A timeshare property in the U.S. costs an average of $20,940 per week in a year, which could be one reason for the industry’s growth, according to the American Resort Development Association (ARDA).
However, there are certain risks to consider before considering an investment, including foreclosures on timeshare property. Experts said that first-time buyers are more reluctant to venture into a timeshare compared to existing owners, who are likely more aware of the pros and cons.
Despite other risks such as being prone to scams and low resale value, the ARDA said that the timeshare industry’s net sales in 2016 rose to $9.2 billion from $4.63 billion in 2010. The low average price serves as an enticing selling point, but note that some properties may cost up to $30,000 per week in a year with a resale value of as low as $6,000.
Your reasons for buying a timeshare should not be based on investment purposes. If it’s for a vacation, it may be a good choice only when you carefully reviewed the terms and conditions. You can hire a contract reviewer to find out if the deal serves your best interests, especially preventing you from falling into debt.
Types of Timeshares
A fixed-week timeshare is one of the common types where you can buy a unit at a certain property for the same week each year. On the other hand, a floating deal lets you book an appointment whenever you want, but this draws more competition from more people who prefer the same arrangement.
In a right-to-use contract, the buyer gains membership of the property and leases it for a period of up to 99 years, instead of having true ownership of the unit.
Buyers should read the fine print of any timeshare contract before signing along the dotted line. A timeshare can only be beneficial if you know how to prevent the risks.