Buying A Timeshare: The Pros And Cons

By Ron Kelemen, Next Avenue Contributor

The purchase of a timeshare — a way to own a piece of a vacation property that you can use, generally, once a year — is often an emotional and impulsive decision.

At our wealth management and planning firm (The H Group), we occasionally get questions from clients about timeshares, most calling after the fact — fresh and tan from a vacation — wondering if they did the right thing. We’ve also had to deal with clients in financial distress wanting to get out of their timeshare units.

If you’re considering buying a timeshare, so you’ll have a place to vacation regularly, you’ll want to understand the different types and the pros and cons.

(MORE: Timely Timeshare Tips for Families)

4 Types of Timeshares

First, a little background about the four types of timeshares:

1. Fixed Week The buyer usually owns the rights to a specific unit in the same week, year in and year out, for as long as the contract stipulates. There is predictability, but also little flexibility and the potential for long-range boredom.

With a fixed-rate timeshare, the owner can rent out his block of time or trade with owners of other properties. This type of arrangement works best if you have a highly desirable location.

2. Floating The buyer can reserve his own time during a given period of the year. This option has more freedom than the fixed week version, but getting the exact time you want may be difficult when other shareholders snap up many of the prime periods.

3. Right-To-Use With this arrangement, the buyer leases the property for a given amount of time each year for a set amount of years. The developer maintains ownership of the property, however.

4. Points Club This is similar to the floating timeshare, but buyers can stay at various locales depending on the amount of points they’ve accumulated from buying into a specific property or purchasing points from the club. The points are used like currency and timeslots at the property are reserved on a first-come basis.

(MORE: Watch Out for Timeshare Scams)

5 Advantages of Timeshares

1. Unlike a vacation home which may be vacant part of the year, you only pay for what you use. Thus, the use of a very expensive property could be more affordable; for one thing you don’t need to worry about year-round maintenance.

2. If you like predictability, you have a guaranteed vacation destination.

3. You may be able to trade times and locations with other owners, allowing you to travel to new places.

4. You may be able to rent out your block of time if you can’t use it, although some timeshare contracts may not permit this and website exchange services may charge you to play matchmaker.

5. You might enjoy letting your friends or family use their timeshare for free or offer it at a charity auction.

4 Drawbacks of Timeshares

1. While you don’t need to worry about maintenance, you will need to worry about the annual fees and your lack of control over their annual increases. The average annual maintenance fee for a timeshare is $660, according to Howard Nusbaum, CEO and president of the American Resort Development Association. You pay that fee whether you use the property or not. In addition, you could be liable for special assessments.  If you don’t pay up, the developer can foreclose on your timeshare.

2. Timeshares are hard to sell, and used timeshare units are sold at a steep discount because there are so many on the market.  Thus, it might be a better deal to buy a used timeshare on the secondary market. Bear in mind that the Better Business Bureau has been warning about timeshare reselling schemes that defrauded victims out of thousands of dollars.

3. If you sell your timeshare at a loss, the Internal Revenue Service doesn’t let you claim a capital loss as you would with other investments and real property.

4. Buying a timeshare in a foreign country presents special challenges. In Mexico, for example, foreigners are not allowed to hold the direct title to property within 30 miles of the coast and 60 miles of international borders. They are limited to “right to use” timeshares.  (There is pending legislation in the Mexican Congress that may change that in the near future.) Also, consumer protection laws in some countries are more lax and lack enforcement.

Pointers for Potential Timeshare Buyers

Still interested in buying a timeshare? Here are a few pointers:

Think of a timeshare purchase as a lifestyle purchase, not an investment.  When you consider depreciation, travel costs and maintenance fees — on top of an uncertainty of use — the concept of “prepaying” for your vacations may not pencil out. Run the numbers.

Analyze your vacation patterns over the past few years. Do you really go to the same place at the same time every year? Or do you have a mix of activities and destinations, such as camping adventures, cruises, road trips or organized tours? If it’s the latter, a timeshare isn’t right for you.

If you must borrow to purchase a timeshare, you have no business buying one. Timeshares depreciate in value very quickly, so most banks will not lend you money to buy them. Often, the developer will arrange financing for you, but at a much higher interest rate than banks that do make the loans. What’s more, usually in a foreclosure, the outstanding mortgage balance and the unpaid maintenance fees are higher than the timeshare’s value, which creates what is called a deficiency. Then, lenders can go after your other assets.

Be wary of timeshare salespeople who answer your questions with a question and won’t be upfront about the purchase price. Another tip along these lines: it’s a good sign if you are offered a grace period allowing you to change your mind and cancel before committing to buying.

You will have more protections if your unit belongs to what is called an owners’ club or association. This is similar to a condominium board, giving the property’s owners a collective voice and strength in numbers. The owners’ club may also be helpful when you try to sell your unit.

Never pay an upfront deposit without having first identified and inspected the particular unit. You don’t want any unpleasant surprises when you show up for your vacation.

If you envision children or grandchildren vacationing with you, will they (or their parents) be able to afford the travel costs? If so, you may wind up not using your timeshare unit or points as much as you expect.

Ron Kelemen is the author of The Confident Retirement Journey and a certified financial planner with The H Group in Salem, Ore. His website is TheHGroup-Salem.com.

Article source: http://www.forbes.com/sites/nextavenue/2014/09/16/buying-a-timeshare-the-pros-and-cons/

Timeshare CEO Wesley Kogelman Elected to CRDA Board of Directors

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Wesley Kogelman BuyaTimeshare.com

Wesley Kogelman, CEO, BuyaTimeshare.com

Canada is our second largest market, next to the U.S., so I would like to share our insights to help advance the Canadian vacation ownership industry

Tampa, FL (PRWEB) September 29, 2014

Wesley Kogelman, president and CEO of online timeshare resale and rental advertising company BuyaTimeshare.com, has been elected to the Board of Directors of the Canadian Resort Development Association (CRDA).

CRDA is an industry-based association that is dedicated to furthering the vacation ownership resort and leisure industries. It was founded over 30 years ago in response to the public’s demand for reliable information about Canadian timeshare products. Focus has since broadened to all aspects of the resort and shared ownership industry.

