Buying Your First Timeshare

Buying your first timeshare shouldn’t be anything to be afraid of as long as you enter the process prepared. The timeshare was born out of a good idea but has gotten somewhat of a ‘bad rap’ over the years because of unscrupulous marketers taking advantage of ‘fine print’ and slick sales tactics but there’s nothing intrinsically wrong with buying a timeshare as long as you know what you’re doing.

First of all, a little background:

“Timeshare” means exactly what it says. It’s when several people share, over the course of a year, the use of a desirable piece of property, usually a condo unit, apartment, bungalow or cottage of some sort. Sometime it’s a free standing unit and sometimes it’s one unit of a multi-unit building…..it just depends.

The timeshare idea actually started in England shortly after WW2. Originally the idea was called ‘vacation home sharing’ or ‘holiday home sharing’. Brits were glad the war was over, they were back working without worrying about anything, they had money in their pockets but they couldn’t afford traditional expensive hotels and vacations.

So somebody came up with the idea of going in together with some other folks and buying a nice vacation cottage somewhere and sharing it during the various seasons of the year. Originally this was something that friends or families did together so there was a certain amount of trust involved.

By 1947 the idea had come to the US and was now usually called ‘timeshare’ ownership. What originally made timeshare ownership attractive wasn’t so much the price you ‘got in’ at but rather the fact that that price was sometimes (but not always) frozen over the life of the agreement and/or the fact that more traditional accommodations (i.e. hotel rooms) simply were not available in some of the more exclusive areas.

What has tarnished the reputation of the timeshare industry has been the public misunderstanding of the fees involved (specifically the ‘maintenance fee’), the difficulty in reselling or transferring them to somebody else in the event you decide you don’t like or want it anymore, and the sales tactics of many of the companies who sell them.

The problem with the ‘maintenance fee’, in essence is the fact that you have to pay it whether you use the unit or not. It doesn’t look like much when expressed on a daily (AKA: ‘per diem’) basis but remember that you pay it for the whole year whether you use the unit or not. And sometimes it can escalate with cost of living and/or other factors.

Looked at from the timeshare company’s viewpoint, this what makes timeshare sales so attractive to them…i.e they get to sell the same piece of property 52 times to 52 different buyers (timeshares are generally for one week periods).

That being said, timeshares can still be a good investment because they are generally kept up very well, you usually get amenities in timeshares that you wouldn’t get in most hotels and (as already mentioned) sometimes the timeshares are in areas where you otherwise could never vacation.

If you buy a timeshare you need to plan very carefully….i.e. plan where to buy, what company to buy from, read your contract very, very carefully, be sure you understand everything in your contract, and be sure you can afford the lifetime cost of the contract.

Be sure that you really, really like the area where your timeshare is because, depending on a variety of factors, you may not be able to exchange it for a timeshare somewhere else later. There are associations within which timeshare owners can exchange timeshare units amongst themselves, but again, this just adds to the complexity of timeshare ownership.

You also need to be very careful of the company you purchase your timeshare from. Some companies have very bad reputations due to shady, high-pressure sales tactics. Even though all US states and even Mexico have mandatory ‘cooling off’ periods during which you can cancel, companies have ways of trying to get around them too if they want to. Your best bet is just to not deal with companies with bad reputations.

Last but not least, be sure you read every sentence in your contract. It’s a legal document and you can be sure that it was put together by a very sharp lawyer who does not work for you but rather for the timeshare company. In fact, he/she probably got a timeshare unit thrown into their compensation package.

There is one way to seriously tilt the odds in your favor though if you really, really want to own a timeshare. There is a huge market of ‘used’ or resold timeshares available. Just like so many other things, the best place to find them is ‘on the net’.

In these situations somebody wants to get out of their existing contract or sub-lease their time). Regardless of their reason for wanting ‘out’….you can get timeshares for pennies on the dollar this way. In most cases, it’s the same unit that other buys are paying more money for. Just like in real estate….you might find a unit that somebody just simply doesn’t want. Their loss is your gain and you’re usually doing them a favor by taking the unit off their hands.

But again….be careful what you sign. Once you do…enjoy your vacation!