A timeshare is a property in which multiple parties purchase the right to use the property for a certain amount of time each year, generally a week to a month. The timeshare is jointly owned by all of the parties, but is managed by a single company. These timeshares may be purchased for the pleasure of the owners. They are usually difficult to use as an investment vehicle.
Buying a timeshare is a different financial investment than buying an actual piece of property. This is because, when a person buys property stock, he is able to make improvements to the property and have the sole right to sell it. However, buying a timeshare is closer to purchasing the right to rent the property for a set period of time, as the owner must continue to pay maintenance fees throughout the life of the property.
Investing in Timeshares
In some cases, timeshare companies may pitch the purchase of timeshares as an investment opportunity in which the owner stands to see the value of their property appreciate. In such a scenario, the timeshare that the person bought would, like other kinds of real estate, appreciate in value as the supply of timeshares diminished and the demand for them increased. In the meantime, the owner could use the timeshare himself.
According to Lisa Ann Schreier, author of "Timeshare Vacations for Dummies", timeshare properties almost never increase in value. In fact, because the market is glutted with timeshares, it is far more likely that the value of a timeshare a person purchases will in fact fall. While some timeshares in select locations may increase in value, this is a relatively rare occurrence, making them an extremely risky investment opportunity.
While buying individual timeshare stock may not be a good investment, it is possible to purchase stock in companies that sell timeshares. Many companies that specialize in selling timeshares, as well as some companies with timeshare divisions, are publicly traded. Because these companies sell and manage timeshares to new timeshare owners, their profits are not based solely on the market for resold timeshares.
- "Timeshare Vacations For Dummies"; Lisa Ann Schreier; 2005
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