Why timeshares are a bad investment

Please take this advice and your money, and go invest in something that offers the opportunity to profit. Facebook Twitter RSS. Why Timeshares are a Bad Investment. Timeshares are like new cars: the second you drive them off the lot, they lose value.

Timeshares lose 40 to 75 percent of their value once you purchase them. If cars depreciated that quickly, I doubt anyone would buy a new one without being subjected to timeshare-like sales tactics. Unfortunately, most people put so much money into timeshares and are so unrealistic about their actual value that they have a hard time pricing them at a market rate the rate at which the unit would actually sell.

Have you ever visited Redweek, eBay or other sites that offer timeshare rentals? Be sure to check these sites before buying a timeshare. There are many timeshare owners out there who are unable to use their weeks for the present or coming year and will rent them out to other people. In fact, there are so many that they generally end up going for much less than the original asking prices. This is not something you will find out from the salespeople at the resorts. In fact, timeshares reliably decrease in value, even when they're in a highly desirable location.

Just like vehicles, timeshares start losing value right away, and their value usually continues to dwindle as time passes.

Plus, timeshares are nearly impossible to resell. Both the new and used timeshare markets are glutted with supply outweighing demand. So, even if you do manage to sell off a timeshare eventually, expect a price considerably lower than you first paid.

And try not to think about the thousands you shelled out for maintenance fees over the years. Not only are they pretty much guaranteed to lose value and be difficult to sell, there are other important differences between timeshares and other types of real estate investments.

A big one, of course, is that you don't actually own the property outright. You co-own it with numerous other people, usually dozens. However, they never manage to find the right buyer and end up scamming you. Please know that some states have enacted strict laws to regulate timeshare reselling. So, not all brokers are scammers.

Timeshares are hardly sold benefiting their owners. Getting it done is rather complicated. However, there are a few exceptions.

Make sure you do some research online to find out more about how to deduct the loss from your returns. Going for timeshare purchasing through mortgages is not advisable at all. As mentioned above, there are various expenditures you are liable to pay for in addition to the mortgage price.

However, in case of non-payment or default, you may experience foreclosure and the lender may enforce the sale of your collateral to recover the borrowed amount.

Foreclosures will certainly hit hard on your credit score. The sales amount retrieved is often not enough to cover for the mortgage. As a result, the lender can gain the benefit of deficiency too. The deficiency is the amount of difference between the sales amount of the collateral and the loan. Fortunately, certain states have robust policies to protect your right to a deficiency amount. Hence, the lender can manipulate the judgment in their favor and gain the benefit of deficiency as well.