Warning: Timeshare pitch ahead

If you're among the senior travelers heading out soon for a warm-weather vacation in a popular destination, you're setting yourself up for a possible timeshare pitch. They're often disguised as opportunities to get great discounts on some activity or another, but the real purpose is to expose you to a timeshare hard sell for a few hours or even all day.

Make no mistake: These pitch-people are good. Although the incentives they dangle in front of you will look attractive, my suggestion is "just say no." The timeshare idea is a good fit for lots of seniors, but you should buy rationally, not as the result of "buy it right now" sales pressure. Here's a brief recap on the basic timeshare idea, plus a few of the red flags.

The deal

A typical timeshare contract lets you occupy a vacation property during a specified interval every year. Intervals are usually sold in increments of one-week or in multiples of a single week, often Saturday to Saturday.

The property

Most timeshares are units in a condo complex, although some hotel chains are selling some rooms as timeshares. The typical condo has more space than a conventional hotel room, plus kitchen and laundry facilities. Most condos are in popular vacation areas, such as Florida, Hawaii, the Colorado mountains, Mexico, and the Caribbean.

Exchange programs

When you buy a timeshare, you usually become part of a program that allows you to "deposit" your interval into a "space bank," and exchange it for an interval in some other participating unit, just about anywhere.

Buying in

Timeshares entail several payments: You start by paying a one-time buy-in price for your interval; then you'll have yearly maintenance fees and other charges. The buy-in price on a new low-end timeshare can be as low as $5,000; at the other end, you can pay more than $300,000 for a program that features prime villas in top-end beach or golf course communities, or classy apartments in London or Paris. Some programs give you an actual property deed that is transferable; others are just a license to use the property that may expire.

Pitfalls

Timeshares can be great if you accept the terms and conditions—a good friend owns at least a half-dozen intervals and loves all of them. But buy warily:

• Don't view a timeshare as an investment. Unlike a single-owner resort property, the value of a timeshare interval almost always decreases. As with a new car, you lose some 40 to 50 percent of the sticker price almost immediately. The only timeshare deals that guarantee a resale value, up to 80 percent, are a few extremely high-end operations that cost hundreds of thousands of dollars.
• Examine exchange claims carefully. One of the most frequent complaints from timeshare owners is that they can't ever find attractive intervals elsewhere.
• You may face bait and switch or upgrade pitches. If you complain you can't find good exchanges, the promoter may tell you that you'll do much better if you upgrade to a more expensive base interval.
• Also check on whether the developer has carte blanche to hike management, maintenance, and other fees. You could be in for endless increases in your yearly payments, with little or no control over them.

Rational buying

Given these realities, the best way for most people to get into a timeshare is to buy a resale from an owner who wants out of a timeshare contract. A resale can cut your initial cost by 50 percent or more. But check the contract and the developer's program carefully: Developers don't like you to buy from another owner, and they increasingly try to limit what second-hand buyers can do. If you're interested in a resale, you can find dozens of online brokers and private-seller listings, or check with a real estate agent in an area where you'd like to buy.