(2 of 2)
The time-share industry has exploded since its inception in the mid-1970s, growing from 45 resorts encompassing about 1,200 units in 1975 to 1,660 resorts holding 194,000 units in 2008. And just when the industry doesn't need it, a new wave of inventory is expected in the next few quarters as distressed condo and hotel owners start converting their properties into time-share units.
Although time-shares may be temptingly inexpensive, experts warn they should be vacation plays, not investment plays. "Don't buy it to flip it," cautions Howard Nusbaum, president of the American Resort Development Association. Buyers need to be cautious and carefully read all the fine print in the contracts, especially when purchasing a resale unit. State laws regulate sales of new time-shares but not resales.
That doesn't mean the value won't grow. Berman notes that a time-share unit he purchased in Colorado in 1997 for less than $40,000 is now worth more than $125,000 in the resale market. He emphasizes that an appreciation of three times the purchase price is the exception, not the norm. Still, it must make his ski vacations even more enjoyable.