If you've seen the advertisements for vacation properties that tout unnaturally-low prices, you could be looking at a timeshare ad. Timeshares, also called fractional ownership, allows buyers to get a small slice of the vacation pie for an affordable price. To find out what you need to know, read on.
Why is the Price for Timeshares So Cheap?
The affordable price is due to the fact that you don't actually own the property at all. What you are buying is a certain time period to use during the year. The number of weeks, the price, the extras you must pay for outside of the cost, and other issues vary depending on the agreement. For example, for a given price you are able to have full and private use of a certain property for a week or two each year. During the remainder of the year, others use the space in the same way. You can usually trade units with others and trade for different times as well.
Where are Timeshares Located?
This way of owning a vacation property is an alternate way to stay in a resort. In many instances, these properties are in popular destinations that command high prices if you were to stay and pay for the property by the night. In fact, one of your first acts when considering a timeshare is to compare the cost you are paying to the cost of staying at a like property each year. The benefit is that the cost is locked in whereas condominium rentals increase in price over time. This can be the perfect solution for those who love a certain resort area but cannot afford to pay for property that is 100% owned.
Red Flags and Precautions
One of your best moves is to speak to a local real estate agent about the market in the area. Find out about the complexes that are in decline and the ones that are well-maintained and popular. You don't want to make this big financial move only to find out that the elevators seldom work or that crimes are rampant there. Other tips:
1. Find out about fees for cleaning services between guests.
2. These units may experience a lot of coming and going from various guests, so find out about the cost and methods for updating, maintenance, and repairs of the properties.
3. If the resort has amenities like pools and golf courses, find out about the fees to expect in that regard.
4. Determine whether or not you will use the unit every year. These units can be sold, but not as easily as owned units. Speak with a local real estate agent for the inside information on timeshare vacation homes for sale.