timeshare

Watch Out for These 10 Red Flags With Vacation Rentals

Paul Michael — Mon, 23 Oct 2017 09:00:11 +0000

Vacation rentals are being made widely available these days, especially with the advent of rental sites like Airbnb. Almost anyone, anywhere, can rent their home to you, and that means you have many more choices. But it also means you have a lot more people looking to take advantage of you. Make sure you do your research before you book.

1. Photos of unmade beds and untidy rooms

If you're looking through the gallery of a prospective vacation rental, coming across unmade beds, sinks full of dishes, and cluttered surface areas is a massive red flag. These photos are the owner's chance to put their best foot forward. It's their opportunity to show you just how good the property will be to stay in. If they cannot be bothered to make beds, load the dishwasher, and clean up the counters, you've got one lazy owner on your hands. And where there are lazy owners, there are all kinds of other problems. (See also: What to Do About a Terrible Airbnb Stay)

2. Suspiciously-absent photos of some rooms (or no photos at all)

Todd Barry, a fantastic comedian, does a bit about this and living in New York.

"I had a realtor send me a link of a place to look at… there were four pictures of the apartment. Three of the exterior of the building, and a picture of the stove. I don't think those guys with the camera were looking at an awesome living room going, 'no, let's not play all our cards… oohh, nice paper towel rack.'"

Basically, if there aren't pictures of every room, they don't want you to see them for some reason. If there are no photos at all, you're just asking for trouble.

3. The price is way too good to be true

If it looks too good to be true, it usually is. If you're looking around and see average prices of $1,000 per week in one area, and then out of nowhere a $600 listing shows up, you should ask yourself why. Is it possible that this is an old couple that doesn't really care about profit and just wants to see people happy? Doubtful. More likely, the price is part of a bait-n-switch scam, or some other kind of offer that comes with all kinds of baggage. "Well, yeah, it's $600, unless you were planning on using the bathrooms and the kitchen. Oh, you were? That'll be $1,100 then." By all means investigate the lower prices, but too low is a warning sign of a nightmare coming your way. (See also: 5 Cities Where Airbnb Is Way Cheaper Than a Hotel)

4. The listing is filled with inaccuracies

This can come in many forms. First, look for the obvious grammatical errors. One or two in places that make sense are fine (such as autocorrect assuming a different word), but when the text is just filled with awful grammar, sentences that are illogical, and sayings that just sound a bit off, this could be the sign of a scam. Also, look for other inaccuracies, such as stating the home has three bedrooms in the title, but lists only two in the main body of the ad.

5. The description of the rental is very "creative"

The camera absolutely lies to you, and with a good fisheye lens or sharp angle, a vacation rental the size of a shoe box can be made to look roomy. On top of that, the owner may get a little tricky with the descriptions, and you should be sure you know what you're getting yourself into. "Minimalist" is often used to describe a place with a lot of bare walls. "Cozy" or "snug" could be a red flag that the place is very small. "Quaint" or "old-world charm" is sometimes a way to describe a house in need of repairs, or very out of date. "Vibrant neighborhood" is code for loud, busy, and chaotic; so expect 1 a.m. revelry outside. If you see a lot of these descriptions, and a lack of clear photographs, steer clear.

6. You are asked to wire the payment

Who wires money anywhere these days, with PayPal, Venmo, and credit cards so readily available? There is usually a good reason the owner has requested a wire transfer, but it's not good for you. Wire transfers cannot be reversed once the recipient has collected the cash, and they are also very difficult to trace. In this case, you may be getting conned by someone trying to rent out a property that either isn't theirs, or doesn't exist. In both cases, you could turn up to a property with all your bags, and have nowhere to stay. Always use a guaranteed, safe, traceable method of payment.

7. There are only a few reviews

We are all different, we all like different things, and we all have different tastes. Go to any kind of review site, like Yelp or TripAdvisor, and you'll see a range of comments and reviews from customers. Usually, you want to see many reviews with an average up in the fours. If your budget dictates something less, threes are OK, if there are plenty of reviews stating why. But if you see only two or three reviews that are short and perfect, with five out of five, take heed. This could be a place that has not been genuinely reviewed yet, and these are left by anonymous reviewers who are probably related to (or are) the owner. Some places will be brand-new on the market, so it's unfair to expect a mass of reviews for those. But if they're honest about it, you're in much better shape. (See also: 10 Vacation Rental Alternatives to Airbnb)

8. The owner is not easy to get hold of

Most people who are managing vacation rentals are very responsive. This is, after all, a customer service business. So if you are having trouble calling or emailing the owner, you should find out why. For example, if you're sending out emails in the afternoon, but get replies in the middle of the night, that's a sign the owner is in a different time zone. This could be good if you're renting a place in France and you're in Ohio. But if you're renting a place in Florida, the manager should be able to respond during business hours. Check the email address, too. Is it something normal, like a name or business? Or is it some bizarre collection of letters and numbers? If so, it could be an auto-generated email address belonging to a scammer. And if you call and call and never get an answer, something is very wrong.