“The Board welcomes Wes and his representation of an ethical resale industry. Wes has been very supportive of CRDA and will bring a technology perspective to our Board, which is imperative as we continue to look for new ways to connect with the new generation of timeshare buyers,” said Jon Zwickel, president and CEO, CRDA.

“I am honored to have been elected to serve on the CRDA Board and look forward to helping in any way I can. Canada is our second largest market, next to the U.S., so I would like to share our insights to help advance the Canadian vacation ownership industry,” said Kogelman.

Because of the global reach of BuyaTimeshare.com’s industry-leading online timeshare resale marketplace, CRDA executives invited Kogelman onto the Board as the industry trends toward more online interaction with timeshare owners.

“We already have consumers seeking to buy Canadian timeshare products through our website and learning how those consumers interact online is important to the development of the Canadian timeshare industry.”

“Unique visitors to our website from Canada are up 14 percent from last year, with Ontario as the top source market, so interest in the product is clearly on the rise. And with over $2 million in offers to buy Canadian timeshare through our site, we can monitor what is trending when it comes to Canadian products,” added Kogelman.    

The Board election was held during the recent Canadian Resort Conference, CRDA’s annual industry event which was held at the Pantages Hotel Toronto Centre in Toronto, Ontario over September 23-24. The conference brings together an international audience of vacation ownership and resort industry professionals to discuss topics relevant to the Canadian resort marketplace and the purchasing trends of Canadian vacationers.

To find out more about BuyaTimeshare.com, please visit http://buyatimeshare.com.

About BuyaTimeshare.com

BuyaTimeshare.com is an internet advertising and marketing company for owners who seek to sell or rent timeshare. The company has been in business since 2000 and was ranked by Inc. Magazine as one of the fastest-growing, privately held companies in the country—making the prestigious Inc. 5000 list in 2010 and 2011. BuyaTimeshare.com was also listed as one of BusinessNH Magazine’s Top 10 Companies to Watch in 2009. The company is a Trustee Member of the American Resort Development Association (ARDA), represented on the Board of Directors of the Canadian Resort Development Association (CRDA), a member in good standing with the Cooperative Association of Resort Exchangers (CARE), U.K.-based TATOC the Timeshare Association and is a preferred resale provider for the National Timeshare Owners Association (NTOA). For more information, please visit http://buyatimeshare.com or call 1-800-882-0296.

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Article source: http://www.prweb.com/releases/Canadian/timeshare/prweb12203907.htm

Buying A Timeshare: The Pros And Cons

By Ron Kelemen, Next Avenue Contributor

The purchase of a timeshare — a way to own a piece of a vacation property that you can use, generally, once a year — is often an emotional and impulsive decision.

At our wealth management and planning firm (The H Group), we occasionally get questions from clients about timeshares, most calling after the fact — fresh and tan from a vacation — wondering if they did the right thing. We’ve also had to deal with clients in financial distress wanting to get out of their timeshare units.

If you’re considering buying a timeshare, so you’ll have a place to vacation regularly, you’ll want to understand the different types and the pros and cons.

(MORE: Timely Timeshare Tips for Families)

4 Types of Timeshares

First, a little background about the four types of timeshares:

1. Fixed Week The buyer usually owns the rights to a specific unit in the same week, year in and year out, for as long as the contract stipulates. There is predictability, but also little flexibility and the potential for long-range boredom.

With a fixed-rate timeshare, the owner can rent out his block of time or trade with owners of other properties. This type of arrangement works best if you have a highly desirable location.

2. Floating The buyer can reserve his own time during a given period of the year. This option has more freedom than the fixed week version, but getting the exact time you want may be difficult when other shareholders snap up many of the prime periods.

3. Right-To-Use With this arrangement, the buyer leases the property for a given amount of time each year for a set amount of years. The developer maintains ownership of the property, however.

4. Points Club This is similar to the floating timeshare, but buyers can stay at various locales depending on the amount of points they’ve accumulated from buying into a specific property or purchasing points from the club. The points are used like currency and timeslots at the property are reserved on a first-come basis.

(MORE: Watch Out for Timeshare Scams)

5 Advantages of Timeshares

1. Unlike a vacation home which may be vacant part of the year, you only pay for what you use. Thus, the use of a very expensive property could be more affordable; for one thing you don’t need to worry about year-round maintenance.

2. If you like predictability, you have a guaranteed vacation destination.

3. You may be able to trade times and locations with other owners, allowing you to travel to new places.

4. You may be able to rent out your block of time if you can’t use it, although some timeshare contracts may not permit this and website exchange services may charge you to play matchmaker.

5. You might enjoy letting your friends or family use their timeshare for free or offer it at a charity auction.

4 Drawbacks of Timeshares

1. While you don’t need to worry about maintenance, you will need to worry about the annual fees and your lack of control over their annual increases. The average annual maintenance fee for a timeshare is $660, according to Howard Nusbaum, CEO and president of the American Resort Development Association. You pay that fee whether you use the property or not. In addition, you could be liable for special assessments.  If you don’t pay up, the developer can foreclose on your timeshare.

2. Timeshares are hard to sell, and used timeshare units are sold at a steep discount because there are so many on the market.  Thus, it might be a better deal to buy a used timeshare on the secondary market. Bear in mind that the Better Business Bureau has been warning about timeshare reselling schemes that defrauded victims out of thousands of dollars.

3. If you sell your timeshare at a loss, the Internal Revenue Service doesn’t let you claim a capital loss as you would with other investments and real property.

4. Buying a timeshare in a foreign country presents special challenges. In Mexico, for example, foreigners are not allowed to hold the direct title to property within 30 miles of the coast and 60 miles of international borders. They are limited to “right to use” timeshares.  (There is pending legislation in the Mexican Congress that may change that in the near future.) Also, consumer protection laws in some countries are more lax and lack enforcement.

Pointers for Potential Timeshare Buyers

Still interested in buying a timeshare? Here are a few pointers:

Think of a timeshare purchase as a lifestyle purchase, not an investment.  When you consider depreciation, travel costs and maintenance fees — on top of an uncertainty of use — the concept of “prepaying” for your vacations may not pencil out. Run the numbers.

Analyze your vacation patterns over the past few years. Do you really go to the same place at the same time every year? Or do you have a mix of activities and destinations, such as camping adventures, cruises, road trips or organized tours? If it’s the latter, a timeshare isn’t right for you.

