By Nick Stoles

If you think only the rich can afford to buy their own vacation home, you’ve probably never heard of timeshares. Timeshares has actually made it possible for average folks to buy a share of a home, a vacation villa, a resort or a condo unit. But are they really worth the investment? Here are things you need to know:

What are timeshares?

A timeshare is one type of real property ownership, in which a person buys a share. This share gives him the right of use for that property. You don’t actually buy the property – you buy the right to use it for a specified period of time. This period of time is fixed, usually a week of every year or every other year, depending on the agreement. This means that for every type of property there is, there are multiple parties that have the rights of usage.

The term ‘timeshare’ can also be used to refer to real properties sold or rented in this manner. They could either be offered as part-ownership or right-to-use/lease. The latter doesn’t give the owner of the share any form of ownership claim to the property.

Why you might want it

A timeshare works well with people who regularly go on vacations each year and/or those who want to own vacation properties. It’s an excellent choice in case you and your family wish to enjoy time off at a particular resort and could mean a lot of savings on your part because the accommodation is already covered by your purchase of the share/s.

A timeshare can also be used in other ways. Depending on the type you bought, you could, for example, rent it out for a profit, sell it or give it as a gift to someone else.

Is it worth the investment?

A timeshare is not exactly an investment in the sense that it does not appreciate in value over time. In fact, in case you want to sell your timeshare in the future, there’s a good chance you might even have to sell it at a loss.

Furthermore, expect to pay for annual expenses to cover for administration, management and maintenance of the property. As to how much this is will depend heavily on the type of unit you have, its location and popularity.

So when is it a good investment?

A timeshare can be worth the investment for you if you travel frequently and stay in hotels. If there’s one or a few locations that you go to regularly or at least several times a year, buying a timeshare can help you save a few hundreds to a several thousand dollars each year.

A timeshare can also be worth the investment if the location is right. If you bought a timeshare resort condo unit in Hawaii but live in Ohio and frequently vacation in Florida or California, it won’t be of much use to you at all. Unless, of course, you rent it out, in which case you could earn. This is what many timeshare owners do, not only to turn a bit of profit but also to pay for their timeshare fees. However, that will depend of course on how popular the location and facilities included in your timeshare are. It will only have a good potential for generating income from rentals if there are people who find it attractive enough to actually rent.

So is a timeshare worth the investment? That will really depend on the type of circumstances involved in your case. Before buying a timeshare, consider the points discussed above so you make a more informed decision.

About the Author: Nick Stoles has contributed many articles on Timeshares topics like alternatives to timeshares. Want more timeshare tips? Visit financecontrols.com for more information.

Source: isnare.com

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