9. There's no specific address for the property

Scam artists are everywhere, and vacation rentals are no exception. If you cannot look up the address of the property and do your research, you've got a problem. The owner of a vacation rental may say in the ad that they don't want to publish it due to safety and security reasons, and that's up to them. But if you contact the owner and are still not given an address, something fishy is going on. Google maps makes it easy to scope out almost any place, and if it's not covered by that, there should be other references to it. If you're dealing with a scam of some kind, the scammer will know you'll want to do your research and will therefore not disclose it until you have sent money. After that point, you may never hear from them again, or you'll be given the address to a property that doesn't exist, or was pulled from another listing.

10. The contract has some worrying clauses

If you actually get to the stage of signing some kind of contract, read it carefully. Sometimes you'll come across some language that could leave you out of pocket, or even out of a place to stay. You will no doubt have to put down some kind of refundable security deposit, which protects the owner of the property should you go all metal band and trash the place. But if is says "non-refundable security deposit" or "cleaning services will be deducted from your security deposit," that's a good enough reason to back out and renegotiate. You may even come across language that states the home must be vacated should the owner wish to return at any time. So, don't sign anything that you have not read thoroughly, or do not agree with.

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How a Single Mother In Debt Over $200K Is Fixing Her Finances

Janet Alvarez — Mon, 16 Oct 2017 16:02:05 +0000

For those of us actively trying to improve our financial situation, it's inspiring to read about others who have succeeded. Dilenia Frias is one such example, embarking upon Wise Bread's Total Financial Transformation Plan, and successfully improving her credit score, better managing her debt, and on the road to higher earnings in just a few, short months.

When we first met Dilenia in August, she shared her financial concerns with us: Over $200,000 in student loan debt, tens of thousands owed on credit cards, personal loans, and a timeshare, a damaged credit score, and relatively low earnings despite graduating law school. To top it off, Dilenia was recently unemployed for two years, and is a single mother residing in New York City, an area with arguably the highest of cost of living in the country. (See also: The Fastest Way to Eliminate Credit Card Debt)

We decided to help Dilenia tackle these challenges one-by-one, by providing methodical advice for stabilizing her debt, raising her credit score, and improving her earnings. Read on to hear Dilenia's story in her own words — and even better, her remarkable progress in the two months since we first talked.

Credit Cards

I have $8,500 in credit card debt, spread over three cards — American Express, Children's Place, and Discover cards. My cards' interest rates are anywhere from 10.99-24%, and most are maxed out or over their credit limit.

Our advice:

Contact your creditors, explain your situation, and request lower interest rates, if possible. Always pay on time — even if it's only your minimum payments.
Try to bring your balances under the credit card's limit — this will have an immediate impact on your credit score. Long-term, your goal should be to keep your balances under 30% of your total available credit. This will significantly boost your credit.
One useful trick for repaying cards is to make two payments per month, instead of just one. For example, if you normally make one monthly payment of $100, try making two payments of $50 each. Since interest is calculated over the entire month, this will reduce your interest owed. Plus, depending on what time of the month your card reports to the credit bureaus, it may also show a lower debt level and boost your score.
Don't close your credit cards — even once you pay them off! This reduces the amount of credit you have available, which lowers your credit score.

Dilenia's credit card situation now

My Equifax credit score went up 48 points to 677!

I hadn't used my Children's Place credit card in about a year, and the suggestion was to use the card for at least a small amount, so that my account wouldn't get closed for lack of use, so I spent $125 on gift cards in August. I received my bill later in August and paid it on time. I received an email approximately a week ago that my credit limit was increased from $500 to $750.

I also paid my American Express enough so that my statement only showed a $99 balance when the statement printed (so I was using a little under 20% of my credit limit). My Discover card was also a bit over the limit last month, but I brought the balance back down in time for the September statement closing date. I am still using almost 100% of my credit limit, but at least I am no longer above my credit limit.

