Know what you’re dealing with
Before you decide to buy a Timeshare, or even attend a presentation research who you’re dealing with. Some companies carry fairly poor reputations and should be avoided regardless of the promotional offer they present. Don’t forget to review the big lies that most companies will tell you.
Due diligence refers to the research which you should do on any company prior to considering any exploration of their timeshare products.
To begin with, always search google for any reference to the timeshare firm online. Generally reviews will be easy to find, along with information regarding the cost of the timeshare. One of the most important forms of due diligence involves researching the exact cost of a timeshare.
Running the numbers
Generally speaking, if you examine all the expenses involved in a timeshare, you will quickly find that it’s a bad deal in every instance. For this reason, usually the only people you’ll find speaking about just how great timeshares are are either their salesmen or owners. This isn’t coincidental.
When buying a timeshare you generally need to pay something for it, generally several thousand dollars to far more if you buy it new. That money spent is a sunk cost. You won’t be able to recove the purchase price later on if you try to sell. In addition, that purchase price can carry some significant time-value-of-money implications later on down the road.
Always carefully weigh the true value of supposed perks attached to a timeshare. For example, many timeshares offer exchange privileges as one of their primary selling points. Basic research will generally reveal that in order to exchange you must be a member of an exchange club such as Interval International and pay the exchange fee. Club membership and other exchange fees generally total around $325, but can easily be more. Adding this to the yearly maintenance already being paid and you’ll often find yourself paying more to exchange than you would to simply stay in a luxury hotel.
If you do not exchange then you’re stuck with the same place in the same development forever. Being non-flexible can be a long term cost as well.
After all your research you’ll generally find the true cost of a timeshare at the development you’re considering. Your numbers should include the yearly maintenance of around $600 plus the $325 exchange fee plus the prorated cost of purchasing the timeshare. For many, this amounts to more than $1600 for the debatable luxury of owning a timeshare. For more information on some pitfalls of purchasing a timeshare view our guide on buying new and how to get a timeshare cheap.
