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In the not so distant past, timeshare presentations touted that timeshares were good vacation property "investments." There are now disclosures that must be given to new timeshare owners disputing this claim at the point of sale. Here are the top seven reasons why the change was made and why timeshares should NEVER be considered "investments" that will pay a rate of return in the future. 1. The Timeshare Resale Market has an Over-Supply According to the American Resort Development Association (ARDA), there were 1,629 timeshare resorts in the United States in 2008, representing approximately 182,100 units. If every unit is divided into 50 weeks, the result is over 9 million timeshare weeks available for sale just in the US. (Timeshares are big sellers in Mexico, parts of Central & South America and Europe as well.) More timeshare resorts have been built since then. Yet, most sales of timeshares occur at the resorts themselves, as very few people want to purchase sight unseen. This has led to an oversupply and little demand for timeshare resales. 2. Upfront Timeshare Cost The money that a timeshare owner pays upfront does not have a rate of return. It could be used for other purposes like true interest-bearing investments, or for future vacations. The money is spent regardless if the timeshare is used or not. 3. Maintenance Fees Timeshare owners pay mandatory annual maintenance fees whether they stay at the timeshare or not. Maintenance fees in the US averaged $646 in 2008. They typically increase every year. These fees do not include special assessments that may occur due to emergency repair or other non-maintenance related cost. 4. Depreciating Asset Timeshares are worse than new cars in terms of holding their value. Much of the upfront cost of timeshares goes to the marketing and sales of the units. Once the timeshare contract is signed, it can lose as much as 50 percent of its value. There are certainly areas where the resale value can go to zero over time. Check out eBay and the number of unsold timeshares priced at $0.01! 5. Developers Compete Against Owners in the Rental Market In order to bring prospective owners to the timeshare resorts, the developers establish lower rental rates as incentives to visit their timeshare resorts. Many times these rents are lower than the maintenance fees charged to owners. 6. Exchanges A perceived highly-valued benefit of timeshares is the ability to exchange a timeshare for another
one in a different location. This benefit comes at the cost of annual exchange fees that again must be paid annually whether or not the exchange is used. Many owners have found it difficult to schedule an exchange to a desired location. As a timeshare ages, it also tends to lose desirability for exchange. 7. Long term Timeshare Contracts Timeshare contracts have very long durations. Some are written so as to be virtually perpetual. With the financial obligations previously described, very few organizations or astute investors would want to pay so much annually without a guaranteed return (outside of the vacation accommodation that a timeshare provides). These seven reasons are why many financial advisers do not recommend and even discourage their clients from purchasing a timeshare, and why they should never be considered investments.
Bobby Hernandez is a leading consultant within the timeshare industry. He has years of experience with the sales & marketing of timeshares. He's a previous timeshare owner, and now advocates extreme caution for those looking to purchase a timeshare as the financial obligations for many would-be buyers will often exceed the vacationing benefits. Mr. Hernandez is most dismayed by the number of owners trying to resell their timeshares. He personally experienced many broken promises and costly, yet unsuccessful resale attempts for his own timeshares. Feeling exhausted and jaded, he decided to listen to a company called Timeshare Relief. Their service not only promised but delivered on the permanent elimination of his financial burden related to his timeshare. More information can be found at http://www.timesharessite.com including a free online presentation about the company and the options available to owners.
Article Source: http://www.timesharessite.com
==== ==== For more Information on Timeshare Reviews please check this out; http://www.timesharessite.com
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