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Timeshare Deals: When a Bad Idea is a Bad Investment

August 3, 2017 – by Primo Management Group

Don’t be fooled by supposedly good timeshare deals. The truth is, there’s no such thing.

Tempted to invest in a timeshare? The thought of owning a holiday home may seem appealing but it has its drawbacks.

Once you sign the contract, it’s hard to go back. Unless you keep up with the payments, you’ll face foreclosure.

For many customers, investing in timeshares is an impulsive decision. They’re blinded by the stunning landscapes and low costs. Unfortunately, these deals involve year-round responsibility and hidden fees.

The average sales price of timeshares in the U.S. was $22,240 in 2015. That’s considerably less than buying your own apartment or home. However, there are other fees you need to be aware of.

Considering that most Americans spend $250 to $271 per night when traveling abroad, timeshares look like a good investment. Yet, the risks remain high.

Let’s see how timeshare deals work and whether they’re right for you!

Timeshare Deals at a Glance

Timeshare programs have been around since 1969. They usually involve vacation properties ranging in size from studio units to villas.

Compared to hotel rooms, these properties are more luxurious and comfortable.

The most popular ones are located near beaches and theme park resorts. You can also purchase a timeshare close to ski or golf resorts.

This type of property is furnished and offers everything you need to feel like home. It’s no need to buy a TV, kitchen utensils, or appliances. The maintenance fees are split among owners.

When you sign up for a timeshare, you buy the rights to use the property. It’s not the same as fractional ownership. In this case, you actually own a fraction of the property’s title.

How Do Timeshares Work?

Most timeshare deals are now offered by reputable hospitality chains, such as Hyatt and Disney. This helped the industry become more transparent. In 2014, more than 9.1 million households in America owned a vacation property.

The cost of a timeshare is supported by multiple parties. Each owner can use the property for at least one week per year. Depending on your needs, you can opt for different types of timeshares:

Fixed week – This option allows you to use the property for the same week each year.
Right-To-Use – The parties can lease a property for several weeks each year for a set amount of years.
Floating – With this arrangement, you’re free to choose the time of the year when you’ll use the property.
Points Club – You can earn points and use them each year for booking timeshare properties.
Most timeshare deals give customers the flexibility to rent their part of the property.
For instance, if you’re not able to use the property in a given year, you can rent it to a friend.

How Much Does It Cost?

Contrary to popular belief, timeshares are not cheap.

The costs depend on the property size, location, and amenities. You can expect to pay more or less based on the time of the year when you’ll book the accommodation.

Fees are based on the type of timeshare and may include:

Buy-in costs
Timeshare maintenance fees (utilities, landscaping, upgrades, and more)
Broker commission
Membership fees
Reservation fees
Exchange company fees
Trustee fees
Closing fees
Finance receivables

Each year, timeshare owners pay about $660 in maintenance fees .

The average price for one week can exceed $19,000. Even if you don’t use the property, you still need to pay for maintenance.

Additionally, it’s necessary to support your travel costs. Unless the property is nearby, you must pay for flight tickets. If you’re only allowed to use the timeshare in peak season, the costs add up.

The Cons of a Timeshare

Without a doubt, timeshares have their perks. Unfortunately, the risks outweigh the benefits.

First of all, you might need to get a mortgage to afford this kind of luxury. Timeshares are usually marketed to those who can’t afford them.

Secondly, the costs of timeshare ownership can easily exceed your budget. Besides maintenance fees, there are special taxes, assessment fees, and brokerage fees involved.

According to USA Today, maintenance fees can increase by as much as 12 percent each year. If you choose a more expensive location, such as New York, these annual costs can be as high as $1,200.

Another thing to consider is that sales people may not tell you the whole truth. They will emphasize the benefits and conceal the real costs. Most times, you sign the contract for life. Assuming that you’re able to sell your part, you’ll still lose money.

Just like cars, timeshares lose their value over time. Compared to traditional properties, they don’t increase in value.

It’s enough to do a quick search on eBay to find timeshares available for a few dollars. Many times, owners are willing to sell them for next to nothing just to get rid of monthly payments.

