The Best Way To Buy, Sell or Rent a Timeshare
If you think cars depreciate quickly, you may be shocked by the resale prices on timeshares. The first mistake people make is thinking their timeshare is an investment. It’s not. They almost never appreciate or generate income. A timeshare is more like a pre-paid vacation. The salesperson may tell you differently, but the long list of timeshares you can buy for zero dollars is a more reliable indicator.
The reality is a lot of markup exists in the purchase price of a new timeshare property. Typically, the marketing costs account for 40-50% of the purchase price. This makes it difficult to recoup your initial investment when you try to resell your timeshare.
Some people read my article last week, which covered the basics of timeshares, and decided they were not interested in owning one. However, what if you could buy one simply by taking over the annual maintenance cost? Alternatively, you may be interested in finding a good last-minute deal from an owner who is trying to rent his unit?
Why Are Timeshare Re-Sales So Cheap?
There is a growing supply of timeshares because new resorts are being built every year. This adds to the inventory of over 205,000 units in North America. The growth of websites like Airbnb and VRBO has also significantly increased the supply of cost-effective vacation rentals.
The demand for timeshare units may not be keeping up. Some folks no longer use their units due to health limitations (See: What Happens to a Timeshare When the Owner Dies). Others get frustrated trying to exchange their week for a different week or different resort. The most desirable locations need to be booked far in advance. The bottom line here is there may be bargains to be found in the timeshare resale market.
How Do I Buy or Sell a Timeshare in the Re-Sale Market?
The internet has made it relatively easy to buy, sell, and rent timeshares. Buying a used unit gives you all the benefits of ownership at a fraction of the cost. Try searching “Timeshare for sale” on eBay or Craigslist or check out one of these sites:
www.tug2.net (Timeshare Users Group)
Beware of Scams
You can sell your unit for a small listing fee on an established website such as the ones listed above. However, you should immediately hang up if you are cold-called and offered a “buyer” for your timeshare. The company on the other end of the phone will likely try to collect hundreds or even thousands of dollars in so-called “deed transfer” or “marketing” fees but then never complete the sale. The Federal Trade Commission has cracked down on timeshare resale scams, and the FTC offers guidelines on how not to be taken in when you want to unload yours.
What If You Are Unable to Sell Your Timeshare?
There are also companies that help you “get out” of your timeshare agreement if you are unable or unwilling to go through the hassle of trying to find a buyer. One such company is (ACC) A Consumer Credit. ACC looks for laws that the timeshare company broke in the sales process. Dana Micaleff, the founder of ACC, says most companies prefer to release individual owners from their contracts rather than go to court and risk losing. His services typically cost between $1,800 and $3,400, depending on the number of timeshares the client owns.
The population of timeshare buyers is getting younger and more ethnically diverse. I am convinced there are some great deals available if you are willing to do the research, both when you buy and every year when you want to use your timeshare. Please send me your stories if you buy, sell, or rent a timeshare. I am interested in how this plays out for my clients and the readers of my blog.
Have a great week.