|Buy a Timeshare to Use
or to Trade?
Two very common and very different strategies when deciding on a Timeshare!
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Timeshare: Buy to Use or Trade?
So you are looking to buy a timeshare? First off congratulations on finding TUG before making that purchase, you are already well ahead of the game!
This article is meant to assist folks in answering a very common question everyone has when considering the purchase of a Timeshare. Should I buy where I want to go on vacation every year? Or should I buy a resort for its ability to trade with other Timeshares?
As with most questions in the Timeshare industry, the real answer is "It Depends"!
Not terribly helpful I know, hopefully the remainder of this article that will discuss the pros and cons of each of these decisions can help you make this decision and allow you to purchase the right Timeshare for you!
Buy where you want to Go!
This is pretty much the suggestion and mantra of most TUGGERS when someone new asks this question on the forums, in fact here is a very recent thread on this very subject!: Buy to use or trade?
The logic behind buying a timeshare in the location you actually want to use, is that no matter what happens, you will always have the ability to vacation at a destination you and your family will enjoy! In this situation you never have to worry about finding an exchange you will like, or having to pay additional exchange fees. You will always be able to travel to a destination you know you enjoy!
Obviously the downside to this is that you limit yourself on where you can go other than your home destination and are at the mercy of Exchange availability (both in the large exchange companies like RCI/II, or if your resort has its own internal exchange system). This can be seen as both a negative or a positive depending on the level of dedication and interest you have into planning your vacations! For many folks its a challenge to find that perfect exchange, for others a hassle! It is up to you to decide which best fits you, but it is important to think long term as while timeshares are easy to buy, they are much more difficult to get rid of and the "perfect" timeshare for you might not be the case in 10 or 15 years!
The most common example of this is buying in Orlando/Disney, as your young family may love going to see Mickey every year now, when they turn into teenagers that will likely wear off as we see happen so often these days! At this point you now have a low demand/value week at the location with more timeshares than anywhere else on earth so your trade and resale value will be extremely low!
Buy for Trading Power!
It is no secret that more and more Timeshare owners today want flexibility with their vacation ownership, points systems, internal trading networks, floating weeks, all cater to individuals who want more and more options when it comes to going on vacation year after year!
This is the driving force behind the theory of buying a timeshare for its ability to trade, many times referred to as its "Trading Power". When you buy a timeshare that has a very high Trade value, you open yourself up for a huge selection of vacation destinations through either a large exchange company, or your resorts internal trading system!
Basically when it comes to exchanging a Timeshare, the value your timeshare has in terms of its trading power is going to almost always determine what options you have to choose from within that Exchange system! If you purchase the most valuable timeshare interval available, you will in most cases be able to trade for anything and everything you want at any time! Whereas purchasing a low end interval will generally only allow you to pick and choose from all other low end units available within whatever Exchange pool you are searching in!
It is really quite simple, if you purchase the highest demand week you can, you will of course maximize your options in terms of trading that week for other weeks each year when you decide to go on vacation!
As for the downsides to this, there are a number of them! The most important of which is that you are now dependent on exchanges to vacation where you want to go! This requires exchange fees to be paid each and every year, this also requires you to closely monitor the availability of exchange weeks each year to be able to reserve the week you want! Even if you have plenty of trading power to obtain any week within the exchange pool, if those high demand/value weeks are not available that year, no amount of trading power is going help you get that vacation!
For many, this risk is far outweighed by the reward of being able to vacation at a different location year after year, but for many Timeshare owners, this comes as a shock the first time they cant trade for something they really want! After all, just about everyone is "sold" on the idea that buying a Timeshare means you can trade for anything, anywhere! Sadly everyone eventually finds out this is a rather impressive stretching of the truth!
Anything else I should know?One often overlooked option for exchanging in the Timeshare industry is Timeshare Rentals! I would guess that more than half of owners have no idea that privately renting timeshares is possible, and this is a shame! What you ask does this have to do with exchanging? Well if you look at it from a bit of a different angle, you can actually obtain free exchanges by doing rentals! Investigating timeshare rentals is something that each and every owner should do even if they are not interested! It allows you to see the value that your unit (and the ones you want to trade for) actually is in monetary terms!
For example, if you can find a rental at the resort you want to visit for $1500 dollars, you might immediately think that "well if I exchanged for that week, it would only cost me the RCI exchange fee which is far less"! While that is "technically" true, you neglect to factor in that you also have to pay your own resorts annual maintenance fee despite depositing that week into RCI and not using it! So your true cost is the sum of your annual maintenance fee, plus the exchange fees!
If for instance you chose the rental route instead and rented out your own timeshare for near the cost of your annual maintenance fee (lets just use $1000 as an example). You now have $1000 to use towards a rental of another Timeshare anywhere in the world! This opens up many doors in terms of renting someone else's timeshare, and in many cases you can find some absolutely amazing deals in the Timeshare Rental market!
I have personally rented a number of Timeshares from TUG members right off the marketplace using Wish Ads, each and every one of these rentals has been an amazing deal (3br units in las Vegas for $1000 for the week as an example). In some cases you can rent out your own week and break even or even make a profit compared to your annual maintenance fees, and use that to put towards a rental of your own wherever you want to go!
The obvious downside to this is that you are limited to the availability of the Timeshare Rental market, which is always going to be significantly smaller than the vast exchange pools RCI and II offer! It is however at least worth investigating! TUG is all about education, and the more you know, the better off you will be!
For those more interested in learning about Timeshare Rentals, here is our How to Rent your Timeshare article
Sell, Rent or Exchange your Timeshare for free!