For many of us, owning our own holiday home is little more than a pipedream and, instead, we’re resigned to booking hotels or resorts when it comes to holidaying abroad.
However, timeshares were introduced in Europe in the 1960s as a way of making holiday homes much more affordable for people without millions in the bank and have become increasingly popular across the globe since the early 2000s.
In fact, it’s estimated that around 22 million households own a timeshare worldwide, with resorts expanding into over 180 countries.
Whilst these timeshares can offer some benefits, though, it’s important to look at the cons before jumping head first into any contracts.
Here, we’ve taken a look at some of the biggest risks involved in buying a timeshare so you can make an informed decision.
They’re difficult to sell on
With Brits selling on timeshares at an estimated six per day, the timeshare market is extremely saturated, meaning a timeshare is much more difficult to sell on once you’ve purchased it. The ratio of buyers to sellers is extremely low, so you’ll have a lot of competition when it comes to selling it.
Plus, with the reputation of timeshares turning sour, people are less willing to purchase one, even on a cheaper resale market. This has led some people to sell timeshares for $1 or giving them away for free.
In addition, timeshare contracts can be extremely difficult to exit legally and many contracts are binding for up to 25 years, so it’s a very confining long-term commitment.
They’re an ongoing expense
Many people think that once you’ve purchased your timeshare, the bulk of your expenditure is over and you can start reaping the rewards of your holiday home.
However, this is not the case and you will be required to pay maintenance fees year-round, despite only using the timeshare for your allotted time.
This can rack up extremely quickly, especially if your fees aren’t capped, and you can be at the whim of the developer when fixing fees.
You’ll even be required to pay expenses if you’re in the process of trying to sell your share, meaning you’ll be paying into an empty scheme.
They limit your holiday choices
Timeshares can also be risky due to limiting your choice of holiday destination.
Whilst it may seem ideal at first glance to have a fixed holiday home in your own slice of paradise, many people don’t realise how quickly it can become boring to keep returning to the same place each year.
And, due to the expenditure you’ve already paid, you’re unlikely to want to holiday anywhere else for fear of wasting your money.
Although this has been combated to some extent by the introduction of transferable points timeshares, it can also be difficult to transfer your timeshare to another location and you may not get your first choice.
Timeshare resale scams are a big problem
One of the biggest risks of buying a timeshare is the possibility for resale scams should you decide to sell it on.
We spoke to the Timeshare Consumer Association, who said: “According to research, an estimated 95% of the timeshare resale companies who claim to be legitimate resellers have actively defrauded consumers.
Because resellers know that you’re desperate to sell on your share and are willing to pay expensive fees to do so, it’s easy to manipulate consumers into paying a lot for no service.
We advise you not to make any up-front payments and have compiled a list of known companies for reselling.”
So, if you’re looking to buy a timeshare, we hope this has given you some food for thought before signing on the dotted line.