Timeshare is a concept that has been around for many decades. The principle is quite simple – instead of buying a whole property abroad you simply buy a share in that property and use it during your allotted time whilst other people use the property for the rest of the year. You share the time (ownership) at that property. However, Timeshare is a much misunderstood product and there is lots of misinformation out there in relation to it.
Advantages of Timeshare
Despite what the average man in the street may think, there are a number of advantages to Timeshare;
- You are only buying a share in the property and therefore don’t have to find the full purchase costs. The argument is that if you only have a number of weeks holiday why pay for a property for the whole year rather than buy just for the period that you use it for? If you are on a budget then Timeshare can be a good way of owning part of a property abroad without having to pay for the whole property
- The total costs of running the property (maintenance, taxes, insurance etc.) are shared between the owners so it costs you less to run the property.
- A property that is used all year round is less likely to have problems in terms of maintenance or burglaries than one that it not always used or is empty for part of the year.
- If you only need a holiday home for a certain time of the year you are not tying up your money in a property that you have exclusive use of but hardly ever utilise.
- If you own a whole property then you are “stuck” using that one property. With Timeshare you can swap (exchange) your time at that resort for a different resort each year and therefore don’t need to go back to the same resort if you don’t want to. Timeshare is therefore good for those people who don’t necessarily want to go back to the same place year after year but still like the idea of having a regular place away from home if they want to use it in that way.
Disadvantages of Timeshare
Although Timeshare can be a good product for some people and some owners have been happy with their Timeshare for decades - it is of course not right for everybody. Even though the quality of many resorts is actually quite high, some of the problems with Timeshare can be;
- The way it is sold. Often unscrupulous sales people will use heavy pressure techniques to persuade you to buy. You may be told certain things which turn out not to be true and which often don’t match up with the small print in the documentation. This is the main reason why in the past Timeshare has got itself a bad reputation.
- The price that you pay will be proportionately more than if you purchased a whole property. If you take, for an example, a €200,000 apartment and sell off 50 shares for an average of €8,000 each then you have managed to turn a property that is worth €200,000 into an income of €400,000. Obviously selling 50 shares in a property is always going to be more difficult than selling the whole property and there are extra costs associated with it but the buyer still ends up paying proportionately more for a share in a property compared to a whole property.
- Maintenance fees have increased dramatically over the last few years in some resorts. Most buyers who signed up for a Timeshare and were happy to pay £200 a week maintenance costs, however these owners are now faced with maintenance fees of between £500 and £1,000 per week. At those prices owners start to question the viability of their purchase because they can rent a property for cheaper and have more flexibility as a result. In fact sometimes it is possible to rent an apartment at the same resort for less than it costs for the maintenance fees for ownership of a Timeshare there.
- You have to pay for the maintenance fees whether you use the Timeshare or not. You may not wish to go on holiday every year but regardless of whether you use your Timeshare or not you are still committed to paying the maintenance fee. Some resorts have a rental pool that you can put your Timeshare into to help offset the cost of maintenance, but not all.
- Increasingly we are seeing owners complaining that although in theory they can swap their Timeshare for another one somewhere else, the ones that they want are never available.
Timeshare has changed
Timeshare, like many other products, has changed and evolved over time. It has had to in order to survive. Originally most people purchased a fixed week at a fixed apartment at a fixed resort. Then “flexibility” was introduced in that you could purchase a fixed week at a fixed resort but the apartment could be different. Eventually the product became very flexible with the introduction of Points Systems which meant you could technically use a variety of different resorts in different ways. This flexibility has benefited some purchasers but at the same time has diluted the very essence of Timeshare to the extent that what many people now buy is much less tangible than traditional timeshare.
Timeshare has spawned different products such as Fractional Ownership and Holiday Clubs.
Fractional Ownership is similar to Timeshare. You buy a property with other people. That could be friends or family or work colleagues or even complete strangers. You each own part of the property and share the running costs. It costs less for each of you to buy and run the property. The owners agree how they are going to use the property each year.
It could be argued that Timeshare is often a form of Fractional Ownership although not all Fractional Ownership is Timeshare as Timeshare has a set legal definition that doesn’t always encompass all Fractional Ownership schemes.
Holiday Clubs are essentially where you buy the right to cheap holidays. You are buying discounts in advance. You don’t own anything and the discounts are not guaranteed. Quite often we speak to people who find out that the discounts that they are offered are more expensive than they could have got the holidays for n the first place.
The main reason why Timeshare owners wish to get out of their Timeshare ownership is that circumstances have changed. Sometimes it is circumstances of the owner that have changed. It could be that they no longer use the Timeshare for some reason or they can no longer afford the maintenance fees. It could be that their family situation has changed and they no longer want to visit the Timeshare. Sometimes what has changed is at the resort. The maintenance fees could have increased. The quality of the resort may have reduced. The atmosphere of the resort may have changed.
Find out more
If you would like to find out more about timeshare in Spain or Portugal you can call us contact us.