5 Important Things to Know Before You Buy a Timeshare
About half of Americans have unused vacation days. If you don’t want your hard-earned time off to go to waste, then you should look into getting a timeshare! Timeshares can be a great way to get extra vacation time each year, but they’re not for everyone. Before you make any decisions, it’s essential to know the facts. You need to understand all the pros and cons that timeshare agreements bring to the table. To help you out, we put together this list of the top things you need to know before you buy a timeshare.
Read on to learn the most important things to learn before you get a timeshare!
1. Cost of Buying a Timeshare
Before buying a timeshare, the first thing to find out is precisely how much the timeshare will cost you. You can start by determining the final purchase price. Exactly how much you’ll have to pay upfront can vary, but it’s not uncommon for additional fees and taxes on the purchase price.
Talk to the resort about the ongoing fees as well. Monthly payments, or dues, are standard and help maintain the property. You’ll also want to find out about special assessments.
What are the initiation fees? This is another cost you’ll want to be aware of. These fees can range from a few hundred dollars to several thousand and are typically charged by the developer or management company when you first purchase your timeshare.
You’ll be paying the monthly dues each month to keep your timeshare. This cost can vary depending on the resort, but it’s typically a few hundred dollars.
Occasionally, resorts will levy special assessments to cover costs like repairs or upgrades. These assessments can range from a few hundred dollars to several thousand, so it’s essential to be aware of them before you buy.
The good news is that you usually expect to recoup some of your costs through rental income. Many find they can rent out their timeshare weeks for an excellent return on investment. Be sure to ask about the resort’s rental policy and what returns you can expect.
2. Timeshare Rental Rules
One of the benefits of owning a timeshare is that you can often rent it out for an excellent return on investment. But before you buy, be sure to understand the timeshare rental rules.
Be sure to ask about the resort’s rental policy and what returns you can expect. By understanding the costs and rental rules associated with owning a timeshare, you can decide whether or not this type of vacation property is right for you.
What is the resort’s rental policy for your timeshare unit? Can you rent it out for any week of the year? Will you have to pay a commission?
These are essential questions, as the answers can impact how much money you’ll make from renting your timeshare. Typically, resorts will allow owners to rent their units out for any week of the year. Still, some may require a minimum stay or charge a commission.
A minimum stay means you’ll have to reserve an alternate unit for several nights. One of the reasons resorts do this is to help maintain total capacity. They don’t want to let units sit empty since this can be a significant expense.
Why would you have to pay a commission? The commission is typically charged by the resort to rent out their units. This fee can range from 10-25% of the rental income, so it’s important to factor it into your calculations.
3. How Does Your Agreement Work?
How will you be able to use your timeshare? If you want to know how to buy a timeshare you can re-rent or barter with, you’ll need a plan that can accommodate.
Some timeshares can only be used during certain times of the year, while others offer more flexibility. If you’re looking for a specific time or location to use your timeshare, clarify this before you buy.
Here’s a short list of the different types of timeshares:
- Fixed Week Timeshare
- Fractional Ownership
- Timeshare points vs. weeks
- Floating Week Timeshare
- Open Season Timeshare
- Resort Seasonal Timeshare
Are you thinking about getting a fixed week timeshare? This type of timeshare grants you the same week every year at the resort. It’s great for vacationers who enjoy consistency.
How do fractional ownership agreements work? They give you a set number of days to use your timeshare each year.
One of the best options is to go with a points-based timeshare. With this option, you earn points yearly that you can use for a reservation at a specific resort.
There’s also the floating week option. This grants you access to any week in a particular season at the resort.
What about open-season options? As the name suggests, this type of timeshare has no specific periods. It is available on a first-come, first-served basis.
You could also look into a seasonal resort approach. A seasonal approach is similar to the floating week timeshare but with a specific range of dates that you can use your timeshare.
4. Unit Size and Capacity
As you get ready to buy a timeshare, find out how big the unit is. Then find out how many people it can house.
Some units are small, while others can accommodate a large group of people. If you have a big family or like to travel with friends, be sure to find out the unit size before buying.
You should also ask about the maximum capacity of the unit. Some resorts restrict how many people can stay in a timeshare at one time. This can be important if you plan to travel with a large group.
Floor Plan Layouts
What type of floor plan do you want? You can check out these studio layouts for inspiration.
Some resorts have a variety of layouts to choose from, while others are limited. Ask about this before purchasing if you’re not keen on a specific layout.
Some of the best layouts include a bedroom and living room area, while others have 2 bedrooms and a living room. Some studios are also available, which can be perfect for couples or small families.
Be sure to ask about the kitchen and bathroom situation, as well. Some units have full kitchens, while others only have a small kitchenette.
A kitchenette is a small kitchen with a sink, refrigerator, and cooking surfaces, such as a hot plate or microwave. It usually doesn’t have a stove or oven.
A full-sized kitchen has all of the abovementioned appliances and a dishwasher, sink, stove, and room for a small dining table. The same goes for bathrooms – some have a full bath while others have just a shower.
5. How Does the Cancellation Policy Work?
Let’s say you find the perfect timeshare agreement. However, something goes wrong, and you need to back out. Will your resort let you cancel the whole deal?
If you need to cancel your timeshare agreement, be sure to know the cancellation policy. Some agreements are quite strict, while others offer some flexibility.
It’s essential to know the cancellation policy before signing anything. You don’t want to be stuck with a timeshare you can’t use.
In most cases, the resort will charge you a timeshare cancellation fee. The fee will be based on the cost of re-renting your unit. It can sometimes be as much as 50% or more of your contract.
You could wind up paying hundreds of dollars for a vacation you don’t even get to enjoy. To avoid these fees, make sure you are absolutely sure that you want to purchase a timeshare.
If you need to cancel your timeshare for any reason, be sure to do so as soon as possible. The longer you wait, the more money you’ll pay in cancellation fees. Talk to the resort directly and ask about their specific policy.
When canceling a timeshare, ask about the resort’s policy on re-renting the unit. In some cases, they may charge you a fee for doing so.
The fee could amount to hundreds of dollars, so be sure you’re aware of the costs. Canceling a timeshare can be expensive, so be sure you’re absolutely certain that you want to go through with it.
Is It Worth It to Buy a Timeshare?
Purchasing a timeshare can be a big decision, so asking the right questions is essential before signing any paperwork. By knowing exactly what to expect when you buy a timeshare, you can avoid surprises down the road.
Be sure to read through the cancellation policy and re-renting policy before purchasing. These are 2 of the most essential factors to pay attention to.
Then start looking for an agreement that suits your budget and vacation needs! If you’d like more tips, just check out another one of our posts.