They offered you a killer deal on your theme park tickets and vacation rental. All you have to do is sit through a little hour presentation about vacation properties.
Countless Americans have heard the same presentation. A 2018 survey found that about 9.6 million American households share a vacation property or have a similar arrangement.
But should you buy into one of these properties? Are they as good as the salespeople lead you to believe?
We put together a list of 8 reasons why you should pass on the Timeshare investment. Keep reading to learn everything you need to know before listening to that super long pitch.
1. Why Buy the Cow When You Can Get the Milk for Free?
Did you know that you can rent a vacation rental property without signing a contract or paying for ownership rights? You can! And, you can stay there at a bargain rate too!
Owners, property management, and vacation property sharing companies all put their vacant properties up for rent when the owners don’t book a particular day. That means, they need someone to fill that vacancy and they may offer a good deal if you ask.
2. Lifetime (and Sometimes Longer) Contracts
These contracts get pretty scary if you read them well enough. Developers write the contracts with no cancellation clause or any way for you to get out of the contract in case of illness or extenuating circumstances!
Some of these contracts don’t even expire upon your death! Instead, the contract becomes the responsibility of your descendants until the contract ends.
3. Vacation Property Rentals Cost Too Much Upfront
These kinds of vacation property sharing companies have existed for many years, but they’re priced like they’re still a new and fashionable investment! It’s no wonder why so many people get sticker shock during the presentation.
A week at an average vacation property owned by a property sharing company can cost about $20,000! If you want to stay at a property with prestige, you’re looking at somewhere around $60,000!
4. Climbing Maintenance Fees
If it’s not bad enough that they charge huge amounts as a down payment, every year you get charged for maintenance fees too. These maintenance fees can cost between $1000 and $3500 a year depending on the property you share!
On top of that, most properties increase their maintenance fees by a large amount each year! That’s one of the biggest reasons current owners try to get out of their contracts. Check out these reasons to exit a timeshare contract.
5. You May Never Get to Book Your Rental Anyway
One common complaint from current property owners is that the property they pay for is always booked! They pay all year and even pay the annual maintenance fees but never get to use the vacation rental.
What’s worse is that those people who pay for vacation property sharing end up renting a hotel room or something off of a travel website and paying less for that rental than they do for the rental they never get to use.
6. Timeshare Companies Do Everything They Can to Keep You in the Contract
Not only are the salespeople pushy, but so are the agents you speak to when you want to get out of your contract! They do everything they can to convince you to keep paying your contract.
Think you can sell your property? Nope, they charge transfer fees to inflate your resale cost (which is already too high)!
Have you considered renting your vacation property time to someone else to help make up for all the money you throw into the property? Wrong again, owners get penalized for renting their allotted time at a property to a third party.
7. No One Wants to Buy the Property Rights From You
Many people have already gotten wise to the vacation rental scam. That makes it as hard to sell your property rights to someone else as it is to get out of the contract.
Because there are more sellers than buyers on the market, the resale value is crazy low! If you want to sell your property, you’ll need to work to make your property stand out in the crowd!
8. Low resale value make it a poor investment
As we mentioned, the resale value for vacation rental properties is way low. If you think you’ll break even or make any money flipping a vacation rental property, you’re crazy!
Legacy resorts make up a whopping 70% of the vacation rental property market and their resale value is the worst! If your property is older or owned by independent owners, then you can expect your resale value to hit rock bottom at the moment.
Why Share Your Time When You Can Enjoy Your Vacation When and Where You Please?
There are tons of reasons why you should avoid getting into a contract with a vacation property sharing company. We’ve only listed a few of the most important ones we could think of.
If you already have an appointment to listen to a pitch about vacation property sharing, be aware that they will keep you a long time and get very pushy to make a sale. Don’t let the salespeople push you into something you’ll regret later!
We hope you enjoyed reading this article and that you learned a few reasons to never buy into a Timeshare property. If you’re looking for more articles about finance, business. health and more, check out the rest of our blog today!
