Are Timeshares Scams? What You Need To Know
Research conducted by ARDA revealed that 85% of timeshare buyers said they were happy with their investment. In contrast, the University of Central Florida conducted a similar study, and 85% said they regret investing in timeshares.
Now, depending on who you are and who you’re asking, a timeshare can either be a good investment or a scam. Today, we will help you check if you should spend your hard-earned cash on timeshares or, like most investment gurus online say, run away from it.
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We go back to the statement above.
The worthiness of timeshares depends entirely on your personality and your pocket. Probably the reason why ARDA and UCF’s research results vary by a full 360 degrees is that they asked an opposite group of people.
But since the statistics show unreliable metrics (at least, to make an educated personal decision), ask yourself this: “is having a timeshare beneficial to me?”
Some people say timeshares are worth every dime. These may be individuals who love to travel. On the other, another group of people might not agree. It all boils down to your preferences.
The following points will explain more on what timeshares are to help you make up your mind. By the end, you’d have an answer to the question, is timeshare right for me?
If you ask the travel and hospitality industry, they’d say timeshares are top sellers. After all, there are a million people that “own” them.
Timeshares are shared ownership of real estate vacation places. In exchange for their investments, the timeshare holders then get an annual allotment period to use the space.
It’s paying for a vacation condo unit beforehand so you can revisit the location freely, once a year, for a specified period.
That’s why some call it prepaid vacations.
In general, there are two steps to get into a timeshare agreement:
● The initial payment (one-time only)
○ Some report this to be around $15,000 to $20,000.
● The annual maintenance fee (indefinite cost)
○ The price of the maintenance fee varies, but there it’s usually hovering around $1,000 annually.
○ Whether or not you decide to visit the place for this year, you will still be paying for the maintenance fee of the site.
○ The maintenance fee can go up.
Although the terms for timeshare vary depending on the company, you got it from. For example:
Most timeshare allows you to stay in the resort for a week every year, while others may give that privilege biennially.
There are also deeded timeshares where you buy the privilege to own the property for a week. A corresponding deed accompanies it.
Lastly, some companies offer point-based timeshares which are more flexible on the shareholders. If you subscribe to this, you get to have the liberty to select which date you want to travel, the location’s property, and the length of stay.
If you want to learn more about the top companies that sell timeshare, we listed the four best to give you some perspective. Check them out below:
1. Wyndham Destinations
If an expansive portfolio is what you seek, nothing beats Wyndham from the top spot. There are a ton of clubs under their belt, including Worldmark, Margaritaville Vacation Club, and Club Wyndham.
They boast of more or less 600 thousand members that can visit locations spanning 113 countries. Wyndham Destinations use a point-based timeshare system that owners receive annually and are allowed to exchange for any week-long vacation from Wyndham’s network of resorts.
2. Disney Vacation Club
Disney Vacation Club, like Wyndham, operates using points for their timeshares, but they target a completely different niche. DVC’s market is more on families because, well, they’re Disney.
Under their arsenal are 15 different resorts from California, Hawaii, Hilton Head Island, Florida, and Orlando. The points needed for resorts vary depending on the location, the time of the year, and the unit size.
3. Hilton Grand Vacations
Another great timeshare company is Hilton Grand Vacations that has more than 300 thousand members worldwide. They rank well in terms of hospitality and real estate diversity as they have more than 5700+ properties that timeshare holders can choose from.
Like the previous companies, they operate using a point exchange system. Every member gets a fixed annual point allotment for their investment which they may use to travel to Hilton destinations worldwide.
4. Hyatt Residence Club
Hyatt boasts of their intimacy-focused locations in high-interest locations. They currently have 16 stunning resorts in places like Florida, Texas, Colorado, Puerto Rico, and Hawaii, to mention a few.
The family-friendly setting of their resorts can help clients get the most quality time with their loved ones.
Of course, nobody wakes up one day and says, “I want a timeshare.” Unless, of course, you’ve been dreaming about booking in resorts and feeling like a king for a week. If you’re not this person, then you might expect a sales pitch from timeshare companies first before you think of investing.
Here are their most common sales pitch techniques:
● Companies often use a lead magnet in attracting people to attend the timeshare sales pitch. It may be a gourmet dinner in a fine hotel, some tickets to Disneyland, or a relaxing massage in exchange for a 90-minute presentation.
● They often do this when people are on “vacation mode.” It is the moment when individuals are most vulnerable because they are not laser-focused and logically thinking on regular workdays.
● Pitchers usually tap into the emotions of potential buyers and then make a hard sell on the most vulnerable group of people.
It’s standard selling SOP, but it still gets people to sign up, especially with the guilt that comes from the lead magnet.
The decision of whether a timeshare is right for you or not depends entirely on who you are.
If you love to travel and explore the world regularly, but you hate the hassle of planning out the booking and other logistics, then a timeshare might be worth your time, especially since you’ll use that investment after all.
But if you’re a person who rarely travels, then a timeshare might be a dead investment. You don’t have equity on the property, plus you won’t get to use it consistently. In this case, refrain from timeshares. You can have better chances of getting on a hotel at $200 a night, and it wouldn’t hurt your pocket as much.
Then again, it still depends on you.