If you must borrow to purchase a timeshare, you have no business buying one. Timeshares depreciate in value very quickly, so most banks will not lend you money to buy them. Often, the developer will arrange financing for you, but at a much higher interest rate than banks that do make the loans. What’s more, usually in a foreclosure, the outstanding mortgage balance and the unpaid maintenance fees are higher than the timeshare’s value, which creates what is called a deficiency. Then, lenders can go after your other assets.

Be wary of timeshare salespeople who answer your questions with a question and won’t be upfront about the purchase price. Another tip along these lines: it’s a good sign if you are offered a grace period allowing you to change your mind and cancel before committing to buying.

You will have more protections if your unit belongs to what is called an owners’ club or association. This is similar to a condominium board, giving the property’s owners a collective voice and strength in numbers. The owners’ club may also be helpful when you try to sell your unit.

Never pay an upfront deposit without having first identified and inspected the particular unit. You don’t want any unpleasant surprises when you show up for your vacation.

If you envision children or grandchildren vacationing with you, will they (or their parents) be able to afford the travel costs? If so, you may wind up not using your timeshare unit or points as much as you expect.

Ron Kelemen is the author of The Confident Retirement Journey and a certified financial planner with The H Group in Salem, Ore. His website is TheHGroup-Salem.com.

Article source: http://www.forbes.com/sites/nextavenue/2014/09/16/buying-a-timeshare-the-pros-and-cons/

Buying A Timeshare: The Pros And Cons

By Ron Kelemen, Next Avenue Contributor

The purchase of a timeshare — a way to own a piece of a vacation property that you can use, generally, once a year — is often an emotional and impulsive decision.

At our wealth management and planning firm (The H Group), we occasionally get questions from clients about timeshares, most calling after the fact — fresh and tan from a vacation — wondering if they did the right thing. We’ve also had to deal with clients in financial distress wanting to get out of their timeshare units.

If you’re considering buying a timeshare, so you’ll have a place to vacation regularly, you’ll want to understand the different types and the pros and cons.

(MORE: Timely Timeshare Tips for Families)

4 Types of Timeshares

First, a little background about the four types of timeshares:

1. Fixed Week The buyer usually owns the rights to a specific unit in the same week, year in and year out, for as long as the contract stipulates. There is predictability, but also little flexibility and the potential for long-range boredom.

With a fixed-rate timeshare, the owner can rent out his block of time or trade with owners of other properties. This type of arrangement works best if you have a highly desirable location.

2. Floating The buyer can reserve his own time during a given period of the year. This option has more freedom than the fixed week version, but getting the exact time you want may be difficult when other shareholders snap up many of the prime periods.

3. Right-To-Use With this arrangement, the buyer leases the property for a given amount of time each year for a set amount of years. The developer maintains ownership of the property, however.

4. Points Club This is similar to the floating timeshare, but buyers can stay at various locales depending on the amount of points they’ve accumulated from buying into a specific property or purchasing points from the club. The points are used like currency and timeslots at the property are reserved on a first-come basis.

(MORE: Watch Out for Timeshare Scams)

5 Advantages of Timeshares

1. Unlike a vacation home which may be vacant part of the year, you only pay for what you use. Thus, the use of a very expensive property could be more affordable; for one thing you don’t need to worry about year-round maintenance.

2. If you like predictability, you have a guaranteed vacation destination.

3. You may be able to trade times and locations with other owners, allowing you to travel to new places.

4. You may be able to rent out your block of time if you can’t use it, although some timeshare contracts may not permit this and website exchange services may charge you to play matchmaker.

5. You might enjoy letting your friends or family use their timeshare for free or offer it at a charity auction.

4 Drawbacks of Timeshares

1. While you don’t need to worry about maintenance, you will need to worry about the annual fees and your lack of control over their annual increases. The average annual maintenance fee for a timeshare is $660, according to Howard Nusbaum, CEO and president of the American Resort Development Association. You pay that fee whether you use the property or not. In addition, you could be liable for special assessments.  If you don’t pay up, the developer can foreclose on your timeshare.

2. Timeshares are hard to sell, and used timeshare units are sold at a steep discount because there are so many on the market.  Thus, it might be a better deal to buy a used timeshare on the secondary market. Bear in mind that the Better Business Bureau has been warning about timeshare reselling schemes that defrauded victims out of thousands of dollars.

3. If you sell your timeshare at a loss, the Internal Revenue Service doesn’t let you claim a capital loss as you would with other investments and real property.

4. Buying a timeshare in a foreign country presents special challenges. In Mexico, for example, foreigners are not allowed to hold the direct title to property within 30 miles of the coast and 60 miles of international borders. They are limited to “right to use” timeshares.  (There is pending legislation in the Mexican Congress that may change that in the near future.) Also, consumer protection laws in some countries are more lax and lack enforcement.

Pointers for Potential Timeshare Buyers

Still interested in buying a timeshare? Here are a few pointers:

Think of a timeshare purchase as a lifestyle purchase, not an investment.  When you consider depreciation, travel costs and maintenance fees — on top of an uncertainty of use — the concept of “prepaying” for your vacations may not pencil out. Run the numbers.

Analyze your vacation patterns over the past few years. Do you really go to the same place at the same time every year? Or do you have a mix of activities and destinations, such as camping adventures, cruises, road trips or organized tours? If it’s the latter, a timeshare isn’t right for you.

If you must borrow to purchase a timeshare, you have no business buying one. Timeshares depreciate in value very quickly, so most banks will not lend you money to buy them. Often, the developer will arrange financing for you, but at a much higher interest rate than banks that do make the loans. What’s more, usually in a foreclosure, the outstanding mortgage balance and the unpaid maintenance fees are higher than the timeshare’s value, which creates what is called a deficiency. Then, lenders can go after your other assets.

Be wary of timeshare salespeople who answer your questions with a question and won’t be upfront about the purchase price. Another tip along these lines: it’s a good sign if you are offered a grace period allowing you to change your mind and cancel before committing to buying.

You will have more protections if your unit belongs to what is called an owners’ club or association. This is similar to a condominium board, giving the property’s owners a collective voice and strength in numbers. The owners’ club may also be helpful when you try to sell your unit.

