Timeshare: After You Buy Tips
Read these 11 Timeshare: After You Buy Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Timeshare tips and hundreds of other topics.
Evaluating a management company
There are several ways to evaluate a management company.
1) Consider where the company is located and how long have they been in the timeshare industry?
2) Find out how many resorts they manage.
3) Check out the quality of those resorts, and find out about maintenance fees?
When you're ready to show your timeshare, will the management company assist you or your agent in showing? Bear in mind that once you're with a management company, if you are not satisfied, when the contract expires you have the option of finding a new one.
Deciding base or traveling
Vacation demands change from one year to another; hence exchange companies often change the starting and ending dates of the season for different resorts and/or locations. Be sure to check often and keep yourself up to date!
Learn the exchange names for your company - high being equivalent to red, medium might be yellow or white, and low could be green or blue.
It all boils down to what you're in the mood to do/go and if your base location is the right spot at the right time!
Management Companies
A timeshare management company is vital in order to uphold the value of your timeshare resort after you buy. Consider keeping your management contracts restricted to no longer than a 2 or 3 year period, and carefully evaluate the contract at the end of the each year for any changes. Discuss all the aspects of the contract with your management company representative.
Points after buying
While earning points after you buy, owners must keep in mind that not all point programs are identical. Check with your resale company before making any moves.
You are also able to earn points after you buy, even when you don't use your unit, by putting part of your unit into an exchange fund to accumulate points. For instance, for approximately a $75 fee you can often lock out a one bedroom in order to accumulate those points. At some timeshares, instead of getting a week each year, you can request a set number of "points."
Maintenance fees
Generally covered in maintenance costs are fees to the management company, housekeeping and repair, utilities, landscaping and if a pool is included – maintenance on that as well. Also there are accounting and legal fees if the need should ever arise. Then there are lease payments, land payments (leaseholds), insurance and taxes and finally for reserves.
Appraisals
Only on rare occasions will you ever need to do an appraisal on a timeshare. Perhaps in an instance for special financing needs or possibly giving as a gift or even an estate valuation purpose.
If is does occur, consider asking the timeshare developer you bought it from or perhaps other timeshare owner who they might have used and would recommend.
However keep in mind that the method of appraising timeshares might not be accurate due to the range of transaction prices and may not be useful except as a rough estimate value.
For financing purposes – you could use a local, licensed real estate appraiser that is a associated with the Appraisal Institute or an Independent Fee Appraiser (IFA).
If you are just interested in placing a value on your timeshare in order to file a claim, report or whatever a "broker's" opinion may be sufficient.
Taxation
Unless you rent your timeshare to others, it's possible that you have no tax deductions available.
Still, if property taxes for your unit are billed separately to you (such as in California), they are deductible. They should be deductible if the resort has them listed separately on your maintenance fee billing.
The interest is deductible if the loan is secured by the timeshare as a mortgage and you deduct no other mortgage interest except on your primary home.
If you finance the purchase through a credit card, the interest will not be deductible.
If you financed your timeshare by taking out a home equity loan/refinancing on your residence, the interest is usually deductible with some restrictions
If there is a mortgage on your main home, interest paid on multiple timeshares will not be deductible. If the timeshares are all in on resort you might be able to view this as one “residence”. The tax laws are not really clear on this issue.
However there is a clear law that there will be no deductions allowed for using it business-wise as an “entertainment facility”.
And just like your main residence, no deductions are allow on your annual maintenance fee for the timeshares as it is used for the likes of utilities, pool care, lawn care, and etcetera!
Time span on timeshare ownership
If chosen wisely, timeshare ownership over a span of several years can offer financial and personal gratification. Financially, if you do the homework, the timeshare can significantly pay for itself over a period of years and become a sound investment for your entire family. With a lifetime timeshare property your have a onetime purchase price and your annual maintenance fee.
Let's do some math. If you, your spouse and 2 children stay in a 4-star hotel with pool and restaurant in the Midwest for just "one" night, it could cost you at least $200. For one week, that is $1,400. Over five years, that cost will increase due to inflation and basic hotel upkeep. In ten years that will change to approximately $3200 per week. Finish the sequence and 30 plus years down the road you might not be taking a vacation unless you take out a second mortgage!
Contracts
In your timeshare contract the first thing you will notice will be the agreement date and who the agreement is between (rental service and you the owner). Next most likely will come the property address followed by the terms. Terms can include termination policy and its individual term and agreements. Your timeshare contract will also include authority rights given to the rental agency, duties of the rental agent (including policies and collection), duties of the owner (listing of rental, start to stop reserve dates, property description, compensation to rental agent and etc.), liabilities and any other miscellaneous notices or requests.
Rental Income
Regardless of whether you were in the property for one week or multiple weeks, you must report the rental profit on your taxes. However, you can also counter balance losses from certain rentals against profits on others to assist in diminishing the net taxable income, but deducting a net loss is still dependent upon laws and regulations.
Owner's responsibilities and liabilities
When you make the decision to purchase a timeshare, you must also commit to mainitaining the timeshare. There are a varying set of rules that come with timeshare ownership.
Owners responsiblities:
1) Stick to the resorts policies
2) Adhere to reserved dates, regardless of whether the owner uses it or rents it out for that specified period.
3) Keep the rental agency abreast of all situations and inform them of any changes that have risen. If need be - compensate the agency.
Owner's liabilities:
1) The owner understands the agent is not guaranteeing any amount of days of occupancies or particular income but will put their efforts into generating a competitive rate in all rental situations.
2) The owner will considered the agency blameless in damages or expense sustained either by the owners or other persons using the timeshare property.
3) If the owner seeks retribution in regards to any damages, it will solely be upon the owner and the agency will not be included.
| Guru Spotlight |
| Linda Handiak |
