximately 90 percent of timeshare exchanges are fee-free or leased.
Non-deeded
Non-deeded or right-to-use contracts are known as signing a lease. You buy the right to use the property for a certain number of years, but you don’t own it outright. Ownership reverts to the original owner at the end of your term.
How Much Does a Timeshare Cost?
A timeshare in 2023 is an investment and can cost anywhere from a few thousand to tens of thousands of dollars. It depends on the type of timeshare and how long you’ll purchase it.
Maintenance Fees
Maintenance fees can vary drastically depending on location, amenities, and size. Generally, maintenance fees are a percentage of the upfront purchase cost. Maintenance fees can also vary between styles of timeshare—for example, point systems tend to have higher fees than traditional, set-week timeshares.
Buyers should contact their timeshare resale specialist or developer. They can provide a detailed estimate of the ongoing maintenance fees. The price of maintenance also increases with inflation.
Extra Fees
Researching any extra fees associated with a timeshare in 2023 will be critical to ensuring that one can afford to purchase the timeshare.
Additionally, fees increase. You’re required to contribute to the cost of property assessments. Timeshare owners receive extra charges if a storm damages the property.
How Are Timeshares and Vacation Homes Different From One Another?
The main distinction is that a vacation home is an investment in money. Timeshares are not. When you buy a vacation property, the entire house is yours. The house is yours to sell, rent, renovate, and live in whenever you like. If you choose to sell, you’re likely to make a profit. A house requires an initial investment.
Timeshares offer more social spaces in more popular destinations than vacation homes. They also need less cash upfront. You only pay for the time you spend at the property. And you don’t have to perform maintenance work yourself.
But if you no longer want to use the timeshare, you’ll have a more difficult time selling it—and you won’t profit. The money you spend keeping a vacation home can enhance its resale value.
You Can Buy a Secondhand Timeshare for Less
Sometimes people don’t like their timeshare, get tired of it, or can’t afford it- they will look for an out. That means you can get a timeshare from another owner for free instead of from a timeshare. Used timeshares sell for 0% to 10% of the retail price, according to Timeshare Users Group, a consumer advocacy group of timeshare users.
Why would someone give away their timeshare? The most common reason is that they want to stop paying the annual maintenance fees. You’ll be taking on those fees, but you won’t have to pay an upfront cost for the timeshare.
How Can You Buy a Timeshare and Save Money?
Invest in a Used Timeshare
The market is excellent for purchasers because it is tough to sell used timeshares. Yet, use a trustworthy timeshare resale network. Scams involving resale do exist.
If in doubt, give the hotel or resort a call to confirm the seller is a timeshare owner.
Rent Before You Buy
Renting before you buy allows you to consider the surrounding area, amenities, and what type of lifestyle you can maintain with the timeshare. This strategy helps to give you an idea of whether or not the timeshare is a long-term investment or something you would like to take advantage of for a few years.
When investing in the future, researching and understanding the costs associated with the timeshare is vital. Renting first can be a great way to determine whether the timeshare meets your criteria.
Don’t Take Out a Loan
The high initial costs of a timeshare may make it tempting to borrow money. A loan will backfire because most banks will not offer loans for timeshare assets- since timeshares depreciate. You’ll be responsible for loan payments on top of maintenance fees.
In the event of a foreclosure, you’ll still need to pay any outstanding balance on the mortgage. For best results, only buy a timeshare if you can afford to pay upfront.
Ways to Save Money on a Timeshare Sale
Many timeshares offer special upgrades during the off-season when they are more likely to get more range and higher occupancy. These offers are usually discounted and show great value, so it pays to research them well. With preparation, you can save an amount when purchasing timeshare costs in 2023.
With this guidance, conducting a study and finding ways to save money on a timeshare buy is simpler. Don’t wait; start making plans for the future of your ideal holiday site immediately!
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