This is the fine print they don't want you to see
To understand the truth about timeshare, we must examine the pros and cons of timeshare and the timeshare developer business model. Sometimes owning can have benefits, but for most people owning a timeshare isn't what it's cracked up to be.
Here are the facts they won't tell you when you're on a presentation:
1. It has almost no resale value - This isn't conjecture or my opinion. This is a cold, hard fact. Unlike a brand new car being driven off the lot, timeshare just doesn't depreciate in value after the purchase. It has almost zero value, and if you calculate the likelihood of being able to resell the timeshare - it most often has negative value meaning you would likely have to pay someone to take it if you wanted it off your hands quickly. Every year thousands of timeshare owners pay to get out of their contracts. Is it an ethical business practice to charge tens of thousands of dollars for a product that has no real value? I will leave that for you to decide. The reason it has no real value is because the system is designed that way. The benefits of the timeshare come from the developer, which brings me to my next point.
2. Most of the benefits convey from a developer - If you were to examine the fine print of most major timeshare developers' bylaws, you would find that regardless of how much inventory you owned that the board of directors is almost exclusively decided from the developer. This means that for folks who want to resell their deed or points ownership most benefits do not convey. Why? Because the timeshare company wants a monopoly on the sales side. Additionally it gives the developer almost complete control of the reservation system. One of the largest developers states in their program summary that they reserve the right to rent "unbooked" inventory at the 60 day mark. How is that an ethical practice when so many families have invested their hard earned money into their timeshare?
3. Most of the time the developer earns a profit from managing the HOA - Most major timeshare developers earn a hefty management fee for managing resort Homeowners Associations (HOAs). Don't believe me? For the publicly traded companies just check their SEC filings. Whenever you get 'the pitch' you're told that they don't make a dime from maintenance fees which contrary to the honest and ethical timeshare salesman is completely untrue. Not only did the timeshare paradigm change with the points model. Now the developer can sell as many points as possible with the same peak seasons in effect.
4. The reservation system is built for failure - With the creation of points systems the timeshare developer engineered a method to sell previously unsellable inventory. Prior to the invention of points, developers would sell fixed and float weeks which allowed the buyer to guarantee either a certain week or season at their home resort. The availability wasn't an issue because the buyer would be able to get that same week year over year. However, the issue was the ability to travel elsewhere or flexibility. On the flipside - an issue for the developer was that most people wanted to travel during several peak times of year - holidays, summer, spring break etc.. Not so great when you're trying to offload fixed weeks and you have to pay the maintenance fees on them until they're sold. The easy solution was to create a points system. This allowed the majority of inventory to be sold off and allowed the developer to pitch buyers flexibility - "you can go when you want, where you want, and book what unit you want." The challenge is that if everyone can go and there are only so many rooms available, then someone will inevitably get their second, third or fourth choice vacation.
5. The math doesn't add up - When you calculate the cost of vacations the most important aspect for accomodations is the Cost per Night. The reality is when you add the retail purchase cost, the maintenance fees, any interest or financing that most people set up, and then the actual reservation power - your cost per night could be 3 or 4 times the market rate. Then on top of that they hit you with booking fees, guest certificates, and housekeeping fees.
More tips for timeshare owners here
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