Never pay an upfront deposit without having first identified and inspected the particular unit. You don’t want any unpleasant surprises when you show up for your vacation.

If you envision children or grandchildren vacationing with you, will they (or their parents) be able to afford the travel costs? If so, you may wind up not using your timeshare unit or points as much as you expect.

Ron Kelemen is the author of The Confident Retirement Journey and a certified financial planner with The H Group in Salem, Ore. His website is TheHGroup-Salem.com.

Article source: http://www.forbes.com/sites/nextavenue/2014/09/16/buying-a-timeshare-the-pros-and-cons/

Buying A Timeshare: The Pros And Cons

By Ron Kelemen, Next Avenue Contributor

The purchase of a timeshare — a way to own a piece of a vacation property that you can use, generally, once a year — is often an emotional and impulsive decision.

At our wealth management and planning firm (The H Group), we occasionally get questions from clients about timeshares, most calling after the fact — fresh and tan from a vacation — wondering if they did the right thing. We’ve also had to deal with clients in financial distress wanting to get out of their timeshare units.

If you’re considering buying a timeshare, so you’ll have a place to vacation regularly, you’ll want to understand the different types and the pros and cons.

(MORE: Timely Timeshare Tips for Families)

4 Types of Timeshares

First, a little background about the four types of timeshares:

1. Fixed Week The buyer usually owns the rights to a specific unit in the same week, year in and year out, for as long as the contract stipulates. There is predictability, but also little flexibility and the potential for long-range boredom.

With a fixed-rate timeshare, the owner can rent out his block of time or trade with owners of other properties. This type of arrangement works best if you have a highly desirable location.

2. Floating The buyer can reserve his own time during a given period of the year. This option has more freedom than the fixed week version, but getting the exact time you want may be difficult when other shareholders snap up many of the prime periods.

3. Right-To-Use With this arrangement, the buyer leases the property for a given amount of time each year for a set amount of years. The developer maintains ownership of the property, however.

4. Points Club This is similar to the floating timeshare, but buyers can stay at various locales depending on the amount of points they’ve accumulated from buying into a specific property or purchasing points from the club. The points are used like currency and timeslots at the property are reserved on a first-come basis.

(MORE: Watch Out for Timeshare Scams)

5 Advantages of Timeshares

1. Unlike a vacation home which may be vacant part of the year, you only pay for what you use. Thus, the use of a very expensive property could be more affordable; for one thing you don’t need to worry about year-round maintenance.

2. If you like predictability, you have a guaranteed vacation destination.

3. You may be able to trade times and locations with other owners, allowing you to travel to new places.

4. You may be able to rent out your block of time if you can’t use it, although some timeshare contracts may not permit this and website exchange services may charge you to play matchmaker.

5. You might enjoy letting your friends or family use their timeshare for free or offer it at a charity auction.

4 Drawbacks of Timeshares

1. While you don’t need to worry about maintenance, you will need to worry about the annual fees and your lack of control over their annual increases. The average annual maintenance fee for a timeshare is $660, according to Howard Nusbaum, CEO and president of the American Resort Development Association. You pay that fee whether you use the property or not. In addition, you could be liable for special assessments.  If you don’t pay up, the developer can foreclose on your timeshare.

2. Timeshares are hard to sell, and used timeshare units are sold at a steep discount because there are so many on the market.  Thus, it might be a better deal to buy a used timeshare on the secondary market. Bear in mind that the Better Business Bureau has been warning about timeshare reselling schemes that defrauded victims out of thousands of dollars.

3. If you sell your timeshare at a loss, the Internal Revenue Service doesn’t let you claim a capital loss as you would with other investments and real property.

4. Buying a timeshare in a foreign country presents special challenges. In Mexico, for example, foreigners are not allowed to hold the direct title to property within 30 miles of the coast and 60 miles of international borders. They are limited to “right to use” timeshares.  (There is pending legislation in the Mexican Congress that may change that in the near future.) Also, consumer protection laws in some countries are more lax and lack enforcement.

Pointers for Potential Timeshare Buyers

Still interested in buying a timeshare? Here are a few pointers:

Think of a timeshare purchase as a lifestyle purchase, not an investment.  When you consider depreciation, travel costs and maintenance fees — on top of an uncertainty of use — the concept of “prepaying” for your vacations may not pencil out. Run the numbers.

Analyze your vacation patterns over the past few years. Do you really go to the same place at the same time every year? Or do you have a mix of activities and destinations, such as camping adventures, cruises, road trips or organized tours? If it’s the latter, a timeshare isn’t right for you.

If you must borrow to purchase a timeshare, you have no business buying one. Timeshares depreciate in value very quickly, so most banks will not lend you money to buy them. Often, the developer will arrange financing for you, but at a much higher interest rate than banks that do make the loans. What’s more, usually in a foreclosure, the outstanding mortgage balance and the unpaid maintenance fees are higher than the timeshare’s value, which creates what is called a deficiency. Then, lenders can go after your other assets.

Be wary of timeshare salespeople who answer your questions with a question and won’t be upfront about the purchase price. Another tip along these lines: it’s a good sign if you are offered a grace period allowing you to change your mind and cancel before committing to buying.

You will have more protections if your unit belongs to what is called an owners’ club or association. This is similar to a condominium board, giving the property’s owners a collective voice and strength in numbers. The owners’ club may also be helpful when you try to sell your unit.

Never pay an upfront deposit without having first identified and inspected the particular unit. You don’t want any unpleasant surprises when you show up for your vacation.

If you envision children or grandchildren vacationing with you, will they (or their parents) be able to afford the travel costs? If so, you may wind up not using your timeshare unit or points as much as you expect.

Ron Kelemen is the author of The Confident Retirement Journey and a certified financial planner with The H Group in Salem, Ore. His website is TheHGroup-Salem.com.

Article source: http://www.forbes.com/sites/nextavenue/2014/09/16/buying-a-timeshare-the-pros-and-cons/

Buying A Timeshare: The Pros And Cons

By Ron Kelemen, Next Avenue Contributor

The purchase of a timeshare — a way to own a piece of a vacation property that you can use, generally, once a year — is often an emotional and impulsive decision.

At our wealth management and planning firm (The H Group), we occasionally get questions from clients about timeshares, most calling after the fact — fresh and tan from a vacation — wondering if they did the right thing. We’ve also had to deal with clients in financial distress wanting to get out of their timeshare units.