Personal loan and timeshare

My $7,000 personal loan was unfortunately charged off in 2015, when, after leaving my job in February 2015, was only able to make payments until May 2015. I am currently paying $150 per month to the collection agency handling the account. Based on the amount owed, I would need to make payments until April 2021.

A $9,000 loan for a timeshare is also in collections. I am currently trying to negotiate a limited-use timeshare based on the payments I have already made, but was told that I needed to make a final payment to the collection agency before they would release my account to the timeshare company. If I am able to regain the timeshare, I might be able to sublease it.

Our advice:

Aggressively try to regain use of the timeshare on a more limited-use basis. Request that the collections agency annotate your credit report to show that your are making payments on time.
Once you regain limited use of the timeshare, sublease it using services such as rentmytimesharenow.com. Apply any extra money toward repaying credit cards more quickly, starting with the highest-interest card first.
Attempt to negotiate lower payments or interest rates directly with the personal loan collections agency. Ensure they've annotated your credit report to reflect that your account is being paid on time per your agreement.

Dilenia's personal loan and timeshare situation now

I recently made a payment to the timeshare company, and I am awaiting documents transferring ownership in my previous timeshare to a new timeshare. When the paperwork is finalized, the collection account currently being reported to my credit reports will be removed. That should also increase my score, and also allow me to sublease the unit.

Student loans

I have over $200,000 in federal student loans, most of which are being repaid via the Income Based Repayment program (IBR). However, I have over $16,000 in Perkins loans which are currently on deferment; I'll need to start making payments on these, too, by March 2018. Due to my limited income and two dependents, my current monthly payment is $0.

Our advice:

Consolidate all your student loans — including the Perkins loans, so that they can all be placed on IBR and result in a low payment.
Place your IBR account on autopay — even if your payment is $0, it may result in a slightly lower interest rate.
Contact your law school's employment services office and inquire whether your school offers any debt forgiveness for students in public service or other modestly-paid legal jobs.

Income, employment, and other credit boosts

In order to be admitted to the Bar, lawyers must pass a Character & Fitness (C&F) evaluation, including a credit check. Unfortunately, given Dilenia's credit issues, being denied entry to the Bar (and a higher income as an attorney) was a real possibility.

Thankfully, by bringing all of Dilenia's accounts current and boosting her credit score, C&F should be less of an issue, thus ensuring that Dilenia should be employable as an attorney by late this year. This will likely result in higher income and allow Dilenia to repay debt more aggressively. More importantly, it'll enable her to save — even a modest amount saved every month toward an emergency fund of three-to-six months' expenses will help ensure she doesn't get into this sort of trouble again. (See also: 7 Easy Ways to Build an Emergency Fund From $0)

Dilenia's 19-year-old son is also considering seeking employment to help contribute to household expenses, and once Dilenia's timeshare is subleased, the extra income can be applied to debt and emergency fund savings.

Dilenia has made great progress, and she can do more still. Dilenia should request higher credit limits on her cards once she's made twelve on-time monthly payments and dropped her balances. Then, once her cards are paid off, she should open new lines of credit — such as gas cards — and not use them. This will all result in lower credit utilization ratios — and higher credit scores.

Recently Dilenia joined eMoneyPool, since it reports user accounts to credit bureaus like Experian. eMoneyPool is an online version of a savings club in which members make regular contributions and receive "payouts" of their savings on targeted dates. She joined two $500 money-sharing pools in August, and by early September the account was added to her Experian credit report.

Dilenia can also have her rental payments reported to the credit bureaus using services such as RentTrack or RentReporters. Depending on the lender and the type of credit score they use to determine credit worthiness, this could help her with loans or other credit applications down the line.

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This article is from Janet Alvarez of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Save Thousands by Buying a Timeshare on the Secondary Market

Michael Kling — Fri, 23 Nov 2012 10:48:33 +0000

Would you rather a buy the same timeshare for $20,000 or $2,000 — or maybe even $200?

Some people are getting timeshares for cheap by buying them on the secondary market — from owners instead of directly from the developers. Savings of 50, 75, or even 99% are not uncommon say those involved in the resale market. Yet most timeshare owners or potential buyers don't have any idea they can buy a timeshare, also called "vacation ownership," used from an individual owner or through a resale broker.

