Are timeshares worth your time?
Have you been dreaming of owning a vacation getaway? If so, there are five important considerations before you invest in a timeshare or other property.
1. What are your actual costs?
The purchase price is only part of the equation. You’re also likely to incur a variety of fees—for example, the costs of property maintenance, property taxes, repairs, and travel expenses getting to and from that destination.
2. Does the location offer the amenities you seek?
It’s easy to get caught up in the beauty of a place you’re visiting. Before investing in a timeshare or vacation home, make sure it’s a place you want to return to again and again.
3. Will you rent it out?
Is a property more affordable if you rent it out during during the times you don’t use it? If so, take time to investigate the rental market to find out whether it’s likely you’ll have success renting out your place — and the best ways to approach doing so.
4. Will you retire there?
If you plan to eventually live in the property, it may give you more flexibility in choosing your location because the expenses you incur traveling there now are only temporary. Just make sure it’s a place where you’re comfortable spending most or all of your time when you’re no longer working.
5. How strong is the resale market?
If you purchase a property, determine the likelihood of obtaining a fair market value when you sell it. This is a far more complicated issue with a timeshare, where the resale market is more challenging. Find out what the secondary market is like for timeshare units before making an investment.
To avoid making any snap decisions, carefully weigh your options and read all documents before signing any purchasing related papers. For help creating a savings and cost strategy, consult your financial advisor.
James C. Hanna, CFP®, MBA, Financial Advisor, Certified Financial Planner ™ practitioner. Advisor is licensed/registered to do business with U.S. residents only in the states of Kansas, Missouri, Colorado, Nebraska, Oklahoma, Texas and Indiana.
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