Timeshare Exchange Companies – What They Are and Why Should You Care
3 min read
We always advise clients that they should never approach or think of timeshare ownership as an investment.
There are a lot of salespeople out there who work for timeshare companies who will cite you figures on appreciation or talk about an old owner and how they profited by getting in early and selling their timeshare.
These stories are the exception, not the rule. For the most part, timeshares represent a financial liability.
You are going to end up spending more than you will ever get back. That is just the way it is.
This is fine for people who love to vacation and have some disposable income.
However, it can be ruinous for people who do not have the room in their monthly budget to handle all of the costs of timeshare ownership.
So why do most people want to know how much their timeshare is worth? If you are here reading, it’s probably not because you want to include it as an asset on a financial statement.
That happens, but by far the most common reason people want to value their timeshare is that they want to sell it to someone else.
Either that or they are working on some sort of financial transaction that needs to take a timeshare contract into account.
Knowing how much your timeshare is worth matters a great deal depending on your situation.
Here we explore how you can find out how much your timeshare ownership is worth and why it matters so much.
You have put a lot of money into your timeshare over the years. The total cost of your ownership can easily reach into the $30,000 range.
If you’re looking to sell or if someone else has expressed interest in purchasing your contract, you want to do everything you can to maximize its value and recoup any costs.
There are scenarios in which you can even profit from the sale of a timeshare contract, but those are rarer and are usually tied to very high-demand locations at the higher-end of the timeshare luxury scale.
Getting to the bottom-line figure requires a bit of legwork on your part. You must do some market research to see what similar units and contracts are going for.
The price you will be able to command for your timeshare will depend on whether you have got floating weeks or set dates every year, how large your unit options are, and where the vacation locations are.
Of course, the better amenities and the more flexibility your timeshare has, the more you will likely be able to sell it for.
Unit Type – Is your timeshare a one-bedroom or a three-bedroom with multiple bathrooms and an ocean view?
The type of unit you have access to is a major part of your timeshare’s value.
Better views and larger units command higher prices than smaller places with a garden view.
Things like proximity to the beach and distance to nearby shopping and restaurants will also influence the price.
Location – Where is your timeshare located? If you have access to some prime vacation locations, your contract will be in higher demand on the secondary market.
Timeshares in Hawaii will fetch more than something at a local beach in Georgia. It’s all about desirability.
The city and country your timeshare is located in isn’t the only thing that matters as well. A beach view is a lot different than a beachfront unit.
Season Access – The time of year you can book dates will also play a big part in computing your timeshare’s worth.
Going somewhere during the offseason where the weather and other conditions aren’t ideal will shrink your price tag a bit.
However, if you’ve got a timeshare with dates around Christmas or in the middle of the summer, then you’re going to get paid a larger amount.
Property Amenities – The amenities available at the timeshare properties can boost your value.
Things like on-site pools, BBQs, function rooms, gyms, private beaches, saunas, restaurants, and other facilities all play a part in what your timeshare is worth.
Certainly, the more amenities, the better. Some of the highest-end timeshares have things like gold courses and ski lifts, some even have water parks.
What you get out is often in direct correlation to what you put in when you made the purchase.
The popularity of points-based timeshares makes determining an exact value difficult. There are a lot of moving parts in complex timeshare contracts.
Some people use exchange companies to assist in valuing what theirs is worth.
They will have a lot more experience with timeshare sales and exchanges and will likely have done a transaction involving a unit and options like yours in the recent past.
Talk to them to find out what you can reasonably expect to get for your timeshare. It will at least put you in the general ballpark.
Believe it or not, but the popularity or name recognition of your timeshare will also impact its value on the resale market.
You may have a premium timeshare, but if it’s not one of the properties listed prominently on RCI, Interval International, and other popular exchange company listings, then it’s going to drop in value.
There is some premium that comes with what’s known as trading power or the ease with which your timeshare can be exchanged with someone else.
If you’re interested in giving the timeshare resale market a try, one thing you can do beforehand is to talk to a timeshare appraisal company.
These firms specialize in helping timeshare owners know what their contract is worth before they either exchange or sell their timeshare.
Timeshare appraisal companies will factor in all the components we’ve already gone over.
They’ll also look at things like what type of ownership it is (floating, flex week, fixed, etc.) to give you a final value.
Unfortunately, the appraisal of a timeshare is different than an appraisal done on a home or a commercial real estate property.
It’s more of a snapshot at the moment the appraisal is done.
Most brick-and-mortar property owners can expect gradual appreciation in their assets.
What you paid for your home two decades ago is likely much less than what you can sell it for now.
This is not always the case with timeshares. There’s a lot more at play with timeshare values, which makes the appraisal a bit more similar to appraisals done on condos in apartment complexes.
There, you have to consider things like how the overall property has held up, how well management runs the property and other subjective factors.
A timeshare that was hot five years ago may have fallen out of favor recently and can no longer command a high price on the resale market.
Why do you need to know what your timeshare is worth? For the most part, it is only necessary if you’re looking to sell or exchange it.
Tracking how much your timeshare is worthwhile you are enjoying it doesn’t serve much purpose since it’s rarely an appreciating asset.
Don’t be consumed by how much you could sell it for if you aren’t planning on selling it.
What’s the point? Just enjoy the wonderful vacations it provides for you and your family.
It’s a bit like people who obsess about the value of the home they live in while they’re living there.
They track it meticulously every month based on what the real estate websites say their home is worth.
It doesn’t matter, though, because they’re living in the home. The value only matters when it comes time to sell. Getting tied up in how much something is worth can be a waste of time.
If, however, you need to shed your contract or are interested in an exchange, knowing the value will help you get top dollar and put you in a better position.
You will be able to maximize your exchange into something better or get rid of an onerous contract obligation you no longer use or get pleasure out of.
Who knows, you could end up capitalizing on a situation and finding yourself in a new timeshare that suits your needs much better than your old contract.
That happens all the time. There are thousands of stories where people found an amazing timeshare at a fantastic price and it’s been a great source of happiness.
Whatever your reason for getting out of a timeshare contract, there are experts ready to help you navigate what can be a complex process.
They can help you find out what your timeshare is truly worth and what it takes to make an exchange or a sale.
If you’re planning on donating your timeshare to charity, understanding its value will help you list the right donation amount when it’s time to file your taxes for the year.
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