"It really is quite an enigma that this information for whatever reason is lost on potential timeshare buyers as learning about the resale market can save you tens of thousands of dollars for the exact same timeshare," states Brian Rogers on his website, the Timeshare Users Group, for timeshare owners, buyers, and renters.

Buying a timeshare on the secondary market can be a great way to pay for great vacations for a great price. When you buy a timeshare, you own the right to use the condominium or hotel suite for a particular week every year, paying just a maintenance fee. Because the timeshares have kitchens, their owners can avoid costly restaurant meals, and they don't pay taxes and fees associated with hotels. While some people prefer the same week in the same spot every year, others buy a floating or "flex" week that lets them pick a week within a specified timeframe for greater flexibility. Timeshare owners who want to vacation in different places can trade their weeks with others timeshare owners within the resort's network. (See also: How to Book an Amazing Cheap Vacation Package)

People might think there's a difference between new and used timeshares. There's not, Rogers says. Unless you're the first person walking into the room, there's no such thing as new timeshare. Its price may change, but the timeshare itself doesn't change over time.

Through the last recession and anemic recovery, people who had bought timeshares during boom times became desperate to unload them. They lost their jobs, had incomes cut back, or perhaps found that the timeshare just wasn't worth the annual maintenance fees.

It's likely that more people would be buying timeshares on the secondary market if they only know they could. Developers have large advertising budgets, but timeshare owners must rely on their own ads or websites.

How to Buy a Timeshare on the Secondary Market

The first step is to decide what you want. A particular resort or a site to use for trading for different locations? A fixed week a floating week for flexibility?

Make sure you understand the rules for trading. A $1,000 week sounds great, but an off season week in Alabama may not be a good deal for you.

Then, to search for timeshares on the secondary market, visit websites such as The Timeshare Users Group or TimeSharing Today. Those sites, as well as TimeShare Insights and the National Timeshare Owners Association offer plenty of resources.

As usual, beware of deals priced especially low. Listings on eBay might start at $1. That should make you ask the seller some questions. Like why are you selling? Is it because of a bad location? Does the unit have a pile of unpaid fees?

Be careful to perform due diligence. Verify that the timeshare's maintenance fees are current and the title is clear. Ask about the resort's amenities, amenities that are free or cost extra, utilities, cleaning, taxes, or other charges.

Many experts recommend working through a broker; others say savvy buyers can handle closings themselves and pay for a title search and title insurance. Buyers, they say, can ask the resort if payments are current and can request the owner for a notarized letter affirming that the title is clear.

If you opt for a broker, work through a licensed real estate broker who is a member of the American Resort and Development Association and who has a good BBB record.

Expert Advice

Some buyers mistakenly become overly focused on a particular resort when they could be missing a deal by buying a timeshare week for trading, advises Larry Hayden, a timeshare broker, in an article for TUG. Instead of concentrating on a certain resort, seek a timeshare for a low price in a popular area in prime season. That will give you the the power to trade that week for any week at any resort in the network.

Hayden offers his top tips for timeshare shopping:

Buy a prime season week so you'll be able to exchange the week for any week in the year.
Buy in a high-demand area like Hawaii, coastal California, or the Orlando, FL area.
Seek a low price. Although that seems obvious, some buyers get sidetracked by other less important features.
Buy in a resort with a reasonable maintenance fee.
If possible, buy in a resort that's part of a large management system allowing you to get low bonus-time rates at resorts in the system.
Buy through a licensed real estate broker with a trust account to hold funds until the sale closes.
Be sure you get title insurance.
If you're supposed to get the current year's week or banked weeks, get that in written in your escrow papers to make sure the seller has the same understanding.
Don't get distracted by minor factors. Price, location and season are by far the most important for trading. The exchange company's rating — Gold Crown or Five Star — is less important. An in-season week in a high-demand area can be easily exchanged (or even traded) into a five-star resort.

Despite potential bargains that abound, you may prefer to rent a timeshare to avoid an ownership commitment. Rental deals are available, as many owners are eager for income to cover their maintenance costs. They're advertising their vacation rentals on many of the same websites posting timeshare sales.

