Bensman Risk Management, Inc.

Insurable Interests

Bensman Risk Management, Inc.
2333 Waukegan Road Suite 275
Bannockburn, IL 60015
847-572-0800 Phone
847-572-0502 Fax

Insurable Interests may offer general financial, insurance, tax and business ideas. However, due to the ever-changing tax laws as well as the complexity of the financial industry, you should seek professional advice before implementing any of the ideas contained in this newsletter. The Bensman Group, Bensman Associates Ltd., Bensman Risk Management, Inc. or Schemata, L.L.C. assumes no liability whatsoever in connection with the use of this newsletter.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), Member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS). Kestra IS and Kestra AS are not affiliated with The Bensman Group, Bensman Associates Ltd., Bensman Risk Management, Inc. or Schemata, L.L.C.

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Insurable Interests

Vol. 3, Issue 12August 2008


Timeshares: Disaster or Delight?

On the surface, it seems like a fine idea: You pay an upfront fee and a small yearly amount that entitles you to a week or two in a luxury resort property at one of the top vacation destinations in the United States or abroad. But where timeshares are concerned, that is not always the way it turns out.

The cost of a timeshare depends on the size and location of the property and on when you get to use it. You will pay more if you finance your timeshare, and you also usually pay an annual maintenance fee.

What if you don't want to go to the same place every year? You can trade your timeshare – you will use someone else's property, and they will use yours. In theory, this makes timeshare even more attractive. But in reality, arranging a trade can be time-consuming and expensive, and you may not be able to get the week you want in the place you want.

Even if your timeshare ownership goes well, things could get more difficult if you decide you want to sell it. The market for timeshare resales is extremely competitive, and you may not get anywhere near your original price.

If you are thinking about timeshares, ask yourself some basic questions:

  • How do I like to travel? If your idea of a vacation is a road trip across the West, then a timeshare is probably not a good idea for you. You also are not a good timeshare candidate if you like to travel to many different places. But if you like to return to some favorite places and if you prefer to spend your whole vacation in one place, making day trips or just staying put, you may want to explore the idea.

  • Am I sure I really like this destination? Even though you can trade timeshares, you are likely to end up using yours the majority of the time. Do you want to go there on a regular basis? Think about how it will fit into your lifestyle several years down the road. For example, it may be a great place for the kids, but will you feel comfortable when it is just the two of you?

  • Do I see a timeshare as an investment? Don't. If you define an investment as something that should make money, a timeshare is unlikely to fit that definition. In fact, you may lose money when you sell it. But if you are looking at it as a way to pay in advance for vacations you would take anyway, it may become more attractive.

  • How flexible am I? It can take a lot of effort to work out a trade if you decide you want to vacation at a different time or to a different place. Are you willing to put out that effort?

  • Do I understand the fine print? Timeshare contracts can be confusing, so make sure you understand what you are signing. Timeshares are often sold at high-pressure sales presentations, but it is generally a bad idea to make a decision immediately – go home and think about it first.

If you want to explore the timeshare option further, do your research. Some resale bargains are available – you can even check out ebay. Hotel chains are getting into the timeshare market with "branded properties," and they may offer more flexibility than traditional timeshares. The key to making a timeshare work is knowing what you are getting into.

photo courtesy of stock.XCHG

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