How to Buy and Sell Timeshares
Want to know how to buy and sell timeshares? Take your time, then. As you’re about to find out, the world of timeshare ownership is fraught with peril – including negative equity, high interest rates, scams galore, and never-ending maintenance fees.
But, a timeshare can be a really attractive option for anyone looking to have a home away from home. With the right homework and diligence, you can get involved in buying and selling timeshares without all of the headaches.
Buying a timeshare isn’t like buying a traditional piece of real estate. There are two different types of ownership:
- Deeded ownership – you actually receive a deed that dictates your ownership in the timeshare property. Along with this deed comes a monthly mortgage, property taxes, and maintenance responsibilities. It’s like owning a condo, except you only use it occasionally.
- Rights to Use – with this type of ownership, you’re given the right to use the property for a set amount of time for each year of your agreement. You don’t own a specific unit – the developer does. You may or may not find yourself in the same property during each vacation.
There are plenty of different options when it comes to both deeded ownership and rights to use, but you’ll be better off digging into the Federal Trade Commission’s information on time shares if you decide to proceed with ownership.
A timeshare is an investment – but not one that provides any sort of respectable return. A timeshare is a lot more like owning a car or boat. It has never-ending maintenance requirements, and you’ll have to keep throwing money into it month after month. When it’s time to sell, you’ll rarely get your initial investment back. If you’re not ready to take a hit like that, then you should avoid timeshares all together.
Buying a timeshare the right way can help you minimize this loss, drastically. Instead of working directly with a developer, find an existing owner of a timeshare that’s ready to sell. You’ll be able to pick the property up for a fraction of its original cost. One man’s loss is another man’s gain – just make sure you’re not the one losing.
Just like buying a car, it’s also wise to pay in cash. This will help you avoid the absolutely insane interest rates that typically come with timeshare investments – they can range as high as eighteen percent!
How to Sell a Timeshare
If you’ve bought a timeshare and are ready to get out, you might have trouble selling it – the economy isn’t exactly in the best shape, after all. Follow these tips to smooth the process and leave that money pit behind:
- Sell it back to the developer – again, you’ll take a huge hit, here, but the timeshare company is probably interested in scooping up your timeshare at a low cost and flipping it for a nice profit. It provides a quick way out, but you’ll lose the most money.
- Sell your timeshare to other owners – if you can find out who owns the right to use the timeshare immediately before or after you, they may be interested in buying it. This will allow them to extend the duration of their visits. You’ll still take a huge hit, but it won’t be quite as bad as selling it directly to the developer.
- Sell it through a local broker – there are plenty of brokers that are experienced with selling timeshares, and plenty who aren’t. If you’re going to work with a broker, take the time to learn about their experience, fees, and marketing plan before you dive in. Whatever you do, don’t pay a broker a commission for doing something you could do on your own – like posting an ad online.
- Check out sites like RedWeek or TransAction Realty – these sites exist primarily to help owners of timeshares sell to interested parties. There are some fees involved, but it’s a cheaper approach for anyone with real estate savvy and a DIY mentality.
If you own a timeshare, you’ve probably been contacted by third parties that promise to have a “ready and capable buyer” on stand-by. If you weren’t in the market to sell when that call came, you might have just ignored it. But since you’re here, reading this article right now – you probably are interested in selling.
There are numerous scams, and some are respectably ingenious. The most common, though, is for the scammer to contact you and promise that they have a buyer ready. They’ll even mail you a letter of intent. All you need to do is send a small fee (a few hundred dollars) and they’ll take care of the rest…
…except you’ll never hear from them again. Your money is gone, and you’ve been scammed. If you’re learning how to sell your time share, avoid companies that contact you, first. If someone does contact you, though, and you’re interested in doing business with them, be sure to check into their ratings with the better business bureau, and do some research online to make sure that scams aren’t being reported.
Ultimately, a timeshare is not an investment – it’s an expense. Avoiding them entirely is one of the smartest investment decisions you could ever make.