Have you ever considered purchasing a time share? I haven't, but for the person who is looking for one, now could be the best time to buy. Just make sure that you familiarize yourself with the fine print first.

Neighbors of ours recently returned from a trip to the shore where they stayed at a friend’s house. It turns out that these friends lent them the place as it was one of the weeks in their “time share” and was their turn to use it, but they couldn’t. Unlike some time shares, this arrangement was a ¼ share where the owners had 13 weeks scattered throughout the year when they could visit the place. Most of the summer months are enjoyed by the co-owners, with the off season rented out to vacationers or left unused.

Our friends aren’t interested in buying a share, even though one is available, but who can blame them? Time shares have gained and maintained an awful reputation over the years, a money pit for some owners or an inconvenient home for others.

Not every time share deal is a disaster, however, as I have learned that several reputable companies have jumped in and started offering time shares including Disney and Marriott. I can think of one Marriott destination at the shore that would make a wonderful time share, a beautiful retreat that could be worth the investment especially for frequent shore visitors and people who don’t like to maintain a beach cottage.

But, before you opt for a time share there are some things that you should know:

Prices can be grossly inflated. If you are buying a new time share, you’ll pay the full price which includes a hefty commission mark up. Instead, why not consider buying someone else’s time share? Likely, they’re looking to unload their share, especially in a soft market. I can’t recommend anyone off hand, but when I googled “time share resell” quite a few sites popped up in the results.

Not a good investment. I don’t know anyone who has made a profit off of a time share. Let me go one step further – I don’t know of anyone who invests in real estate who holds a time share. Given that they aren’t a good investment, why buy one? For the reason I mentioned previously: a time share could give you a minimal hassle place to stay when visiting your favorite resort.

Maintenance fees and taxes can be costly. Not only do you need to buy your portion of the residence, but you’ll be responsible for your portion of the taxes and upkeep. You’ll want to learn what your share of the expenses will be and how much you can expect to pay over the long haul which can include costs to replace a roof, provide insurance coverage, and more.

So, is there ever a right time to buy a time share? I would think that time would be now and for a price that is well below market rate. If you have the stomach for this type of purchase and the deal you get looks to be a solid one, then considering a time share might be worth your while.

Just don’t snag a good deal because it looks good on surface – read the contract and weigh your options.

Adv. — Are you looking for a home loan or considering refinancing your home? Interest rates continue to remain low and lenders are looking for new business. Now could be a good time to secure a home equity loan or equity line of credit, just what you need to help you expand your home or consolidate expenses.

Photo Credit: KLP

Tags: beach rental, equity line, home equity, home finance, home loan, mortgage, refinancing, time share, timeshare

Lost among the news about the current sub-prime mortgage meltdown is the housing market for second homes. Though the news media is focusing on the problems people are having with their first homes, there is plenty of news not being reported about vacation homes.

Vacation homes are those secondary houses people own at the shore, lake, or other favorite vacation spot. Most are small residences though some owners have lavish estates rivaling their primary home in size and in value. You’ve seen these homes spring up along prime waterfront property over the past two or three decades — houses which dwarf the cottages which once dotted most communities.

If you are already familiar with a particular vacation market, you probably have witnessed a recent trend: plenty of homes are for sale and those that are selling are going for a heavy discount. One of the most stressed markets offering fantastic deals is Miami where a spate overbuilding has forced prices down in a hurry.

For people wanting to come away with a great deal there are some things to consider:

Take Your Time — Finding a vacation home for a very low price isn’t difficult to do. But, pouncing on the first property that comes along can show that you are being too hasty.

Because you’re in a buyer’s market you’ll want to determine a few things first:

• Are you familiar with the area where you want to buy?

• If purchasing a condo, how many units are vacant? There could be a reason why your unit is going for a song — the association managing it could be bankrupt.

• How often do you plan on visiting your second home? Do you plan to rent it out? Would you do better simply renting a home every year instead?

• What are some of the related fees to managing the property — i.e., garbage removal, landscaping, outside maintenance, etc.?

• Based on the information available, will your second home appreciate in value? You may have no plans on selling, thinking that your children will enjoy your home when you are gone. Don’t count on that — they may not be interested in maintaining the property later on.

Financing Your Purchase — many second home buyers tap the equity in their first home to buy their second home. But, you may not want to put your first home at risk by purchasing a vacation home. Consider:

• Will you be able to find financing for a vacation home?

• What rates are being charged? Some lenders avoid second home financing while others specialize in financing vacation homes. Will you have to pay a premium rate in order to finance a second home?

Insurance costs can be a deal breaker especially for homes along the ocean. When Florida and New Orleans were ravaged in 2004 and 2005 by a series of hurricanes, insurance companies jacked up their rates, sometimes three- or four-fold to cover their risks. Can you afford to pay $4000 in homeowners insurance annually on your beach property?

The good news is that many second home markets are likely to be depressed for the next few years, taking the pressure off of you to make a fast decision. Look around, shop around and you’ll come up with a deal that is fantastic and one you can live with for many years.

Tags: beach house, beach rental, lake house, Miami, resort, second home, vacation home