Timeshare Tax Deductions – Complete Guide
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If you’ve never owned a timeshare or you’re a relatively new owner, you may not be aware that there are exchanges on which you can swap your timeshare with other owners.
It’s a fantastic asset to the timeshare community because it grants greater flexibility for owners whose priorities or financial situations change.
For example, let’s say you own a one-bedroom timeshare that you purchased years ago.
Time has passed and now you have multiple children. You can still cram into the one-bedroom unit every year or every other year, but things are not all that comfortable.
Now you’re thinking about an upgrade, but your timeshare provider is being difficult, and you want to pay for two contracts. What can you do?
With a timeshare exchange company, you can list your timeshare and swap it with someone else looking for a change.
In our pretend scenario, you could match up with a retired couple who now only travel as a couple instead of bringing along their kids and want to save money by downsizing the size of their unit.
These exchange companies specialize in matching timeshare owners who are looking for something different. This is all possible with the right exchange.
Let’s take a look at what timeshare exchange companies are and why you should care no matter where you are in the timeshare ownership journey.
There are a lot of timeshare exchange companies. The two largest, however, are Interval International and RCI.
These are the largest databases of available timeshares, and over the years, these exchanges have built a reputation for having the most options and smoothest transactions.
You may be able to find success on some other timeshare exchange, but it’s almost like going car shopping at a small local dealer vs a national chain like CarMax. You may find what you’re looking for at the smaller operators, but odds are lower.
If you’re looking to swap your timeshare by either upgrading or downgrading, RCI and Interval International are your best bets.
They’ve refined the listing and search functions well enough that browsing is easy. Timeshare owners also have a range of different arrangements they can make with other owners.
Timeshare exchange companies have grown to offer a range of different options to owners.
Exchanges are a great place for people to look for different vacations if they feel a little burnt out from going to the same places every year.
Maybe an owner wasn’t able to get the exact dates of their scheduled vacation and want to see if they can trade with someone else for a unit on better dates.
Temporary trades or one-time deals where timeshare owners trade dates or resorts are referred to as swaps.
These aren’t permanent changes in ownership, but a way to create added flexibility in what can be rigid contracts.
In a tight market, booking prime dates at the best resorts can be extremely competitive.
If you’ve missed that small window of booking, then you can look on exchanges for the dates you want.
Let’s say that for the past four years you’ve gone to Hawaii every summer. Hawaii is tough to beat, but perhaps this year, for your anniversary, you want to take your special someone to Paris.
While it’s impossible with your current timeshare contract, odds are someone who’s got a place booked in Paris every year is dying for a chance to dive into the ocean off the coast of Hawaii.
With a bit of work and some negotiation, both of you can have the vacation of a lifetime.
Timeshare owners love swaps. It’s a terrific way to gain access to more resorts without having to spend the extra cost of a premium timeshare every year.
It’s way better than jumping in and upgrading your current contract. That’s a quick way to find yourself overextended financially and with too many dates to use in a year.
We all know someone who has purchased a timeshare that they can’t take advantage of every year.
Swaps allow you to go to new destinations and check out different resorts before you decide to buy. You can dip a toe in first to see what you like.
While every year thousands of timeshare owners enjoy the benefits of timeshare swaps, exchanges are also one of the best places to arrange for permanent changes in ownership.
This can be done either via trade or sale. Typically, trades are done between two different parties that own separate timeshares.
Sales are usually between a person who has a timeshare and someone who doesn’t want to buy one brand new.
Before you jump onto the exchange looking to sell your timeshare or to buy one from someone else, you will need to know what it’s worth.
Here are some of the basic components of determining timeshare prices.
Location – Where the timeshare is located matters a great deal. The same-sized unit on the beach in Hawaii is going to be a lot more expensive than a garden view unit in a small resort in Georgia.
The resorts you have access to, where the unit is located, and how far it is from popular tourist destinations, the beach, shopping, restaurants, and other attractions will affect its resale value.
Unit Type – Bigger units are generally more expensive than smaller units. However, much like normal real estate, newer properties with nicer amenities, fixtures, and other finishes can command higher prices.
If you own a timeshare that gets you into the nicest resort in Tahiti, it will cost a pretty penny even if it’s a smaller unit.
The view and the configuration of your timeshare units will also impact the price. Things like ocean views come at a premium.
Season – Whether you have fixed dates or floating dates, annual or semi-annual bookings, and other stipulations will influence the value of a timeshare.
The more points you have and the greater flexibility built into a contract, the higher the price will be.
Amenities – Premium buyers want access to premium amenities like pools, golf courses, spas, nice restaurants, and all of the other trappings of a high-end resort.
Basic timeshare contracts will bring basic prices, and the more amenities you have or are looking for, the more you can expect to pay.
There are other considerations when calculating the value of a timeshare, however, these are the basic components that most buyers and sellers consider before selling or purchasing.
If you’re interested in getting a professional opinion on the value of your timeshare, there are appraisal companies that specialize in assigning a value to timeshares.
This will cost you money, but it will save you from listing your timeshare on an exchange at too low a price.
Most timeshare owners have heard a salesperson go on about how easy timeshares are to exchange or sell.
That’s not always the case. Before you jump on a timeshare exchange ready to spend or list your unit and dates, here’s what you need to know.
First, timeshare exchanges cost money. Most charge a membership fee to gain access to listings and the ability to communicate with other owners.
You’ll need to pay this upfront to create a profile and arrange a swap or a sale.
Second, there is some risk involved in using a timeshare exchange. While the larger exchanges go to lengths to ensure their members are protected and prevent scams, there are regular reports of people being taken advantage of.
If something looks too good to be true, it may be. Move slowly as you go through any transaction and ask for verification and pose questions about anything, you’re not sure of during the process.
Be Flexible – Timeshare exchanges have benefitted owners overall. However, some owners get frustrated because they can’t find exactly what they want.
Most often, these are people who look at their timeshare as a financial asset and they are trying to maximize the value and squeeze every penny out of their contract.
That’s fine if you’re willing to put in the time researching available options and understand what your offering is worth.
However, most people find more satisfaction through using the exchanges to go places and experience things they wouldn’t have been able to otherwise.
The largest timeshare exchange companies have millions of members worldwide and connections with thousands of resorts across the globe.
It adds flexibility to what is generally thought of as a rigid vacation system full of stories about people who wasted their bookings because they couldn’t make the dates work.
With exchanges, this is can be a thing of the past.
If you’re interested in trying out new destinations, it may be worth just paying the exchange membership fee to see what’s out there.
In a matter of hours, you can have a firm grip on what range of unit, dates, and location you can get in a swap.
It’s a great way to break out of the routine and try something new.
How to choose the right company to get me out of my timeshare
We know how stressful timeshare contracts can be. What once sounded like a dream resort package turned into a nightmare. When you don’t know where to turn, look to PMG to relieve you of your timeshare burden. We pride ourselves on open, honest, and frequent communication with our clients.
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