A Timeshare Buyer's Guide

In a timeshare arrangement, you purchase the right to stay in a condominium, villa or apartment unit for a specific length of time every year. Timeshares are smart for vacationers that have a favorite getaway place and want to avoid the frustration of earning new resort or hotel arrangements whenever they return. But the principle of”buyer beware” applies in timeshare deals, which can lock you into an expensive and complex arrangement with nominal savings or financial advantage.

Buying a Timeshare

Timeshare developers offer their units for sale on the grounds of their size, location and amenities. You can purchase straight from the developer, from an unaffiliated company specializing in earnings or from another owner. It’s usually easier to find discounted timeshares from different owners, who may be incredibly motivated to sell, than from developers or businesses, that are in business to make a maximum profit in their transactions.

Basic Ownership Terms

The terms of timeshare ownership normally fall into one of two broad categories: fixed and drifting. A predetermined timeshare means you’ve purchased the right to occupy, or sublease, a specific unit for a specific calendar period every year, usually lasting from a week to a month. Floating or”bend” ownership means you possess the right to a particular period of time, but you have to ask the calendar dates on which that time drops every year, in addition to the unit you’re going to use. The resort sets a range of weeks which you may ask, and might or might not have the dates or the unit available.

Maintenance Fees

Timeshare owners are assessed an annual maintenance fee to pay for the expenses of repair and upkeep of the house. The timeshare developer, or an association of owners, sets the commission every year. There may also be specific tests for improvements to the home, for example parking seekers, curbs and gutters, common-area furniture and decks, or swimming pools as well as other recreational equipment.

Agents and Exchange Companies

If you’re seeking to purchase or sell a timeshare, use caution when dealing with brokers or exchange companies which offer to help, for a commission. The fee–that may come under the description of commission, appraisal fee or marketing fee–should not be paid prior to the purchase or sale is finished. Always investigate any organization or individual promising to act on your behalf from the timeshare market. Get references and call previous customers for their opinion prior to signing any agreement.

Tax Concerns

In case you choose to offer your timeshare, any profit you realize is a taxable capital gain (the timeshare isn’t your principal residence), while any reduction in many circumstances isn’t deductible from the income. You can deduct closing costs, maintenance fees, assessments and depreciation in the gain on sale of the timeshare. In California, moreover, you may deduct property taxes in your own home, as these are billed separately and not to the developer or homeowner’s association that is handling the property. These also can be deductible if you can show property taxes as according to a fee billing from the management.

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