If you’re considering buying a timeshare, so you’ll have a place to vacation regularly, you’ll want to understand the different types and the pros and cons.

(MORE: Timely Timeshare Tips for Families)

4 Types of Timeshares

First, a little background about the four types of timeshares:

1. Fixed Week The buyer usually owns the rights to a specific unit in the same week, year in and year out, for as long as the contract stipulates. There is predictability, but also little flexibility and the potential for long-range boredom.

With a fixed-rate timeshare, the owner can rent out his block of time or trade with owners of other properties. This type of arrangement works best if you have a highly desirable location.

2. Floating The buyer can reserve his own time during a given period of the year. This option has more freedom than the fixed week version, but getting the exact time you want may be difficult when other shareholders snap up many of the prime periods.

3. Right-To-Use With this arrangement, the buyer leases the property for a given amount of time each year for a set amount of years. The developer maintains ownership of the property, however.

4. Points Club This is similar to the floating timeshare, but buyers can stay at various locales depending on the amount of points they’ve accumulated from buying into a specific property or purchasing points from the club. The points are used like currency and timeslots at the property are reserved on a first-come basis.

(MORE: Watch Out for Timeshare Scams)

5 Advantages of Timeshares

1. Unlike a vacation home which may be vacant part of the year, you only pay for what you use. Thus, the use of a very expensive property could be more affordable; for one thing you don’t need to worry about year-round maintenance.

2. If you like predictability, you have a guaranteed vacation destination.

3. You may be able to trade times and locations with other owners, allowing you to travel to new places.

4. You may be able to rent out your block of time if you can’t use it, although some timeshare contracts may not permit this and website exchange services may charge you to play matchmaker.

5. You might enjoy letting your friends or family use their timeshare for free or offer it at a charity auction.

4 Drawbacks of Timeshares

1. While you don’t need to worry about maintenance, you will need to worry about the annual fees and your lack of control over their annual increases. The average annual maintenance fee for a timeshare is $660, according to Howard Nusbaum, CEO and president of the American Resort Development Association. You pay that fee whether you use the property or not. In addition, you could be liable for special assessments.  If you don’t pay up, the developer can foreclose on your timeshare.

2. Timeshares are hard to sell, and used timeshare units are sold at a steep discount because there are so many on the market.  Thus, it might be a better deal to buy a used timeshare on the secondary market. Bear in mind that the Better Business Bureau has been warning about timeshare reselling schemes that defrauded victims out of thousands of dollars.

3. If you sell your timeshare at a loss, the Internal Revenue Service doesn’t let you claim a capital loss as you would with other investments and real property.

4. Buying a timeshare in a foreign country presents special challenges. In Mexico, for example, foreigners are not allowed to hold the direct title to property within 30 miles of the coast and 60 miles of international borders. They are limited to “right to use” timeshares.  (There is pending legislation in the Mexican Congress that may change that in the near future.) Also, consumer protection laws in some countries are more lax and lack enforcement.

Pointers for Potential Timeshare Buyers

Still interested in buying a timeshare? Here are a few pointers:

Think of a timeshare purchase as a lifestyle purchase, not an investment.  When you consider depreciation, travel costs and maintenance fees — on top of an uncertainty of use — the concept of “prepaying” for your vacations may not pencil out. Run the numbers.

Analyze your vacation patterns over the past few years. Do you really go to the same place at the same time every year? Or do you have a mix of activities and destinations, such as camping adventures, cruises, road trips or organized tours? If it’s the latter, a timeshare isn’t right for you.

If you must borrow to purchase a timeshare, you have no business buying one. Timeshares depreciate in value very quickly, so most banks will not lend you money to buy them. Often, the developer will arrange financing for you, but at a much higher interest rate than banks that do make the loans. What’s more, usually in a foreclosure, the outstanding mortgage balance and the unpaid maintenance fees are higher than the timeshare’s value, which creates what is called a deficiency. Then, lenders can go after your other assets.

Be wary of timeshare salespeople who answer your questions with a question and won’t be upfront about the purchase price. Another tip along these lines: it’s a good sign if you are offered a grace period allowing you to change your mind and cancel before committing to buying.

You will have more protections if your unit belongs to what is called an owners’ club or association. This is similar to a condominium board, giving the property’s owners a collective voice and strength in numbers. The owners’ club may also be helpful when you try to sell your unit.

Never pay an upfront deposit without having first identified and inspected the particular unit. You don’t want any unpleasant surprises when you show up for your vacation.

If you envision children or grandchildren vacationing with you, will they (or their parents) be able to afford the travel costs? If so, you may wind up not using your timeshare unit or points as much as you expect.

Ron Kelemen is the author of The Confident Retirement Journey and a certified financial planner with The H Group in Salem, Ore. His website is TheHGroup-Salem.com.

Article source: http://www.forbes.com/sites/nextavenue/2014/09/16/buying-a-timeshare-the-pros-and-cons/

Buying A Timeshare: The Pros And Cons

By Ron Kelemen, Next Avenue Contributor

The purchase of a timeshare — a way to own a piece of a vacation property that you can use, generally, once a year — is often an emotional and impulsive decision.

At our wealth management and planning firm (The H Group), we occasionally get questions from clients about timeshares, most calling after the fact — fresh and tan from a vacation — wondering if they did the right thing. We’ve also had to deal with clients in financial distress wanting to get out of their timeshare units.

If you’re considering buying a timeshare, so you’ll have a place to vacation regularly, you’ll want to understand the different types and the pros and cons.

(MORE: Timely Timeshare Tips for Families)

4 Types of Timeshares

First, a little background about the four types of timeshares:

1. Fixed Week The buyer usually owns the rights to a specific unit in the same week, year in and year out, for as long as the contract stipulates. There is predictability, but also little flexibility and the potential for long-range boredom.

With a fixed-rate timeshare, the owner can rent out his block of time or trade with owners of other properties. This type of arrangement works best if you have a highly desirable location.

2. Floating The buyer can reserve his own time during a given period of the year. This option has more freedom than the fixed week version, but getting the exact time you want may be difficult when other shareholders snap up many of the prime periods.

