Avoid Timeshares: Here's Why
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Have you ever considered acquiring a timeshare property? You're not alone; a timeshare plan is perfect for people who frequently travel to a specific destination, are looking for shorter vacations, or whose vacation weeks don't change regularly. However, something that many don't think about is the profitability of a timeshare. A timeshare is a long-term commitment with monthly maintenance fees, and it can only be used for a few weeks each year, significantly reducing its utility. It's best to avoid timeshares for these and many other reasons that we'll see below.
- What is a timeshare?
a. Types of timeshare plans - Risks associated with timeshare ownership and how to avoid them
a. Timeshare-related scams
b. Types of timeshare scams - Value of timeshares
a. Costs of timeshares - Getting rid of a timeshare
a. Methods for getting rid of a timeshare
i. Selling or renting
ii. Giving away or donating
iii. Cancellation
iv. Why is cancellation your best option? - Conclusion
What is a timeshare?
A timeshare is a type of contract in which the buyer acquires the right to use a property in a resort for certain weeks of the year. It's ideal for people who have a preferred destination. There are various types of timeshare plans, varying in the number of days the property can be used and the duration of the buyer's rights over it. It's always advisable to thoroughly research the different types of plans and understand which one best suits your needs as a buyer.
Types of timeshare plans
- Fixed Week and Unit: The buyer acquires a property to use during a specific week of the year, with the option to sell, rent, exchange, or donate the property as they choose.
- Right to Use: The buyer obtains the right to use a property in one or more developments for a specific period. When the contract ends, the property's rights return to the developer. This type of plan is often sold as part of vacation club memberships.
- Points Program or Vacation Club: Instead of buying the property directly, the buyer acquires points that can be spent on properties affiliated with the program. Different point amounts provide access to various suites and areas of the property, with the cost of points varying based on demand, season, location, and amenities. This approach is more flexible than other plans.
- Fractional Ownership: The buyer doesn't acquire the entire property but only shares of it, while the rest remains owned by a company. This can result in a more economical plan than others.
- Units with Lock-Off or Lock-Out: This plan allows owners to use part of their time on the property on one date and the other part on another date. There are two modes:
- Fixed Time: The unit is purchased for use in specific weeks.
- Floating Time: The buyer can stay in the property during their chosen period, but must select the week in advance based on availability.
- Split Week: The stay is divided into two or three separate visits, ideal for those looking for short vacations or getaways.
- Biennial or Alternating Use Ownership: Allows the use of the property every two years.
Risks associated with timeshare ownership and how to avoid them
Buying a timeshare carries risks, even if done with a reputable company, from rising costs and maintenance fees over the years to not being able to use the property during available weeks (making your payments useless). Buying a timeshare is, quite literally, a loss of money.
Timeshare-related scams
Apart from the fact that timeshares themselves are a money sink, the market is filled with scams and legally dubious sales techniques. Some common scams include:
Types of timeshare scams
- Verbal Promises about the Plan: In Mexico, verbal promises have no legal value unless they are included in the contract. To avoid being sold something based on empty promises, it's essential to read the contract and ensure that any verbal promises are included in it.
- False Promises about the Property or Timeshare: Sellers often make false promises about the properties or the uses of timeshares to attract buyers. This is especially common regarding potential uses and the value of timeshare plans, constituting a scam, since those uses and values are limited.
- Monthly Fees: Sometimes, resorts promise fixed or even nonexistent maintenance fees to motivate you to buy the plan. This is a scam, since maintenance fees tend to increase every year.
Value of timeshares
As mentioned earlier, some resorts will try to make timeshares seem like a solid investment. This is a scam to motivate you to buy the plan. Timeshares lose about 70% of their value once you sign the purchase contract, and their value further decreases when you try to sell or rent them on your own. Additionally, the market is saturated with people trying to sell or rent their timeshares, further diminishing their value. A timeshare should never be considered an investment, and any seller trying to convince you otherwise is attempting to scam you.
Costs of timeshares
The price of a timeshare is influenced by factors such as the property's location, size, the resort's reputation, and the buyer's economic situation. This means that a seller can offer the same property at different prices to different customers, depending on what the buyer is willing to pay. However, this is not the total cost. Timeshares come with additional costs, primarily for maintenance but also for repairs in the event of natural disasters or accidents. If a seller assures you that there will be no additional payments after the initial payment, they are trying to pressure you into buying the timeshare.
Getting rid of a timeshare
All the advice we've provided so far is useful before buying a timeshare. Getting out of a timeshare contract, as with any type of contract, is not an easy task for those without experience in canceling contracts. That's why many opt for alternative solutions to avoid inconvenience, not knowing that none of these options, apart from cancellation, offers a guaranteed and convenient way to get rid of the timeshare plan.
- Selling or renting your timeshare: Often, buyers consider the possibility of selling or renting their timeshare when they lose interest in it. However, it's essential to consider that timeshares have a limited market and tend to lose value when put up for sale or rent. It's also crucial to highlight that when expressing interest in selling your timeshare plan, you may be targeted by fraudulent companies ready to take advantage of your situation. These companies may demand payments supposedly for covering taxes and other timeshare-related matters, but once they receive the payment, they cut all contact with you, taking your money.
- Giving away or donating your timeshare: You may have thought about getting rid of your timeshare by giving it to someone you know. However, it's essential to know that timeshares are often undesirable gifts, and the other person may not accept them. Alternatively, you might consider donating your timeshare to a charitable organization. Some organizations accept timeshares as donations because they can rent or sell the property on their own to raise funds for their cause. However, they are usually reluctant to do so since timeshares incur significant expenses, and it's unlikely that the profits from selling or renting the timeshare will be substantial.
- Alternatives proposed by the resort: If you try to contact the resort to discuss canceling your timeshare, it's highly likely that they will try to dissuade you from canceling the contract by offering alternatives such as downgrading your plan or suspending payments for a while. These alternatives may seem appealing initially since they are faster than the cancellation process. However, over time, the costs of the plan will outweigh the convenience of not canceling the contract, so it's important to carefully evaluate these options before making a decision.
Conclusion
Buying a timeshare is not an easy decision, and many sellers will try to take advantage of the public's lack of knowledge about scams. They make false and even impossible promises to pressure you into buying the plan. In case you've signed a contract and are dissatisfied with the property or the timeshare plan, the best option to disentangle yourself is to contact a timeshare cancellation company, as selling, renting, or giving away a timeshare is nearly impossible due to its low value.
To receive more information about why you should avoid timeshares and how to cancel them, send us a WhatsApp message at +52 1 333 239 6589, contact us or call us at +1 714 277 3662
