A Piece Of The Dream

One interesting vacation option is the timeshare.retirement timeshare

About thirty years ago, one of my relatives bought one and immediately shared the good news with the rest of us. My dad, careful with his money, investigated and decided it was not a good idea. I haven't seriously thought about it for a long time.

Today a high-quality brochure lay in my mailbox, offering me the chance to buy into a vacation resort and demanding that I do some serious investigating on your behalf.

Here's what I've found so far. . .

What is a timeshare?

As its name implies, a timeshare is means by which a group of people hold a common interest in vacation property with the right to use that property for a brief period of time each year. There are other facets to timeshares, but this is it in a nutshell.

Although originally people bought shares in condominiums in desirable holiday locations, today people buy shares in resort villages, houseboats, and campgrounds.

The purchase is often made during a special holiday offer visit. The sale will be for either a shared property deed or a right to use agreement.

The shared property deed gives the owner a piece of real property. With the others who have signed the contract, (s)he owns the building or resort. Each owner has control over one apartment for a specified period of time, usually one week. The owner can use it, rent it, give it away, or bequeath it in a will.

Under right to use, the property is owned by someone else and each person who signs a contract purchases the right to use a piece of that property (usually an apartment) during a specified time. Sometimes the times are flexible. This particular system circumvents local laws against foreign ownership.

There are three types of time ownership. . .
  • Fixed
  • Floating
  • Rotating
Fixed ownership gives the buyer the same period of time each year. For example, you might have the right to your apartment in week number 17 every year. During that week, you get to live there yourself or arrange for someone else to use your time.

Floating time gives you a week (or however much time you have purchased) within a block of weeks. You have to choose among the weeks in your block.

Rotating time is an attempt to allow everyone equal time during prime seasons. For example, if you have week 17 this year, next year you will have week 16.

Pros And Cons Of The Timeshare Experience

The idea of a timeshare is sold as a means of having an inexpensive holiday in a popular destination. The cost of the share is less than the cost of local hotels. Because an apartment has a kitchen, you can do your own cooking and save money.

Some people find a timeshare a great investment in their leisure.

For those who can use them -- and retired folk will often fit this criterion -- bonus time can extend the value of the investment.

Certainly in the past, timeshares were on the hit list of people like my Dad who watched their pennies and who believed that if it looked too good to be true, it surely was. Certainly some of the criticism has been justified.

High pressure selling tactics mean that many who buy suffer from buyer's remorse and try sell out. In fact, so many want out that it is often a better idea to buy a resale than a new contract. Remember my relatives who bought in? Sold out within two years. If memory serves, they sold at a loss.

All property needs upkeep. Maintenance fees for timeshares can be up to US$1000 per year. (Of course they are often much less, but do ask about these fees.) Maintenance fees do not stay the same forever. They usually go up, sometimes astronomically.

Although many people with timeshares successfully exchange or rent out their time shares, not everyone finds a suitable alternative to using their week as and when reserved. This means that you could be locked into a holiday at the same place at the same time (if you have a fixed contract) for the rest of your holiday life. No matter how lovely any particular resort is, most people would like a little variety.

Those who buy a timeshare because they were sold on the idea that property will always increase in value, expecting a high return on their investment, are usually disappointed. Shared properties do not appreciate at the same rate as surrounding properties.

Like any concept, a timeshare is not for everyone. I don't plan to invest in the one that was offered to me today. You, on the other hand, may find the idea appealing. The strategy has been around long enough to have had some solid critique and there are enough happy clients to keep the builders busy. If you do want to participate, be rational in your approach and do your homework.

If you have timeshare experience, either good and otherwise, please share it with us.

M &E tell the story about their timeshare in Mexico.

Marlene speaks from 24 years of experience in timeshare ownership.

What you need to know about timeshare resale.

What you need to know about a timeshare exchange.