Think about what happens if you have a bad year and can’t go on a holiday. Like it or not, you still need to pay for the timeshare.

What if you opt for fixed ownership?

This means you must spend your vacation at the same time in the same place each year. No matter how much you love the place, you’ll get bored sooner or later.

A more flexible timeshare isn’t necessarily better. You might not be able to trade times and locations as you wish.

Moreover, buying this kind of property in a foreign country has its challenges. For instance, Mexico doesn’t allow foreigners to buy properties along the coast.

As you see, timeshare deals carry lots of risks. There are better ways to spend on travel and plan your dream holiday.

Alternatives to Timeshares

Nowadays, most hotels and holiday resorts offer fantastic deals. You can always check travel comparison sites for hidden gems. Additionally, most hotels offer discounts to those who book longer stays.

If you’re on a tight budget, opt for B&Bs or short-term apartment apartments. Don’t forget about credit card rewards and last-minute deals!

Another option is joining a vacation club. This type of membership provides access to properties worldwide. You’re not forced to pay maintenance fees or travel on specific dates.

Have you ever owned a timeshare? What was your experience like? Share your story below!

 

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Frequently Asked Questions ?

How does PMG get me out of my timeshare contract?

PMG is not a resale, transfer, or donation company. We are consumer advocates—we help to negotiate the release of your timeshare contract obligation. We do not buy, sell, or rent your timeshare. Simply put, we help you to get out of your timeshare contract forever.

How long does the process usually take?

Usually less than 12 months, but it all depends on your situation. If your timeshare is free and clear with no mortgage, then the process may only take 3-9 months.

Speak to your advisor about the time, and what delays the resorts have put into place to prevent timeshare owners from departing their ownership. If you have a mortgage or past due maintenance fee, the process takes more time.

How much is my timeshare worth?

This is probably going to hurt, but whether you paid $5,000 or $50,000 for your timeshare, the IRS values all timeshares as worthless investments. In addition, that timeshare would have negative value due to the annual maintenance fee bill which compounds year after year. That is until PMG helps you cancel your timeshare.

Can I use your service if I still have a balance owed on my mortgage?

Yes. Whether you bought your timeshare 20 days ago or 20 years ago, PMG has a solution for you and is here to help.

Will my name be off the timeshare?

Yes! Permanently! GUARANTEED!

In addition to getting me out of my timeshare, can you recover the money I’ve already spent on mortgage payments and maintenance fees?

While we are able to recover money in rare cases, beware of any timeshare cancellation company that entices you with the promise of fund recovery. The truth is, timeshares are loath to give back the money they’ve already taken.

Are your consumer advocates really “consumer advocates”, or is that just a fancy word for salesperson?

Because most of our clients have had their trust betrayed by timeshare salespeople, we understand how some consumers can become a bit jaded. When you call us for a consultation, that’s exactly what you get, a consultation. At PMG, our job is not to sell you; our job is to help you get out of your timeshare. Which is why we have numerous 5-star reviews and an “A” (excellent) rating from the BCA.

Why should I choose PMG to get me out of my timeshare?

We pride ourselves on providing our customers with the best customer service in the industry. When you contact our company, you speak to a live person, not an automated system or voicemail. We go above and beyond for our customers by helping you to protect your credit and even repair your credit if needed. We offer a 100% money back guarantee, and we can provide documented proof of our success in helping customers just like you.

What happens after I sign up with you? Will I be apprised of your progress?

At PMG, we pride ourselves on our hands-on, boutique-style customer service, so every new client is assigned a case manager whose job is to keep you in the loop throughout the entire cancellation process. Your case manager is always just a phone call away.

How much is your fee?

Not all timeshare experiences are created equal. Some are more complicated than others, and every situation is different. That’s why our trained timeshare elimination consultants will ask you a series of questions designed to determine exactly what needs to be done to terminate your timeshare, how long it will take, and how they can best advocate for you. We will always seek the most cost-effective route for you.

What if I still have more questions?

Canceling a timeshare contract is not a cookie cutter process. With each situation being unique, once you complete the form below an experienced consumer advocate will call you today to discuss your options.