Does my timeshare gain equity

If you own a timeshare or are considering purchasing one, then you likely know something of the complicated nature of timeshare ownership.

 

Timeshare ownership is best considered joint-ownership, as you are sharing the vacation property with several other people. Depending on the type of contract, the timeshare property might be available to you for a specific period of time each year, and you won’t be allowed to rent it out when not in use. Timeshare ownership requires you to commit to set travel dates every year, and it can be a difficult process to try to change your vacation plans.

 

While you are not responsible for handling maintenance and upkeep issues for the timeshare property, you will be responsible for paying annual fees. The annual fees associated with a timeshare property cover any maintenance, upgrades, resort staffing, and general upkeep for the unit and building. Your annual fees might also cover the use certain amenities that your resort offers. Annual fees are required, even if you don’t use the property that year, and they have no cap, so you will end up paying more year after year.

 

With the large expenses associated with timeshare ownership, you might be wondering about the equity of your property. Does your timeshare gain equity? The short answer is no, but this is a difficult question to answer, and it depends on what your plans are for your property.  

 

Equity according to the developer

 

Many timeshare owners hear the word equity when their developer is trying to get them to upgrade to a nicer unit. These discussions usually involve upgrading your current timeshare property for a small fee or a change in your yearly schedule or time allotment.

 

It’s good for owners to remember that the developer is only going to offer a deal that works for them, and unfortunately that means it’s probably not a good one for you. Consider the value of your timeshare property and the contract requirements and be ready to compare that to the property that the developer is suggesting as an upgrade.

 

Equity in resale

 

Timeshare properties are notoriously difficult to resell. In fact, the timeshare market is so saturated that some owners have trouble even giving their timeshare properties away.

 

Remember that a timeshare property is not a real estate investment, and you will likely lose money on the property as soon as you purchase it. Don’t count on buying a timeshare with the plan to resell it later and make money off of it; it won’t happen. It’s not easy to get rid of a timeshare contract after you buy them

 

What might be called equity in the timeshare market isn’t actually of value to you. Typically, equity is the value of the property less the debt owed. This means that for most timeshare properties, the equity is in the negative, because the resale value is so much less than the amount still owed.

 

Lastly, be cautious of companies that offer to sell your timeshare for you. Be sure to do your research and choose a reputable company that isn’t asking you to pay large sums of money upfront. 

 

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