On occasion, I go to Yahoo! Answers to answer some questions about timeshares. Many of the questions are about buying timeshares or getting rid of them. I found an interesting question today, and decided to bring it here.
Question: What are the negative aspects of owning a timeshare?
Here is my response (with some additions):
1. The contracts – Many are setup to have timeshare owners pay ever-rising maintenance fees for a very long time (sometimes even equivalents in perpetuity) whether they use their timeshare or not. They are bound by the contracts to do so. Not paying can be enforced with garnishing of wages as well as default judgments by the courts. The contracts heavily favor the developers and have been upheld in court, so there is precedence for enforcement.
2. The difficulty in getting rid of timeshares – One estimate has as many as 3 million timeshare units for sale out of the nearly 7 million total units sold. Supply is extraordinarily high while demand is very low. Timeshare owners are competing against their own resorts and huge marketing budgets in order to resell and rent out their timeshares.
3. Special assessment fees on top of regular maintenance fees can and will be billed to owners. We’ve seen special assessments as high as $5,000 this past year! Did the owner have to pay? Painfully, yes.
4. Scheduling at some timeshares can be maddeningly difficult even if you have a fixed week. If an owner does not book in advance, these timeshares will rent your unit for extra cash. Even the co-founders of Timeshare Relief had issues when they owned a timeshare.
5. Prepayment for your vacation. Most timeshare presentations show you a significant savings if you buy a timeshare. But it’s over a long period – usually over 5-10 years. Know yourself, are you going to go to like the same place for the next 10 years?
6. No equity – Deeds for timeshares to individual owners are typically tied to time to the resort, not to the real estate of the resort. There is a master deed held by the timeshare company that allows them to reap the benefits of appreciation and take out loans. Think I’m wrong? Take a timeshare deed to the bank and ask them to give you a loan with the deed as collateral.
- Bobby Hernandez