Sales of vacation homes were up 10 percent last year -- accounting for 11 percent of all home sales -- according to the latest figures from the National Association of Realtors. But while vacation home sales are on the rise, Fitch Ratings reported that U.S. timeshare purchases dropped again last quarter.
As consumers look to purchase a piece of paradise, how do they decide between an investment in full-time or part-time ownership -- and why might the popularity of timeshares be waning?
Though a seemingly affordable way to get into the vacation property market, timeshares are not always a wise investment. As the CEO and Founder of VacationHomeRentals.com, I'm sharing the top benefits of purchasing a vacation home versus a timeshare:
1. No flat maintenance fees - Most timeshares require owners to pay annual maintenance fees that run at least $400 and increase every year of ownership- in addition to the mandatory fees for use of amenities at the resort. With private ownership, the expenses are more tied to the property and can be managed and controlled by the owner. The upkeep on a private rental property can also be expensed during tax time.
2. More personal - By purchasing a home, owners can make the space personal by choosing paint colors or decorating to fit the style of future renters and their own personal preferences. Typically with timeshares, the home can't be altered unless all other co-owners are in agreement.
3. Flexibility - The selected weeks are rigid and if you need to adjust schedules, it is nearly impossible to swap. Certainly during high season, timeshares book up quite quickly and often only non-desirable locations are available. However with private ownership, you call the shots on the weeks that you want for use and the weeks that you wish to offer up for rental use.
4. Resale Value - If your home is near the water, well kept, or in a desirable location selling is typically favorable- especially over the long term. However, timeshare resales typically result in low prices and take a long time to offload.
5. Time to buy is great - With many popular areas like Florida and California working off inventories of foreclosed homes, historically low interest rates, and the economic outlook brightening, many would-be investors are ready to take advantage of a great vacation home real estate market.
Do you think purchasing a vacation home is a better option?
Vacation Home Purchase vs. Timeshare Ownership
As consumers look to purchase a piece of paradise, how do they decide between an investment in full-time or part-time ownership -- and why might the popularity of timeshares be waning?
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