3. Right-To-Use With this arrangement, the buyer leases the property for a given amount of time each year for a set amount of years. The developer maintains ownership of the property, however.

4. Points Club This is similar to the floating timeshare, but buyers can stay at various locales depending on the amount of points they’ve accumulated from buying into a specific property or purchasing points from the club. The points are used like currency and timeslots at the property are reserved on a first-come basis.

(MORE: Watch Out for Timeshare Scams)

5 Advantages of Timeshares

1. Unlike a vacation home which may be vacant part of the year, you only pay for what you use. Thus, the use of a very expensive property could be more affordable; for one thing you don’t need to worry about year-round maintenance.

2. If you like predictability, you have a guaranteed vacation destination.

3. You may be able to trade times and locations with other owners, allowing you to travel to new places.

4. You may be able to rent out your block of time if you can’t use it, although some timeshare contracts may not permit this and website exchange services may charge you to play matchmaker.

5. You might enjoy letting your friends or family use their timeshare for free or offer it at a charity auction.

4 Drawbacks of Timeshares

1. While you don’t need to worry about maintenance, you will need to worry about the annual fees and your lack of control over their annual increases. The average annual maintenance fee for a timeshare is $660, according to Howard Nusbaum, CEO and president of the American Resort Development Association. You pay that fee whether you use the property or not. In addition, you could be liable for special assessments.  If you don’t pay up, the developer can foreclose on your timeshare.

2. Timeshares are hard to sell, and used timeshare units are sold at a steep discount because there are so many on the market.  Thus, it might be a better deal to buy a used timeshare on the secondary market. Bear in mind that the Better Business Bureau has been warning about timeshare reselling schemes that defrauded victims out of thousands of dollars.

3. If you sell your timeshare at a loss, the Internal Revenue Service doesn’t let you claim a capital loss as you would with other investments and real property.

4. Buying a timeshare in a foreign country presents special challenges. In Mexico, for example, foreigners are not allowed to hold the direct title to property within 30 miles of the coast and 60 miles of international borders. They are limited to “right to use” timeshares.  (There is pending legislation in the Mexican Congress that may change that in the near future.) Also, consumer protection laws in some countries are more lax and lack enforcement.

Pointers for Potential Timeshare Buyers

Still interested in buying a timeshare? Here are a few pointers:

Think of a timeshare purchase as a lifestyle purchase, not an investment.  When you consider depreciation, travel costs and maintenance fees — on top of an uncertainty of use — the concept of “prepaying” for your vacations may not pencil out. Run the numbers.

Analyze your vacation patterns over the past few years. Do you really go to the same place at the same time every year? Or do you have a mix of activities and destinations, such as camping adventures, cruises, road trips or organized tours? If it’s the latter, a timeshare isn’t right for you.

If you must borrow to purchase a timeshare, you have no business buying one. Timeshares depreciate in value very quickly, so most banks will not lend you money to buy them. Often, the developer will arrange financing for you, but at a much higher interest rate than banks that do make the loans. What’s more, usually in a foreclosure, the outstanding mortgage balance and the unpaid maintenance fees are higher than the timeshare’s value, which creates what is called a deficiency. Then, lenders can go after your other assets.

Be wary of timeshare salespeople who answer your questions with a question and won’t be upfront about the purchase price. Another tip along these lines: it’s a good sign if you are offered a grace period allowing you to change your mind and cancel before committing to buying.

You will have more protections if your unit belongs to what is called an owners’ club or association. This is similar to a condominium board, giving the property’s owners a collective voice and strength in numbers. The owners’ club may also be helpful when you try to sell your unit.

Never pay an upfront deposit without having first identified and inspected the particular unit. You don’t want any unpleasant surprises when you show up for your vacation.

If you envision children or grandchildren vacationing with you, will they (or their parents) be able to afford the travel costs? If so, you may wind up not using your timeshare unit or points as much as you expect.

Ron Kelemen is the author of The Confident Retirement Journey and a certified financial planner with The H Group in Salem, Ore. His website is TheHGroup-Salem.com.

Article source: http://www.forbes.com/sites/nextavenue/2014/09/16/buying-a-timeshare-the-pros-and-cons/

Buying A Timeshare: The Pros And Cons

By Ron Kelemen, Next Avenue Contributor

The purchase of a timeshare — a way to own a piece of a vacation property that you can use, generally, once a year — is often an emotional and impulsive decision.

At our wealth management and planning firm (The H Group), we occasionally get questions from clients about timeshares, most calling after the fact — fresh and tan from a vacation — wondering if they did the right thing. We’ve also had to deal with clients in financial distress wanting to get out of their timeshare units.

If you’re considering buying a timeshare, so you’ll have a place to vacation regularly, you’ll want to understand the different types and the pros and cons.

(MORE: Timely Timeshare Tips for Families)

4 Types of Timeshares

First, a little background about the four types of timeshares:

1. Fixed Week The buyer usually owns the rights to a specific unit in the same week, year in and year out, for as long as the contract stipulates. There is predictability, but also little flexibility and the potential for long-range boredom.

With a fixed-rate timeshare, the owner can rent out his block of time or trade with owners of other properties. This type of arrangement works best if you have a highly desirable location.

2. Floating The buyer can reserve his own time during a given period of the year. This option has more freedom than the fixed week version, but getting the exact time you want may be difficult when other shareholders snap up many of the prime periods.

3. Right-To-Use With this arrangement, the buyer leases the property for a given amount of time each year for a set amount of years. The developer maintains ownership of the property, however.

4. Points Club This is similar to the floating timeshare, but buyers can stay at various locales depending on the amount of points they’ve accumulated from buying into a specific property or purchasing points from the club. The points are used like currency and timeslots at the property are reserved on a first-come basis.

(MORE: Watch Out for Timeshare Scams)

5 Advantages of Timeshares

1. Unlike a vacation home which may be vacant part of the year, you only pay for what you use. Thus, the use of a very expensive property could be more affordable; for one thing you don’t need to worry about year-round maintenance.

2. If you like predictability, you have a guaranteed vacation destination.

3. You may be able to trade times and locations with other owners, allowing you to travel to new places.

4. You may be able to rent out your block of time if you can’t use it, although some timeshare contracts may not permit this and website exchange services may charge you to play matchmaker.

