Timeshares basically open the door to shared property ownership, which is popular across America. However, they’re still cloaked in mystery to some extent. Are you thinking about getting timeshares yourself, but are not yet entirely knowledgeable about what they are and how they work? You’re not alone. Many consumers do not know what they are, much less understand the process of purchasing one and the intricacies it comes with. People may even have some misconceptions about timeshares.
As with any investment, it’s best to inform yourself about timeshares by doing your research and consulting with professionals. They can help you get a good handle on things. Apart from having a good handle on the timeshare foreclosure process before making your purchase, debunk these common misconceptions about them first:
1. Buying Timeshares Makes You the Owner
Timeshares come in many types, and buying right-to-use ones actually doesn’t make you the owner. Although you’ll gain the freedom to stay the property over specified dates for a particular set of years, you’ll just be leasing it. In this arrangement, the developer retains the ownership of the property.
2. Expenses End After the Purchase
Much like owning a house, owning a timeshare involves annual maintenance fees, also called as assessments. Whether you stay in the property or not, you’ll be obliged to shoulder such costs. If you borrow money to buy the timeshare, you can’t fall behind with or default on your mortgage payments to avoid foreclosure. Bear this in mind and assess your finances and capability to pay. If you think that you may have problems down the line, it’s better to take a step back and think twice.
3. Timeshares Are a Great Investment
As a timeshare owner, you may be allowed to rent out the property throughout the dates you paid for. However, you shouldn’t buy a timeshare with this motivation. Even if you bought your timeshare out of your pocket, you might struggle to find renters outside your own social circle. The market is quite competitive; you would be competing with other timeshare owners and traditional rental property managers.
4. Selling Timeshares Is a Fast and Rewarding Transaction
It’s challenging to sell your timeshare at a high cost. The value of timeshares tends to depreciate a lot because of their abundance. In most cases, you’d get significantly less than what you paid to get yours. If you’re in the market to resell timeshares, you might want to think again.
But then again, the proceeds from the timeshare sale aren’t the usual reason for selling. It’s a common strategy to beat a foreclosure. And if your timeshares aren’t worth keeping due to their assessments, offering them at steep discounts can save you more money down the road. When it comes to money and investments, it’s always pragmatic to think long term.
Much like other costly products, timeshares require circumspection. Otherwise, their risks could outweigh their benefits to be considered viable. Do your research, weigh your options, and seek professional advice before making a significant purchase.