Timeshare Attorney Las Vegas
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Timeshare Asset Management
Timeshare asset management is a complex process that requires financial and legal expertise. Timeshare Defense Attorneys are here to help.
What Is Asset Management?
Investopedia defines asset management as “the practice of increasing total wealth over time by acquiring, maintaining, and trading investments that have the potential to grow in value.”
You might be considering investing in a timeshare property after a sales pitch that touted timeshare property ownership as an excellent investment.
Unfortunately, the real estate industry has recently seen many timeshare investment scams. As a real estate investor, you want to ensure that your timeshare asset is managed properly and legally.
If you need a hand, a timeshare attorney in California can assist you with all things timeshare related. A timeshare defense attorney can help you understand the process of managing your asset, evaluate your legal rights, and protect your financial interests.
Is a Timeshare Considered an Asset?
Timeshares are not investments. Investments can be made to gain or generate revenue and value. It’s not likely that timeshares will achieve any of these goals. Most timeshares are notoriously tricky to sell. When this is possible, it is almost always at a massive discount compared to the purchase price.
Timeshare salespeople use pressure selling tactics after a slick timeshare presentation. Pictures of an idyllic ski resort or the lure of the Disney Vacation Club tempt many owners. When a timeshare owner tries to sell, they do not have these questionable techniques to strong-arm people into buying a liability dressed up as an asset.
A timeshare is not an asset. It is a liability. Unlike a real investment property in which the value of the real estate increases over time, timeshare properties decrease in value and come with a basket of recurring, ever-increasing annual costs such as a yearly maintenance fee.
Can a Timeshare Be Considered an Asset on a Credit Application?
Your timeshare will not be considered an asset on your credit application. It is regarded as a liability. Proof of regular payments and an absence of defaults evidence your ability to meet your debts.
Does Timeshare Count as an Asset in a Lawsuit?
In most divorces, neither spouse want to take the timeshare. They are considered to be liabilities. There may be exceptions for high-value timeshares, but these are not representative.
If you have a timeshare and are getting divorced, see us for a free evaluation of your case. We are in many locations, including Vegas, Florida, and California – all timeshare meccas. Schedule a consultation with a timeshare attorney in Florida today!
Is a Deeded Timeshare Worth It?
Some people believe that a deeded timeshare is an investment or asset. This is untrue. A deeded timeshare usually comes with its own fees and often requires a yearly maintenance fee. In addition, it is almost impossible to sell a timeshare – whether it’s deeded or not – for the same amount it was originally purchased.
If you’re considering purchasing a timeshare, speak with a timeshare attorney in California first for legal advice and sound financial guidance.
Cost of Owning a Timeshare
Even when timeshares have been fully paid for, they are not cost-free after the initial purchase. Timeshare owners must also pay monthly maintenance fees to the timeshare management company.
These fees are then used to cover the costs of property maintenance. Fees are payable regardless of whether you use your timeshare or not. Worse still, the fees increase annually as long as ownership continues.
Assessment costs are also payable in perpetuity and can run into thousands of dollars. Property taxes, special assessments for more significant repairs, or even natural disaster repair costs are usually covered by timeshare owners who are required to chip in.
You might recover these costs by renting out your vacation property to generate income in your absence when you cannot or don’t want to use your allotted time.
When calculating the cost of vacation ownership, you would do well to compare the cost with other options available, such as hiring a holiday home for a week through vacation rental management. Inevitably this is cheaper and does not tie you into lump sum payments or annual maintenance fees.
What if I Can’t Pay Cash Upfront?
A timeshare resort requires a lump sum payment if you decide to purchase it. Many timeshare owners finance the purchase through a mortgage. Because timeshares have suffered a steep decline in value, banks are reluctant to lend money.
Personal loans and credit cards have much higher interest rates, so avoid them. Development partners offer financing to facilitate the deal, but their interest rates are typically very high.
Before committing to anything, speak with a Las Vegas timeshare attorney to ensure your rights and interests are protected.
Risks of Buying a Timeshare
When you buy, you are paying a significant amount for something that will immediately decrease significantly in value. Some people are okay with this and spend many years enjoying their timeshare. In addition, you become liable in perpetuity to pay all maintenance costs and assessments every year, whether you use the facility or not.
Even once you have finished paying the mortgage, the annual dues continue – and they typically increase yearly. You cannot simply exit timeshare ownership due to a lack of exit clauses. The only way you can exit is to sell it back to the developer or sell it privately on the secondary market.
In some cases, developers are pressured to buy back their licenses, but they resist this because they lose perpetual recurring revenue. Private sales can happen but expect a massive loss if you can find someone to take it. Renting out your timeshare to pay the annual costs is also not easy, and many scammers will try to steal your money.
Timeshare Points May Lose Value Over Time
The owners of some timeshare schemes can change their timeshare dates and swap locations. In some cases, owners can even bank unused points. This sounds great but has some disadvantages. While points offer greater flexibility, they are subject to inflation. What 100 points buy today might cost 150 points tomorrow, depending on the resort developer.
The Fees May Become Unaffordable
Whenever you commit to paying annually, you need to know if installments will increase. This will allow you to assess the actual cost and the risk of committing.
Annual assessment rates, maintenance fees, and mortgage costs can all increase. Mortgage costs attract interest, and late payments are subject to penalties. Assessment rates and maintenance fees typically increase between five and ten percent per year.
Only commit if you know you can handle a change in financial circumstances. Plan ahead – foreclosure and a lousy credit rating may beckon if you fail to consider these risks.
A Timeshare’s Value Won’t Appreciate
Timesharing does not appreciate. A timeshare resale is difficult. You face competition from people who give their timeshares away for free. They usually want to rid themselves of annual fees, draining their resources. They are trying to cut their losses. Everyone knows this, so the prices are rock bottom.
Value of Timeshares
The market value of anything is what a willing buyer will pay a willing seller for that commodity in the open market.
The used timeshare market is full of timeshares sold for next to nothing by desperate people. Even for a timeshare purchased in the more traditional secondary market, you are likely to buy at a discount of $10,000 or more off the retail price.
The economic value of the vacation home, although it provides an excellent vacation experience, has swimming pools, an in-unit laundry, excellent timeshare units, and all the timeshare company amenities does not increase in value.
Performance Timeshare Property Management
The timeshare industry is well known for housing scammers of all shapes and sizes. Some people will be queuing to scam you of your money if you are trying to exit, sell or rent your timeshare. One such alleged scheme is an outfit that operates under a performance asset management timeshare.
It would appear that they cold-call timeshare owners and offer to help them to sell their timeshares, insisting on money up front, which gets paid into a Mexican bank account. Many people claim to have been swindled out of their money. Beware of fraudsters and scam artists.
It’s safer to appoint a qualified attorney if you have issues with timeshare contracts or developers. Timeshare Defense Attorneys can help.