Downward Shift in Timeshare Popularity
By: investUSA360 •
The once thriving timeshare industry seems to be spinning its wheels trying to hang on instead of falling into a period of decline. Timeshare owners, fed up with ever-increasing maintenance fees, are seeking the assistance of third-party timeshare exit services to unload their shares.
But what’s causing this downward shift?
Quite frankly, timeshares are not popular with Generation X or younger generations. Timeshares rose to their pinnacle during the 1970s when The Greatest Generation was flocking to Florida for extended vacations. They left their units to their Baby Boomer children; whose friends and colleagues were green with envy over their annual retreat and bought units of their own.
Enter Generation X. We who became of age in the late 1980s and early 1990s had a fascination with a new technology, the internet. We were able to harness that technology to research better, cheaper options without being tied down to one unit every year. It made booking flights and hotels possible with just a few keystrokes. The world was ours to explore.
Now, as our Baby Boomer parents are unable to travel as frequently to their timeshares, we began to loathe the concept. Mom and Pops are tied down to an endless contract of $800 per year on a unit that their declining health no longer allows them to enjoy.
They will eventually leave their units to us.
At some point, timeshares went from a cool concept to “for old people.” We might be fiftyish, but we don’t consider ourselves old people.
And I, personally, definitely don’t want a timeshare. I want to explore the beaches of Florida when I retire in a few years, but I also enjoy the vibrant sights of Mexico and see the rocky coast of Ireland. My generation, and those younger than me, far prefer an Air B-n-B over a timeshare.
With a timeshare, those travel dreams won’t be an option. A timeshare would suck up a massive part of the annual vacation budget, squashing those travel plans.
Are timeshares always passed on to the heirs?
When a timeshare owner passes away, the timeshare becomes a piece of the estate. Timeshares pass through probate and then to the next-of-kin.
The next-of-kin is left with either a great gift or an albatross, depending on whether they love it or hate it.
Getting rid of the timeshare means legal fees, selling the timeshare at a loss, or declining the inheritance and allowing it to go into foreclosure.
The rise of the third-party exit company
All that background information was to illustrate how third-party exit companies rose into existence. They were set up to serve the need of people who needed to get rid of unwanted timeshares.
Unfortunately, some of those companies have also steered consumers wrong. Some timeshare owners have used these services to unload their timeshares with great success.
However, other timeshare owners who have used these third parties have ended up with black eyes on their credit report, lawsuits from their timeshare companies, and judgments to pay back maintenance fees.
The timeshare companies will not give up without a fight. Large timeshare companies like Westgate Resorts, Wyndham, Bluegreen Vacations, and Diamond Resorts have vowed to use every legal means at their disposal to hold timeshare holders to their agreements.
Risks of timeshares
Besides the risk of leaving a legal nightmare to your children, there are other inherent risks with timeshares.
Here are a few:
- Maintenance fees escalate faster than the rate of inflation.
- Assessment fees are unpredictable. These result from necessary upgrades, increases in management companies, or weather damage from storms or hurricanes.
- They are difficult to sell.
- You may not even be permitted to transfer or sell your shares legally without first contacting the timeshare management company.
What’s a safer investment in Florida?
While some people still love timeshares and find them to be a convenient way to budget for a vacation.
If you are not convinced that timeshare ownership is for you, what’s a safer investment?
While timeshares are slipping in the popularity column, other vacation options are rising to the top. Today’s travelers love the convenience of renting a condo or home virtually anywhere around the world on apps on their smartphones.
Investing in rental properties that you own 100%, rather than just shares for a week at a time, is more beneficial to you in the long run.
First of all, you can select a popular, in-demand location near Florida’s beaches and resorts. You have the option of “booking” your vacation at the time best for yourself and renting out the home for the rest of the year. Your family can still enjoy the getaway, but you won’t be strapped paying all those timeshare fees.
Second, timeshares rarely (if ever) appreciate in value. Florida remains a hot real estate market. Your safest bet is to purchase real estate in either Orlando and Miami. This will help you maximize your rental capacity. After all, nobody can resist the lure of these vacation paradise cities.
Third, you could purchase an independent boutique hotel from a distressed owner and rent out multiple rooms each day. This is a bit of a more significant undertaking, but the risk is worth the rewards to many developers.
The Bottom Line
There are great ways to invest in vacation properties in Florida.
Timeshares will always hold a certain appeal for one reason--the relatively low price of ownership. For $20,000 and that yearly fee, you can carve out a little slice of Florida vacation heaven for yourself.
However, if you want to have a vacation home that you can put your personal stamp on and add to your portfolio with certainty that it will appreciate in value, then purchasing an apartment or a condominium is most likely the better option for you.
Whatever approach you decide to take, one thing is definite. Timeshares are waning in popularity due to the rise of online apps that allow vacationers to book their trips when and where they want.
timeshare, rental in Orlando, vacation homes