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This article is from Michael Kling of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The Worst Investments You Can Make

Xin Lu — Thu, 01 Sep 2011 10:24:11 +0000

Generally, people love to talk about the best investments they have ever made, but we rarely hear about others talk about the worst investments they made. Good investments are those that maintain your principal and give you a positive return with time. The worst investments are those that burn through your principal and then continually pull money out of you without giving any return. The following are some of what I consider to be the worst investments. (See also: 7 Common Investing Mistakes)

Timeshares

Timeshares are set up by developers and hotel conglomerates to sell shared interest in their properties. They usually give great presentations where you can get a free stay at the property, and then they will try to sell you the right to use the property for a portion of the year. There is nothing wrong with this business model, but those who buy a timeshare directly from a developer should know that it is a terrible investment. First of all, the resale value of a timeshare is almost always lower than its original price. It's possible to find secondhand timeshares for 50% of the developer's price or even less on the resale market. Next, timeshares have maintenance fees that could be thousands of dollars every year. So if your intention for buying a timeshare is vacationing, it might be cheaper to just pay for the vacation yourself. If you don't use your timeshare for vacationing every year, then the money will be wasted. It is possible to rent out your deeded timeshares, but usually it is difficult to find a renter just for your time slot, and it's tough to recover all the fees you have to pay.

Penny Stocks

Penny stocks are stocks that are priced under $1 per share. They are usually at that price for a reason. The prices of these stocks are generally easier to manipulate because trade volumes are low. This is why there are many sites and marketers that promote penny stocks. If they get enough of a following, they can change the price of a stock on the open market and make it seem like it is easy money. The truth is that the promoters of the penny stock websites and mailing lists are the ones making the real money. There are legitimate penny stocks out there that appreciate suddenly, but to actually find them consistently can be difficult.

Badly Chosen Higher "Education"

It is often said that higher education is an investment in your future. However, there are many institutions of "education" out there that are nothing more than degree mills. Many of these schools accept nearly everyone who applies and leave the students with a pile of debt and low chances of employment in this competitive world. Recently there were several cases of students suing their alma maters after they graduated and were unable to find employment. I think more people should treat higher education as a financial decision and calculate the potential return before financing it with a huge student loan. It is fairly easy to look up the reputation of a school and the expected pay for your intended profession. If you do not choose carefully, then education funded by student loans might be the worst investment you could make, because student loans are not dischargeable.

Investments You Don't Understand

Many investments can be the worst investment you ever make if you don't do your research. For example, some investment products have fees and surrender charges that you need to clarify before you buy in. There are also investments such as rental properties or a small businesses that require you to put work into them to keep their existing yields. The bottom line is that you should get as much information as possible before putting any money down.

What are the worst investments you have ever made? Have you put money into any of the above and regretted it?

This article is from Xin Lu of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Why You Should Donate a Blood Sucking Timeshare

Xin Lu — Wed, 16 Apr 2008 00:46:09 +0000

My parents are people who go to timeshare presentations for the free stuff and never fall for the pitch. They have always told me that buying a timeshare at these sales events is a bad idea because of the inflated upfront cost and perpetual maintenance and exchange fees the timeshare companies pile on. It is also quite difficult to sell a timeshare you no longer want because there is usually a giant supply of timeshares on the market. If you do want to get rid of a money sucking timeshare, donating it may be the most economical option.

When you donate your timeshare, you can write off the value of the timeshare on your taxes and get a tax deduction. This detailed FAQ at Donate for a Cause describes the process. It is up to you to decide the fair value of your property and you will be free from that unwanted timeshare without too many worries. You do need to be able to itemize to take advantage of donations and you should check the IRS's rules about non-cash donations. Currently any non-cash donation worth over $5000 need to be verified with a written appraisal.

It is not always true that the tax deduction you receive will be greater than the price you can get for a timeshare on the open market. This really depends on your tax rate and the value of your timeshare, but you definitely save quite a bit of time and energy by just giving the property away. The cost of marketing your timeshare can be quite high because there is so much competition on the market. If you hire a company that helps you list your timeshare, you are usually required to pay a upfront fee that could be quite high. Generally the companies that work for a flat fee do not care how much your timeshare sells for and there are many listings on eBay that are put out by these companies that unload timeshares for as low as a dollar.

Finally, another bonus to donating your unwanted timeshare is that you will be helping someone in need. It is truly a win win situation for everyone involved. The charity gets cash to help people, the buyer of your timeshare gets a discount, and you will no longer have to deal with maintenance fees. If you are not sure where to start, Donate for a Cause is a charity specializing in timeshares and they contribute to a variety of charities. It is also possible that your favorite charities accept timeshares as donations and you can find out by calling or checking out their websites.

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This article is from Xin Lu of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: