Buying a beach front property or a vacation villa may be easy for rich and wealthy but not for common middle class people. The introduction of timeshare concept gave hope to those people who could not afford to buy a brand new vacation home. That is one of the reasons why the timeshare industry has grown by leaps and bounds ever since its inception in the United States. One of the aspects of a timeshare property that attracts most people is that they can have a wonderful vacation home without having to worry about its upkeep and maintenance. But at the same time people have many misconceptions about timeshares.
The problem that most people come across is that they believe timeshares are the same as your normal, everyday real estate property. You will find that this isn’t the case, even though it is like an investment. Instead you are able to vacation every single year without the hassles. The only problem is when you own timeshares; you don’t normally reap profitable returns. It’s even possible to lose money.
So the question that always comes to pass is whether or not it’s worth buying a timeshare. It’s not an easy thing to answer because there are several factors that come into play. Whether it’s comparable rent for alternative accommodation, appreciation of timeshare properties or the finance rate, they are all things to consider. So we want to show you a simple calculation.
The first thing to do is think about the profitability investment. This should be measured by the comparable rental rate, the rate of appreciation, and the finance rate. When you add them all up and they provide a negative number, you might as well consider that you are losing money in your timeshares.
Suppose if corresponding rent of that vacation timeshare is $1,000 and the buying price is $10,000 then the rental rate is 10%. Now if we include the annual maintenance cost, membership and all other miscellaneous expenses, if it comes around $500. So the actual saving in rent will be $500 now and the rental rate will be the ratio of $500 to $10,000 which gives us 5%.
These can also turn into negative percentages as well. If the appreciation rate is 10% and the finance rate is 16%, once you add in the rental rate and appreciation and then subtract the finance rate you end up with a negative percent. So, you’re losing 1% every year you compare it to your rent. Keep in mind this is only a rough calculation, because the depreciation rate and finance rates are going to vary.
You will also see a variation in the maintenance fees due to the different locations of the timeshares. Most of them charge reasonable rates, but there were others that have extremely high fees. It’s another important area that you should factor in when considering which resort to choose. Remember, the whole idea is for you to have a profitable setup, and if you’re dealing with high upkeep and maintenance costs you may want to rent it out occasionally.
Another good idea is to add up the cost of your timeshare for the entire year i.e. all fifty two weeks and see. For the above investment it may be around 520,000. But, does the timeshare property cost that much if somebody wants to buy it as a real estate property. The extra money goes into the pockets of real estate developers who are selling the timeshare. So carefully weigh in all the factors discussed above before buying a timeshare property.
If you are thinking about timeshare ownership and want to discover more Timeshare Information, you should check out We Own Timeshares. Meet and connect with timeshare owners on this Timeshare Ownership social network. It is free to sign-up and you can create your own profile in minutes. Share experiences and reviews of different timeshare locations and start asking questions in the forum. Visit today.
categories: timeshare information,timeshare ownership,timeshare properties,timeshare forum,timeshares,timeshares,timeshare,vacation,vacationing,travel,leisure,family