5. You might enjoy letting your friends or family use their timeshare for free or offer it at a charity auction.

4 Drawbacks of Timeshares

1. While you don’t need to worry about maintenance, you will need to worry about the annual fees and your lack of control over their annual increases. The average annual maintenance fee for a timeshare is $660, according to Howard Nusbaum, CEO and president of the American Resort Development Association. You pay that fee whether you use the property or not. In addition, you could be liable for special assessments.  If you don’t pay up, the developer can foreclose on your timeshare.

2. Timeshares are hard to sell, and used timeshare units are sold at a steep discount because there are so many on the market.  Thus, it might be a better deal to buy a used timeshare on the secondary market. Bear in mind that the Better Business Bureau has been warning about timeshare reselling schemes that defrauded victims out of thousands of dollars.

3. If you sell your timeshare at a loss, the Internal Revenue Service doesn’t let you claim a capital loss as you would with other investments and real property.

4. Buying a timeshare in a foreign country presents special challenges. In Mexico, for example, foreigners are not allowed to hold the direct title to property within 30 miles of the coast and 60 miles of international borders. They are limited to “right to use” timeshares.  (There is pending legislation in the Mexican Congress that may change that in the near future.) Also, consumer protection laws in some countries are more lax and lack enforcement.

Pointers for Potential Timeshare Buyers

Still interested in buying a timeshare? Here are a few pointers:

Think of a timeshare purchase as a lifestyle purchase, not an investment.  When you consider depreciation, travel costs and maintenance fees — on top of an uncertainty of use — the concept of “prepaying” for your vacations may not pencil out. Run the numbers.

Analyze your vacation patterns over the past few years. Do you really go to the same place at the same time every year? Or do you have a mix of activities and destinations, such as camping adventures, cruises, road trips or organized tours? If it’s the latter, a timeshare isn’t right for you.

If you must borrow to purchase a timeshare, you have no business buying one. Timeshares depreciate in value very quickly, so most banks will not lend you money to buy them. Often, the developer will arrange financing for you, but at a much higher interest rate than banks that do make the loans. What’s more, usually in a foreclosure, the outstanding mortgage balance and the unpaid maintenance fees are higher than the timeshare’s value, which creates what is called a deficiency. Then, lenders can go after your other assets.

Be wary of timeshare salespeople who answer your questions with a question and won’t be upfront about the purchase price. Another tip along these lines: it’s a good sign if you are offered a grace period allowing you to change your mind and cancel before committing to buying.

You will have more protections if your unit belongs to what is called an owners’ club or association. This is similar to a condominium board, giving the property’s owners a collective voice and strength in numbers. The owners’ club may also be helpful when you try to sell your unit.

Never pay an upfront deposit without having first identified and inspected the particular unit. You don’t want any unpleasant surprises when you show up for your vacation.

If you envision children or grandchildren vacationing with you, will they (or their parents) be able to afford the travel costs? If so, you may wind up not using your timeshare unit or points as much as you expect.

Ron Kelemen is the author of The Confident Retirement Journey and a certified financial planner with The H Group in Salem, Ore. His website is TheHGroup-Salem.com.

Article source: http://www.forbes.com/sites/nextavenue/2014/09/16/buying-a-timeshare-the-pros-and-cons/

Buying A Timeshare: The Pros And Cons

By Ron Kelemen, Next Avenue Contributor

The purchase of a timeshare — a way to own a piece of a vacation property that you can use, generally, once a year — is often an emotional and impulsive decision.

At our wealth management and planning firm (The H Group), we occasionally get questions from clients about timeshares, most calling after the fact — fresh and tan from a vacation — wondering if they did the right thing. We’ve also had to deal with clients in financial distress wanting to get out of their timeshare units.

If you’re considering buying a timeshare, so you’ll have a place to vacation regularly, you’ll want to understand the different types and the pros and cons.

(MORE: Timely Timeshare Tips for Families)

4 Types of Timeshares

First, a little background about the four types of timeshares:

1. Fixed Week The buyer usually owns the rights to a specific unit in the same week, year in and year out, for as long as the contract stipulates. There is predictability, but also little flexibility and the potential for long-range boredom.

With a fixed-rate timeshare, the owner can rent out his block of time or trade with owners of other properties. This type of arrangement works best if you have a highly desirable location.

2. Floating The buyer can reserve his own time during a given period of the year. This option has more freedom than the fixed week version, but getting the exact time you want may be difficult when other shareholders snap up many of the prime periods.

3. Right-To-Use With this arrangement, the buyer leases the property for a given amount of time each year for a set amount of years. The developer maintains ownership of the property, however.

4. Points Club This is similar to the floating timeshare, but buyers can stay at various locales depending on the amount of points they’ve accumulated from buying into a specific property or purchasing points from the club. The points are used like currency and timeslots at the property are reserved on a first-come basis.

(MORE: Watch Out for Timeshare Scams)

5 Advantages of Timeshares

1. Unlike a vacation home which may be vacant part of the year, you only pay for what you use. Thus, the use of a very expensive property could be more affordable; for one thing you don’t need to worry about year-round maintenance.

2. If you like predictability, you have a guaranteed vacation destination.

3. You may be able to trade times and locations with other owners, allowing you to travel to new places.

4. You may be able to rent out your block of time if you can’t use it, although some timeshare contracts may not permit this and website exchange services may charge you to play matchmaker.

5. You might enjoy letting your friends or family use their timeshare for free or offer it at a charity auction.

4 Drawbacks of Timeshares

1. While you don’t need to worry about maintenance, you will need to worry about the annual fees and your lack of control over their annual increases. The average annual maintenance fee for a timeshare is $660, according to Howard Nusbaum, CEO and president of the American Resort Development Association. You pay that fee whether you use the property or not. In addition, you could be liable for special assessments.  If you don’t pay up, the developer can foreclose on your timeshare.

2. Timeshares are hard to sell, and used timeshare units are sold at a steep discount because there are so many on the market.  Thus, it might be a better deal to buy a used timeshare on the secondary market. Bear in mind that the Better Business Bureau has been warning about timeshare reselling schemes that defrauded victims out of thousands of dollars.

3. If you sell your timeshare at a loss, the Internal Revenue Service doesn’t let you claim a capital loss as you would with other investments and real property.

