Buying a Timeshare - A Good Vacation and A Good Investment

There are several key factors you must consider in order to avoid overpaying for timeshare resales. In this article you'll learn the steps necessary for you to learn how to minimize your costs - yet still buy a timeshare that has powerful exchange value through RCI and Interval Int'l.
1. Understand Resort Ratings.
If you want to get the most timeshare for the money do NOT insist that the resort be rated Gold Crown or 5-Star.
Contrary to popular opinion, a resort rating of Gold Crown or 5-Star has little to do with exchange power. Why pay more than you need? Non rated resorts in high demand areas will trade just fine into Gold Crown and 5-Star resorts.
There is a myth out there that you have to own Gold Crown or 5-Star to exchange for same. This is not true. In fact ownership in rated resorts can actually LIMIT your exchange!
2. Buy in a High Demand Area.
By far the single most important factor in determining trade power is location, location, location!
Remember that past demand for a particular resort is the key factor built into the exchange company software which determines what you will be offered in exchange.
Examples of high demand areas are Hawaii, California Coastal, Palm Springs Winter, Florida Coastal and Orlando, the Caribbean, Cancun, Cabo San Lucas, Myrtle Beach, Hilton Head Island, ski areas, - in short, any area that is short of timeshare space relative to a high number of people wanting to vacation in that area.
3. Buy Prime Season
If you buy prime season, you won't be restricted as to what time of the year you can request to exchange - you can request any time of year for your destination resort.
4. Buy in a Resort That Has a Reasonable Maintenance Fee.
Since maintenance fees go on forever, don't buy in a resort with an extra high maintenance fee. (Unless perhaps you can buy truly below bargain-basement price.)
5. Buy as Inexpensively as Possible.
Remember that your goal is to minimize your cost; It is easy to lose focus and start assigning importance to features that have nothing to do with how well the timeshare will exchange.
You may not even like the timeshare, but who cares?
If it is located in a hotly-demanded area and you buy inexpensively, it will serve well to trade you into the finest resorts. When you save thousands of dollars by buying it, you can trade for may decades before the exchange fees would equal what you saved by buying right in the first place!
6. Buy Through a Licensed Resale Broker.
It can hardly be imagined the number of problems and challenges that come up in performing what would seem to be a very simple transfer of ownership.
A licensed Broker has a lot to lose if dealing fraudulently with the public, unfortunately the same cannot be said if you deal with individual sellers or non-licensed companies, so why do it? Be sure all funds are held in a Trust Account until closing.
7. Receive Title Insurance, If it Is Available.
Title Insurance is available on most deeded timeshare purchases. It is your assurance that you are receiving clear title with no liens or judgements attached to the property.
8. Verify the Details of Your First Year's Use.
Many misunderstandings in a timeshare purchase center around as to when the buyer can first use the timeshare, whether the week is banked, and many other details. Whatever your understanding is, have it verified in writing with the exchange company, the resort management company, and the seller.
9. After the Sale Closes, Verify That the Change of Ownership Gets Done on the Resort Computer.
This is a crucial step, because it is common for the resort to either take a long time, or forget entirely to make the ownership change on the computer.

The Seawatch at Island Club has received the “Resort of the Year” award from SPM Resorts.

Located in Hilton Head Island, South Carolina, this resort is among 36 SPM resort properties with more than 100,000 members. It is the fifth time this resort has won this award, including 2004, 2005, 2006 and 2010. The resort has been managed by SPM Resorts since 1996 and has been recognized by RCI with the Gold Crown award for 11 consecutive years. Since 1979, SPM has offered professional management services to timeshare resorts, hotels, restaurants, marinas and other resort properties and is dedicated to ensuring a positive vacation experience for guests and owners. Their portfolio includes financial and accounting services, rentals, resales and communications for owners and boards of directors.

Buying Your First Timeshare

Buying your first timeshare shouldn’t be anything to be afraid of as long as you enter the process prepared. The timeshare was born out of a good idea but has gotten somewhat of a ‘bad rap’ over the years because of unscrupulous marketers taking advantage of ‘fine print’ and slick sales tactics but there’s nothing intrinsically wrong with buying a timeshare as long as you know what you’re doing.
First of all, a little background:

“Timeshare” means exactly what it says. It’s when several people share, over the course of a year, the use of a desirable piece of property, usually a condo unit, apartment, bungalow or cottage of some sort. Sometime it’s a free standing unit and sometimes it’s one unit of a multi-unit building…..it just depends.

What has tarnished the reputation of the timeshare industry has been the public misunderstanding of the fees involved (specifically the ‘maintenance fee’), the difficulty in reselling or transferring them to somebody else in the event you decide you don’t like or want it anymore, and the sales tactics of many of the companies who sell them.

The problem with the ‘maintenance fee’, in essence is the fact that you have to pay it whether you use the unit or not. It doesn’t look like much when expressed on a daily (AKA: ‘per diem’) basis but remember that you pay it for the whole year whether you use the unit or not. And sometimes it can escalate with cost of living and/or other factors.
Looked at from the timeshare company’s viewpoint, this what makes timeshare sales so attractive to them…i.e they get to sell the same piece of property 52 times to 52 different buyers (timeshares are generally for one week periods).

That being said, timeshares can still be a good investment because they are generally kept up very well, you usually get amenities in timeshares that you wouldn’t get in most hotels and (as already mentioned) sometimes the timeshares are in areas where you otherwise could never vacation.
If you buy a timeshare you need to plan very carefully….i.e. plan where to buy, what company to buy from, read your contract very, very carefully, be sure you understand everything in your contract, and be sure you can afford the lifetime cost of the contract.
Be sure that you really, really like the area where your timeshare is because, depending on a variety of factors, you may not be able to exchange it for a timeshare somewhere else later. There are associations within which timeshare owners can exchange timeshare units amongst themselves, but again, this just adds to the complexity of timeshare ownership.

You also need to be very careful of the company you purchase your timeshare from. Some companies have very bad reputations due to shady, high-pressure sales tactics. Even though all US states and even Mexico have mandatory ‘cooling off’ periods during which you can cancel, companies have ways of trying to get around them too if they want to. Your best bet is just to not deal with companies with bad reputations.
Last but not least, be sure you read every sentence in your contract. It’s a legal document and you can be sure that it was put together by a very sharp lawyer who does not work for you but rather for the timeshare company. In fact, he/she probably got a timeshare unit thrown into their compensation package.

There is one way to seriously tilt the odds in your favor though if you really, really want to own a timeshare. There is a huge market of ‘used’ or resold timeshares available. Just like so many other things, the best place to find them is ‘on the net’.
In these situations somebody wants to get out of their existing contract or sub-lease their time). Regardless of their reason for wanting ‘out’….you can get timeshares for pennies on the dollar this way. In most cases, it’s the same unit that other buys are paying more money for. Just like in real estate….you might find a unit that somebody just simply doesn’t want. Their loss is your gain and you’re usually doing them a favor by taking the unit off their hands.
But again….be careful what you sign. Once you do…enjoy your vacation!