Buying timeshares is a system where you temporarily own and use a vacation property, generally a few times throughout the year. Purchasing one can be a passionate and spontaneous decision. Understanding the advantages and disadvantages of buying a timeshare are important to your planning and financial dealings. There are 4 different kinds of timeshares: fixed week, floating, right-to-use, and points club. Whether you are buying a specific type of timeshare, understanding its pros and cons will always be beneficial.
1. You are only paying for what you actually use, unlike a vacation home, which is usually unoccupied throughout the year. In addition, maintaining and updating the property is not an issue.
2. You will be now have a certain and definite vacation destination.
3. You can trade timeshares with other people, based on location and time of occupancy, and will be able to see different places.
4. If you can’t use your timeshare then you can usually rent it out for your allotted time period.
5. You can let family or friends use it or auction it for charity.
1. Although maintaining the timeshare isn’t a concern,you must still pay annual fees and worry about fee increases. These fees must be paid whether you occupy the timeshare or not. Foreclosure of your timeshare by the develop is permitted if these fees are not paid on time.
2. You might have a hard time selling your timeshare, especially if it has already been used, since the secondary market is full of them.
3. The IRS does not permit you to assert a capital loss if your timeshare is sold for a loss.
4. If your timeshare is located in a foreign country, you will probably be faced with more challenges like inferior protection laws and location regulations.