Timeshare Properties Continue to Loose Value

Obviously, as you can see, I have not posted in quite a while as I have been busy with other projects.  Additionally, I am also a recruiter for a multi-billion dollar company.  What is interesting is that I have come across a number of resumes over the past several months in the Orlando area (where I live), resulting in many of those resumes belonging to individuals that were employees of  timeshare property developers.  In speaking to many of them, I have found that the timeshare industry over the past 2 years has definitely had its share of financial problems. 

What I have been told by many is that it is becoming more difficult to sell timeshare property directly from the property developers, and that many of the families looking into purchasing timeshare property have now looked to the web for “better deals”!  I recall speaking to one potential recruit that worked for one of the larger timeshare property developers here in Orlando, in the in-house sales department, that many of the families are  making the rounds on several timeshare properties during their vacation just to obtain the free cash and tickets to various attractions and restaurants in the central Florida area.  This individual told me that she has been told by more than one family that they had no intention of purchasing direct from her company as the timeshare properties available on the web were indeed, much cheaper.

I have been searching the web lately and found that many of these timeshare properties are actually being giving away for a “song”, provided that the new owner takes over the annual maintenance fees and any other incidental fees that may have been incurred during the previous owners membership.  Lets face it.  The economy is showing little or no improvement during the past year, and frankly, I am not convinced that we will see improvement anytime soon.   I fear one of the biggest problems that current timeshare owners are experiencing lately, is the annual maintenance fees.  With our current economy on a continual downturn, families cannot afford those fees; so as a result, they must either sell the property or loose it anyway to the property owners.

Over the next few months, I plan to visit many of these timeshare properties in the central Florida area to obtain information that I trust, will help those reading my blog, with valuable information, whether you are thinking of buying, selling, or just holding on to the property you currently own.

I will be posting a little more often now that I have more time on my hands to address the concerns of this industry.

Big Brand Timeshare Resorts versus No-Brand Properties

Big brand timeshare resorts such as Westgate, Marriott and Hilton offer many amenities and are usually conveniently located in the most popular vacation spots in the world.  You will find the big brand resorts are usually large, providing more than adequate property for swimming, tennis, golf, bicycling, health clinics and even on-property restaurants providing popular cuisine for the most discriminating people.  Related costs for these timeshare properties are usually at a premium and annual maintenance costs can run as high as $1000-$2000 annually.  Generally, the condition of the properties are good to excellent with maintenance crews on staff providing quick responses to daily problems that occur either with a specific timeshare unit or the property in general. 

Additionally, these big brand resorts offer several different unit sizes to include one, two, three, four and five bedroom units as well as lock-off units that provide the flexibility of opening 2 separate units side-by-side giving the flexibility of a much larger unit than a single unit.

Some of the big brand resorts require an extra charge for items such as paddle boats, bicycling and the use of the health clinics (weight rooms) to name a few.  If you decide on making a purchase at one of these big brand resorts, make sure you find out if and what additional charges you may incur for using some of their property amenities.

Lets take a minute to talk about no-brand timeshare resorts.  I won’t name them, but you will find them in almost all of the popular vacation spots.  Many of these smaller resorts are located conveniently near local attractions.  Many of them offer amenities similar to the larger resorts.  The related cost for these timeshare units are usually less expensive than the larger resorts, but keep in mind, that if the vacation spot is very popular, such as Orlando, Florida, you will find that even the smaller timeshare resorts price structure for purchasing a unit will not be much less than the larger resorts, and in many cases, the prices will be the same or possibly even more.

Many of the smaller resorts have several amenities; however, the size of their properties in many cases, will be smaller, so there may be limits to the amenities that they can offer.  The units in the smaller resorts may have limitations relating to the number of bedrooms, porches, kitchen amenities, and flat screen TV’s, etc.  Most smaller resorts do not have restaurants on properties; however, many have arrangements with outside restaurants to provide its guests with substantial discounts for dining.  Also, many of the smaller resorts offer discount tickets for various attractions in the area.  Due to the fact that these smaller resorts may not provide as many amenities as the larger resorts, you will find that many of these amenities are provided at no charge to the timeshare owner.

Some of the smaller timeshare resorts are off the beaten path and may require the owner to drive anywhere from 15 minutes to an hour between the timeshare property and the actual vacation spot.  For individuals who are not concerned about the drive time, there are advantages to owning in a smaller timeshare property.  Usually, the cost for maintenance is less, and some of these properties are located in quiet secluded areas that are more desirable and provide the guest the advantage to get away from it all!

If you like the hustle bustle of a larger resort, need all the amenities that it has to offer, and are willing to pay the price, then the larger name brand resorts is most likely the way to go; however, if you like seclusion, and don’t mind a little bit of driving, then the smaller resorts may work out ok.  Keep in mind that there are many smaller resorts that offer many amenities at no charge or at a very nominal fee for their usage.  If you are not sure which way to go, all of the timeshare resorts, whether big or small, offer tours that usually take anywhere from 2-4 hours, and in return, provide the individuals with some form of compensation such as cash, or discount tickets for attractions etc.  Keep in mind, that some of these resorts have high-pressure sales tactics, but you are never obligated to buy!  Now I am not saying to take 10 tours of resorts while vacationing, but if you have the time and are possibly interested in purchasing a timeshare resorts, you may want to take one or two tours of those that interest you the most.  Before vacationing, surf the web to see what vacation ownership properties are available.  This will help you to plan ahead before you head on out the door!