4. Buying a timeshare in a foreign country presents special challenges. In Mexico, for example, foreigners are not allowed to hold the direct title to property within 30 miles of the coast and 60 miles of international borders. They are limited to “right to use” timeshares.  (There is pending legislation in the Mexican Congress that may change that in the near future.) Also, consumer protection laws in some countries are more lax and lack enforcement.

Pointers for Potential Timeshare Buyers

Still interested in buying a timeshare? Here are a few pointers:

Think of a timeshare purchase as a lifestyle purchase, not an investment.  When you consider depreciation, travel costs and maintenance fees — on top of an uncertainty of use — the concept of “prepaying” for your vacations may not pencil out. Run the numbers.

Analyze your vacation patterns over the past few years. Do you really go to the same place at the same time every year? Or do you have a mix of activities and destinations, such as camping adventures, cruises, road trips or organized tours? If it’s the latter, a timeshare isn’t right for you.

If you must borrow to purchase a timeshare, you have no business buying one. Timeshares depreciate in value very quickly, so most banks will not lend you money to buy them. Often, the developer will arrange financing for you, but at a much higher interest rate than banks that do make the loans. What’s more, usually in a foreclosure, the outstanding mortgage balance and the unpaid maintenance fees are higher than the timeshare’s value, which creates what is called a deficiency. Then, lenders can go after your other assets.

Be wary of timeshare salespeople who answer your questions with a question and won’t be upfront about the purchase price. Another tip along these lines: it’s a good sign if you are offered a grace period allowing you to change your mind and cancel before committing to buying.

You will have more protections if your unit belongs to what is called an owners’ club or association. This is similar to a condominium board, giving the property’s owners a collective voice and strength in numbers. The owners’ club may also be helpful when you try to sell your unit.

Never pay an upfront deposit without having first identified and inspected the particular unit. You don’t want any unpleasant surprises when you show up for your vacation.

If you envision children or grandchildren vacationing with you, will they (or their parents) be able to afford the travel costs? If so, you may wind up not using your timeshare unit or points as much as you expect.

Ron Kelemen is the author of The Confident Retirement Journey and a certified financial planner with The H Group in Salem, Ore. His website is TheHGroup-Salem.com.

Article source: http://www.forbes.com/sites/nextavenue/2014/09/16/buying-a-timeshare-the-pros-and-cons/

Bad old days consigned to history as Timeshare concept booms

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She has travelled throughout Australia and had two trips overseas using her Timeshare, plus given away some weeks to family and friends as gifts.

According to Laura Younger, general manager of the Australian Timeshare and Holiday Ownership Council (ATHOC), the Timeshare concept has changed substantially since Ms Middlemass bought 25 years ago. The current incarnation of Timeshare involves a points system, rather than the original ‘sold out resort’ model, where participants became part-owner of a specific resort.

While the original system continues to operate, the new offerings involve purchasing points within a Timeshare group that can be used to stay at any of its resorts, or traded for use at accommodation owned by other Timeshare companies. The points can also be split up to be used a few days here or there, rather than requiring an entire week’s allocation to be used at once.

“If you don’t want to have holidays this year you can bank it to have more weeks in the future, or you can borrow from future weeks if you don’t have enough points now,” Ms Younger says.

“Depending on the (Timeshare) company they are with, they can (also) utilise those points for flights, for meals, for car hire and various other things.”

Ms Younger says the industry is booming and a 2012 Holiday Ownership Industry Economic Impact Study found high levels of consumer satisfaction.

“Over 75 per cent of owners surveyed indicated they were either very satisfied or satisfied with their Timeshare purchase.”

And the bad old days of suspect sales tactics are over with the product now regulated by ASIC, she says.

“It’s sold in a very different manner to the way it was sold in the past.”

Someone who remembers clearly how Timeshare was sold in the past is Peter Hay, managing director of Hay Property Group. Mr Hay witnessed the fallout in the 1980s, when Timeshare first arrived in Australia, as the first owners came to sell and were shocked to discover the market value of their Timeshare bore little resemblance to the price they had paid.

“It worked out that a third was mostly the real estate value, a third was profit to the developer and a third was marketing cost.

“Originally it was viewed as an investment decision but it should have never been viewed as an investment decision. You’re buying a holiday – that’s all you’re doing – you’re not buying property and people get very confused about that.”

Mr Hay’s hot tip for those interested in Timeshare is to buy from a reseller, via platforms like eBay, or online Timeshare resellers, so you aren’t subsidising the developer’s marketing costs and profit margin.

Financial planner Peter Horsfield bought Timeshare from a developer’s presentation back in 2001. “We thought it’s going to be a long-term lifestyle decision that would force us to take holidays because we have to use it.”

The couple have used it, but he’s also aware that the rise of online discount accommodation sites like Lastminute and Trivago is eroding Timeshare’s claim of cushioning purchasers against rising travel costs.

“They do give Timeshare a run for its money.”

In hindsight, Mr Horsfield says he would have bought on the secondary market, like Jenny Idzes and her husband Martin, who sold their Timeshare last year after 14 years’ ownership.

“A friend of ours had Timeshare at Yarrawonga and they were always saying how wonderful it was, so when one came up we thought we would buy it. For $1200, it was cheap to buy and we thought (Yarrawonga) would be our base to bank (time) and go elsewhere,” Ms Idzes says.

But the couple, who are keen caravanners, felt constrained by the lack of accommodation in some parts of Australia and, with a $495 annual maintenance fee plus transfer fees, Mrs Idzes says she found better deals online.

“We put it on the market in May and it sold in July for $2500, but it had four weeks with it. We virtually got back what we had paid for it, plus the weeks.”

What to consider

Will you use it?

Can you afford the associated travel cost?

How many locations does it give you access to?

How far ahead can you book?

How many bedrooms are included?

How many people can stay?

What resort facilities are available?

How does it compare to online offerings?

What are the annual maintenance fees?

Are there housekeeping and transfer fees?

If you don’t use it, can you rent it out?

How long is the lease (if it’s a specific property)?

Buy on the secondary market?

Seek legal advice before buying.






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Article source: http://www.brisbanetimes.com.au/domain/real-estate-news/bad-old-days-consigned-to-history-as-timeshare-concept-booms-20140805-10055l.html

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