Timeshare options can be a tempting purchase. The prospect of owning a little getaway spot at a fraction of the price sounds like a solid selling point. But is it really the bargain it’s made out to be? Not if you look at how many people are searching for things like “cancel Diamond timeshare” and “how do I get out of a timeshare.”Timeshare salespeople are a cultural meme at this point.
In legitimate real estate practice, you will find consultants helping individuals in an attempt to render a service. That is not quite what one would say of the timeshare industry and its sales staff. They are famous for shamelessly pushing their product without clarifying the fine print. This leads to numerous headaches and regretful buyers. The problems don’t end there either. Join us as we go through the list of the top pitfalls involved in timeshare vacation home.
It’s In The Name
The first pitfall is right there in the name, a timeshare is a commitment. When last did you enjoy an experience you were contractually locked into? With a timeshare, you get an allocated time within the year to visit the property. Anyone who has owned a timeshare will tell you that it is not like owning a vacation home. You don’t own the property or any of the assets on it. You are a guest locked into a very convoluted contractual obligation.
It’s Not Deductible
Have we emphasized that you are not buying an asset? Timeshare is not a purchase, and it is rather a murky leasing scheme. You cannot claim any returns on taxes because you have not acquired an asset. There are a couple of situations in which you will find that your timeshare is useless to you. This includes loan applications and conditions in which equity is measured.
While it is not an asset in any useful way, you are taking responsibility for an interest in real estate by purchasing a timeshare. If you paid for the timeshare with a mortgage or other personal loan forms, you would face foreclosure upon defaulting on a single payment.
But wait, it gets worse. There are a number of hidden fees, and missing a single payment on any of these will get you into financial trouble. These include special assessments, taxes, and maintenance fees, all of which can end in foreclosure.
Renting Is Probably Cheaper
There is a very misleading tactic that timeshare salespeople use. They compare peak season rental prices to the cost of a timeshare over a given time. They do not add that the comparison is almost always with the very worst, lowest-demand timeshare slots.In other words, you are comparing your savings to prime time prices when you are getting rainy winter weather. Comparing apples to apples, you will always pay less for your vacations by renting, given you equate it over a relevant timespan.
Scams… Oh, So Many Scams
There is a fancy term for scam artists in this industry. They are called “timeshare resale brokers.” These people usually offer to assist you in buying or selling timeshares. They will confidently convince you that they have a buyer or seller lined up, charge you an upfront fee, and disappear into the night. While not all timeshare resellers or salespeople, in general, are scam artists, there are laws in place to protect one against this industry specifically, and that speaks volumes.