Timeshares offer people the right to spend a week or two at a popular vacation destination while avoiding overbooked hotels and other worries. Shoppers can find them all over the place -- from Grand Bahamas Island to Aspen, Colo. -- and all over the price map, depending on what time of year they want to visit and how much room they'll need once they get there.
"You pay based on the type of accommodation, whether it's a studio, one-bedroom, two-bedroom or three-bedroom, and you pay based on the season that you want to purchase," says Don Harrill. As chief executive of Hilton Hotel's Corp's, Fla.-based time share unit, Hilton Grand Vacations Co., he oversees several resorts around the state and in Las Vegas.
"Having said that, you can actually enter the program at an interval weekly price of as low as approximately $8,500 or go as high as $25,000 to $27,000, depending on the size of the unit and the high season," he says.
Expect
to put 10 percent down
For example, time share buyers generally have to come up with a percentage
of the purchase price upfront and be capable of making fixed monthly
loan payments, just as they would with a conventional, 30-year fixed
mortgage.
About four-fifths of resort developers require a minimum 10 percent down, according to a 1997 survey performed by theAmerican Resort Development Association, a Washington, D.C.-based time share trade group. More than three-quarters of them also said 80 percent to 100 percent of their outstanding loans were made on a fixed-rate basis.
Like home mortgages, time share loans also generally feature tax-deductible interest. Restrictions apply the same way they do with mortgages, however, so a borrower can't deduct against more than say, one primary residence and one timeshare. The rules get even trickier if you rent out your time share for part or all of your allotted time.
Ownership
types differ
Still, a time share buyer doesn't always get the unit's deed the
way home buyers get title to a property. In an increasing number
of transactions, people obtain what is essentially a long-term
lease rather than a deeded ownership right.
"Many people purchase with a 25- or 40-year lease," says Ellen Barr of the National Association of time share Owners, an Orlando, Fla.-based nonprofit organization founded two years ago to assist owners.
"We're working with a group in New Hampshire and many people are at 18 to 20 years who had purchased 25-year leases," she adds. "They don't have much time left ... and they're going to have nothing. I would look very carefully at the deed and how long your ownership is for."