How To Sell a Timeshare in the New Economy

There is no secret that the economy has not been doing well for over 2 ½ years.  Is there light at the end of the tunnel?  Of course, but as you are most likely aware, it will take time to turn this economy around.  Lets face it; ever since the real estate market experienced a major decline in 2006-07, it has been a long road to recovery that won’t happen overnight.  So now what?  How do I sell my timeshare in this economy? 

There are many things to consider.  First and foremost, where is your timeshare located?  Is it in a desirable vacation spot?  Do you own a Red Week or a Blue Week?  Are there many amenities on the timeshare property?  What is the weather like if you own a fixed week?  How difficult is it to swap your week or to exchange your week thru an exchange company?  These are just some of the issues that help to determine the value of your timeshare property.

Sure, the economy has been at its lowest for the past several years; however, families still vacation!  The question is, how desirable is your timeshare property?  How much should I sell it for on a quick sale, or at a premium?  These are excellent questions, and most likely, your best bet is first, to contact a timeshare professional in the city or area where your timeshare property is located.  A professional can bring you up to date regarding current market conditions in that area, what timeshare properties are going for based on a comparable unit similar to what you currently own, and on a final note, provide you with a reasonable current market value of your timeshare property.

Now, that’s not to say, that you may be able to get more for your timeshare property than what you are being told by a professional, but for what its worth, it gets you in the ballpark of a fair current market value.

One of the big questions, is do you sell now or when the economy improves?  There are various trains of thought that go into this process.  Do you sell now for less, but eliminate your maintenance fees and possible monthly payments (if you financed your timeshare)?  On the other hand, do you hold on to your property, continue to make annual maintenance and other associated fees, until such time that the market improves?  If you decide to hold on to the property for the time being, then unless you intend to use it annually, or exchange it annually for another timeshare property, then you may want to rent it out during the years that you and your family are not planning on using it.  The rent you get for the week may cover your annual maintenance fees and other associated fees eliminated that annual debt.  Keep in mind, that if you financed the timeshare property, you will continue to incur the monthly payments.  If you can afford to hold on to the property for now, most likely the market value of the property will appreciate once again, when the economy improves, and vacation ownership once again, is back on track.

You know as well as I, that times are tight and many people are purchasing timeshare property from other individuals rather than the property developer.  There is no secret that purchasing a timeshare property in this manner is considerably cheaper, at least for now.  In many cases, the buyer can save as much as 50-70% by purchasing from another individual rather than the property developer.  Keep in mind, that you need to make sure that the property developer does not have the first right of refusal, or if they do, what are the conditions of a potential sale.

Obviously, there are many issues to consider.  One of the biggest issues is your current financial condition.  Can you continue to afford your timeshare property?  Is your property approaching foreclosure?  If it is, then selling it quickly or renting it out to help cover related expenses might be the answer.  If you can afford to continue to hold on to the property at least until the economy turns around, then you most likely will get much more for it later as the market values continue to appreciate.

As I always say, do your homework!  Write down the pros and cons of continued timeshare ownership.  Does it make sense to continue to own, or is there debt relief in selling your timeshare property now?  There are many questions, but only YOU can answer them!

To Buy or Not To Buy?

Before you decide whether to buy timeshare property or not, make sure that the concept makes good economic sense.  What you don’t want to do is fork over money for a timeshare property that you will never use or not use enough to justify the cost.  If your situation does not allow you to plan vacations in advance, then timeshare ownership may not be right for you. 

Keep in mind, that in addition to your monthly cost for ownership (unless you are paying cash up front for the full value of the purchase), you also have annual maintenance fees, which in many cases range from $700 to well over $1000 annually.  There may be other additional fees as well.  If you are considering the purchase of timeshare property, make sure you clearly understand what those additional fees are.

Timeshare property ownership is not an investment in real estate.  It’s an investment in your future vacations. You should buy one for the use you can get out of it, not for market appreciation.  Timeshare property looses its value as soon as you close the deal.  The real value of timeshare ownership lies in what you are getting for your money.  As long as you clearly understand that concept, then timeshare ownership may be a wise investment.

Timeshare ownership also provides you with various exchange company memberships giving you the flexibility of vacationing at other timeshare resorts all over the world.  If your desire is to purchase, make sure you understand the exchange company’s programs and any associated fees that may be involved for taking advance of vacationing at other timeshare resort properties.

So, in closing, before you take that 90 minute tour at a timeshare property, make sure you justify in your mind, what timeshare ownership will do for you and your family.  Some of the questions you should ask yourself are:  Do you plan to vacation at the same resort each year, or would you rather choose various destinations annually?  Does the exchange program give you the additional flexibility that you want for your vacation destinations?  Does timeshare ownership provide you with the flexibility when planning your vacations?  Is it right for you?  Take your time, do the research, and you will make the right decision!

To learn more about Timeshareflex, please visit our website.