You might have received an offer for a free dinner or weekend trip that seems too good until you discover there are some strings attached. Most of these tempting offers might seem like a fun free time, but they come at a price, typically with timeshare companies.
A timeshare is a real estate ownership model for properties with multiple purchasers that own allotments of usages (typically in one-week increments) for those not in the know. Timeshares started as an option for people wanting to own a vacation home but don’t have the financial security to own themselves fully.
Though this might seem like a feasible way to access a vacation home, timeshare salesman neglect to tell customers the hard facts of entering a timeshare agreement. Timeshare salespeople start by giving incentives such as a weekend trip, free dinner, or Visa gift card in exchange for a 90-minute presentation.
Most attend the presentation for the incentive with no intention of investing, but some are misled to see the value of the timeshare venture. The salesperson will reassure customers committing to a timeshare in a financial investment that doesn’t even fall under the definition of ‘investment.’
The definition of investment is something designed to appreciate in value, generate income, or both. Timeshares neither appreciate in value nor generate income despite what the salesperson says. The value of the timeshare is based on supply and demand, with low demand for timeshares leading to salespeople having to bribe customers with free weekend trips, Visa gift cards, or a dinner to deliver a sales pitch.
The low demand is also met with a high supply with a massive marketing and sales machine consisting of the timeshare industry. Unfortunately, due to the saturated market, the timeshare resale market is virtually nonexistent, with nearly all companies claiming to “sell” your timeshare exist with the sole purpose of taking your money.
Timeshare salespeople will try to entice customers, reassuring them that the fees will never go up, which they cannot guarantee. However, studies indicate fees increase a minimum of 4% per year, and most timeshares charge additional fees for maintenance, assessment, or other additional charges.
One of the biggest lies told by the timeshare industry is that a customer’s timeshare obligation will end after passing away. Most timeshare agreements are in “perpetuity,” meaning the purchase is permanent and does not have a set end or expiration date. A majority of timeshare owners actually pass on their timeshare obligation to their family, like acquiring the deceased’s debt.
Remember, if it seems too good to be true, you’re probably right. If you consider a timeshare in the future, consider these things that a salesperson will probably not tell you forthright.