PROPERTY ABROAD

This is not a subject where we claim any particular expertise. Obviously, if you are considering any financial investment, you should seek advice from those properly qualified. However, recent economic problems and the weakness of sterling may offer some very specific opportunities.

We would never recommend buying a timeshare, except in very specific circumstances. The problem is that you pay quite a large sum for the timeshare itself and then you are contracted to pay hefty annual ‘maintenance charges’, which can increase over a period. In some cases, these charges get too close to the actual rental cost of the property if you were to book it on the open market. The operators will not only take the timeshare away if you do not keep up the charges but, in some cases, will pursue you in the courts for payment. The resale value of these timeshare weeks can be negligible.

When you buy a timeshare, in most cases, you are just buying trading points in a worldwide rental exchange that will allow you to take rentals anywhere you wish. If you want to do this, it could be that the best way is to buy a distressed second-hand timeshare at a low price simply for the points’ value. You need to make sure that the resort is part of a proper worldwide exchange facility and see what you could do with the points. Obviously, you then need to factor in the cost of annual maintenance. The timeshares that do retain their value rather better are those operated by companies such as Marriott or Hilton because, instead of timeshare points, you are buying points in their reward schemes, which can be used for hotels as well as air tickets. If you do the sums carefully, you may well get a good deal – especially if you are paying in (fairly weak) sterling for an asset that is in euros or dollars.

The Holiday Property Bond is a rather more sophisticated form of timeshare. The organisation has been established for a long time and the ‘bonds’ do retain some value; they have even been known to increase. The possible advantage of buying now is that you are purchasing the right to use rental weeks in hard-currency areas with weak sterling.

We do not suggest you make a purchase of either of these products without doing the homework on exactly what you are getting and what the final cost is. You should also take professional advice where appropriate.

Finally, while we make no claims to knowing where money can be made or lost on overseas property investments, we do wonder about some of the ads that appear in the overseas property supplements and magazines. In one publication, we found nine large ads for new developments that did not even mention the country concerned. It could be a hint worth bearing in mind: if the developer is so embarrassed that he does not want to tell you where this incredibly desirable property is, then there could be a very good reason…

One of the many organisations that resell timeshares can be found at www.timesharehypermarket.co.uk. We suggest you look at a variety of sites but this is a useful one to visit first since it has a large selection.

For information on the Holiday Property Bond, visit www.enjoyhpb.com.

Back to Top