The U.S. housing market seems to have stabilized, but one segment that continues to have difficulties is that involving
timeshares:
Unable to sell his parents’ ocean-front timeshare for the past year,
David Suder became so fed up he offered to give it away. They paid
$8,000 for the Orange County, Calif. unit a decade ago, but since there
are no willing buyers, and his 81-year-old mother, now a widow, can no
longer afford the monthly maintenance fees, Suder says he doesn’t have a
choice. The San Diego-based real estate investor is offering the unit
for free in the hopes that someone will take it before his mother dies.
“I don’t want to inherit it,” he says. “I want it to go away.”..
Experts say even in better times, most sellers never saw a return on
their investment. “Very few timeshares increase in value,” says Alisa
Stephens, executive producer at RedWeek.com. As values sink and
desperation grows, the number of owners giving their timeshares away for
$1 – or less — has doubled in the past year, says Brian Rogers, of
Timeshare Users Group, an owner advocacy group. “There’s never been a
worst time to try to sell a timeshare,” he says...
Here's one reason why:
To make up for these losses, resorts have been increasing the
maintenance fees on the individuals who continue to use their
timeshares. Average annual maintenance costs hit an all-time high of
$731 in 2010, up more than 8% from the year prior, according to the
latest data from the American Resort Development Association. Experts
say those costs are still rising.
Personally, I wouldn't want to try to call a bottom by buying distressed timeshares. A better idea for taking advantage of the situation would be to rent a timeshare for a vacation:
Before selling at a huge loss, timeshare owners might want to consider
some alternatives. Stephens suggests renting the timeshare to
vacationers at a price that covers the annual maintenance fee but is
cheaper than what travelers would pay to stay at a hotel.
Further details at
Smart Money.
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