It’s no secret that our home state of Florida is home to plenty of older Americans and retirees. According to Pew Research Center, 19.1% of Florida’s population is 65 and older, the highest percentage in the nation; what’s more, 53 of 67 counties in the “Sunshine State” have an “above-average share of people 65 and older when compared with the percentage of Americans in that demographic,” according to Pew.
Besides being known as one of the country’s “grayest” states, Florida is also a major hub for the travel, tourism, and vacation industries.
And for older Americans, that combination might spell trouble, according to a fascinating piece from U.S. News & World Report.
As Brian Preston and Bo Hanson put it in their piece, “3 Retirement Lifestyle Mistakes to Avoid:”
“New retirees are often eager to vacation and enjoy some of the wealth they have been accumulating for decades. There can be a huge temptation to buy a vacation home or timeshare in a fun location, since you finally have time to relax… But expensive purchases at the beginning of retirement can turn out to be a big mistake that puts a strain on your finances for years to come.”
In addition to vacation homes and recreational vehicles, Hanson and Preston single out timeshares as “consumer trophies” that can “quickly turn out to be landmines.” Just what makes timeshares such a risky investment for retirees? The writers single out a few key factors:
1.) Ongoing Maintenance Fees
According to one recent study, maintenance fees being “too high” accounted for 66% of consumers’ reasons for exiting a timeshare obligation, and 46% of surveyed owners listed it as their “most important” reason.
Maintenance fees are part and parcel of timeshare ownership; ostensibly for the maintenance and upkeep of resorts, these fees tend to rise year-over-year and can quickly leave consumers feeling trapped or in over their heads, paying more for a timeshare than they would “to use a comparable hotel or resort,” Preston and Hanson write.
2.) Complexities and Hurdles of the Timeshare Industry
Timeshare laws, regulations, and expectations are complex and often obfuscated or glazed-over by salespeople eager to rope consumers in by any means necessary.
As the U.S. News writers put it:
“A healthy dose of skepticism is warranted when an industry attracts clients with free giveaways and high pressure sales tactics. Some timeshares allow you to purchase the rights to a specific week at a vacation property, while others work off of a points system. The administration, research and complexity of using a timeshare has increased as these points systems have been implemented.”
Before buying into a complicated system, ask yourself if the experience – and costs – will be worth it, particularly “if you can get a similar experience without an ongoing commitment” through rentals or modern vacation options.
And for more on the vagaries of modern timeshare ownership, we encourage you to read Michael Finn’s eye-opening article on “The Timeshare Developer’s Dilemma.”
3.) Timeshares Are Not “Vacation Homes”
While buyers are often led to believe that a timeshare is a real estate investment that will have value that can be re-made through a sale or passed on to loved ones, “nothing can be further from the truth,” as Michael explained to the New York Times.
Because the vast majority of timeshare resorts have moved away from tangible real estate ownership and toward a “right-to-use” points model, the residual value and ultimate re-marketability of a timeshare is severely impaired, and most have little to no resale or inherited value, nor do they offer consumers any special tax breaks or advantages in their own right.
For more on why expensive vacation purchases can be burdensome to retirees, we encourage you to read the full piece at U.S. News & World Report here. For even more lifestyle mistakes to watch out for in retirement, check out this compelling piece from USA Today.
Led by Attorney Michael D. Finn with 50 years of experience, the Finn Law Group is a consumer protection firm specializing in timeshare law. Our lawyers understand vacation ownership as well as the many pitfalls of the secondary market of timeshare resales. If you feel you have been victimized by a timeshare company, contact our offices for a free consultation. Know your rights as a consumer and don’t hesitate to drop us a line with any questions or concerns.