Q. After seeing family members have some really bad experiences with timeshares I'm trying to compile a free download help guide of how to get out. My family members did get out, but I was curious why their financial advisers didn't advise them a. to not purchase, or b. get out. I polled them, and they said they all told their financial advisers about this liability in their portfolio, but none of them said a word about it. I think this is strange? Opinions from actual CFP greatly appreciated!
A. Timeshares are a discretionary expense to prepay for vacation accommodations. The sales pitch is:
- You are a fractional owner in a property
- There is a financial advantage to taking vacations using a timeshare
- If you don't/can't use the timeshare, it can be rented out
As you have learned, the sales pitch is not a balanced assessment:
- Annual maintenance fees increase over time, making them less competitive against just renting for a few days.
- There are few buyers if you want to sell in order to end the annual fee. Other vacation options are cheaper and can be exercised at any time.
- The usage restrictions (entire week, single location, popular weeks blocked out) and limited locations, if the timeshare remains in business, limit the rental opportunity.
Since a timeshare is not an investment any more than a vehicle is an investment, it cannot be managed as a liability. So, what's your question? It is a purchase that has already been made. There is no reason why a CFP would tell a client that they made a poor purchase choice.
The correct question is: I want to save money on vacation expenses and not lose money on the deal. Will a timeshare arrangement meet those requirements?
As you already know, the answer is that it will not.
It is NOT a liquid asset since all that you are buying is a "right to use".
There is no guarantee that you can sell what you bought at a similar price.
Your vacation choices may change over time such that what worked at the time of purchase is no longer suitable in the future. You are "locked in" to the options available at the time of purchase.
- You are a fractional owner in a property
- There is a financial advantage to taking vacations using a timeshare
- If you don't/can't use the timeshare, it can be rented out
As you have learned, the sales pitch is not a balanced assessment:
- Annual maintenance fees increase over time, making them less competitive against just renting for a few days.
- There are few buyers if you want to sell in order to end the annual fee. Other vacation options are cheaper and can be exercised at any time.
- The usage restrictions (entire week, single location, popular weeks blocked out) and limited locations, if the timeshare remains in business, limit the rental opportunity.
Since a timeshare is not an investment any more than a vehicle is an investment, it cannot be managed as a liability. So, what's your question? It is a purchase that has already been made. There is no reason why a CFP would tell a client that they made a poor purchase choice.
The correct question is: I want to save money on vacation expenses and not lose money on the deal. Will a timeshare arrangement meet those requirements?
As you already know, the answer is that it will not.
It is NOT a liquid asset since all that you are buying is a "right to use".
There is no guarantee that you can sell what you bought at a similar price.
Your vacation choices may change over time such that what worked at the time of purchase is no longer suitable in the future. You are "locked in" to the options available at the time of purchase.
Do you know of any global property website guide?
Q. Do you know a place where I can find information about buying residential property not just on my place but on the "global property" market? I wanted to try out and do buying and selling of houses, and I wanted a place where I can read about this kinds of stuff, like house prices, house rents and yields, buying guide, etc. Hope there are Realtors out there who knows a good site or two.
A. Global Property Guide http://globalpropertyguide.com is a site which provides all the data you need on buying/renting houses or appartments. It has a Buying Guide, an estimate of house prices (only in upscale areas), info on taxes, market trends, etc.
escapeartist is helpful too but in my view, global property guide is more informative. Plus they do research on a lot of countries.
hope this helps.
escapeartist is helpful too but in my view, global property guide is more informative. Plus they do research on a lot of countries.
hope this helps.
What are the Pros and Cons of Renting your home as an Investment? How do you make the investment work for you?
Q. To your advantage that is?
This is all new to my husband and I and we're looking for feedback from people who have experience in this and are making money in this type of investment. Thank you!
This is all new to my husband and I and we're looking for feedback from people who have experience in this and are making money in this type of investment. Thank you!
A. There are not enough pros to offset the biggest con- that is you'll eventually lose the excellent tax benefits when you sell your home. As a married couple you'll shelter up to $500,000. in capital gains. This is only for principal residences and more particularly you must have lived in the house three of the last five years.
Sell your home- take the tax advantage then consider buying an investment property with some of the proceeds. And find a competent real esate broker to guide you through the process.
Sell your home- take the tax advantage then consider buying an investment property with some of the proceeds. And find a competent real esate broker to guide you through the process.
Where would i find a guide to living in Berekely?
Q. I'm going to school there next year and I'd like to find a web guide. A sort of Cal for Dummies or something
A. You could just ask some alumni.
What do you want to know? I can tell you where to get some good food, coffee, best study places, best places to nap, best places to make out (hint: the top of the Campanile), etc.
Join a social networking group. MySpace has many groups for students and alumni.
also, avoid renting from Reddy Realty/Everest Properties. Those people are sleazy.
What do you want to know? I can tell you where to get some good food, coffee, best study places, best places to nap, best places to make out (hint: the top of the Campanile), etc.
Join a social networking group. MySpace has many groups for students and alumni.
also, avoid renting from Reddy Realty/Everest Properties. Those people are sleazy.
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