Real Estate News Radio with Rowena Patton

Unraveling Timeshare Truths and Vacation Home Ventures: Expert Advice for Strategic Real Estate Decisions

• Rowena Patton

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Ever felt trapped by a decision, particularly one that was supposed to enhance your lifestyle? We unravel the emotional and financial challenges faced by timeshare owners, revealing the staggering 87% who regret their purchase. By tuning in, you’ll gain a deeper understanding of the alluring promises versus the harsh realities of timeshares, including hidden fees and rising maintenance costs that leave many feeling ensnared.

As we navigate the complex landscape of timeshare contracts and vacation home investments, you'll hear strategies to safeguard your finances, whether you're looking to exit a timeshare or considering the purchase of a second home. We dissect the differences between deeded and right-to-use contracts, and why grasping these distinctions is essential. Plus, we offer practical tips on platforms like Redweek for selling timeshares and explore alternatives that might suit your lifestyle better.

Finally, the episode broadens the conversation to the world of vacation home investments. Discover how owning a second home can be both a joy and a financial boon, particularly through rental opportunities with Airbnb and VRBO. We'll discuss market trends, such as the "halfback" phenomenon and the cyclical nature of real estate, to help you make informed decisions. With expert guidance at your fingertips, the path to making strategic real estate choices becomes clearer. Reach out to us for personalized advice tailored to your unique real estate journey.

Speaker 1:

This is the Plain English Real Estate Show with your host, rowena Patton, a show that focuses on the real estate market in terms you can easily understand. Call Rowena now. The number is 240-9962 or 1-800-570-9962. Now here's the English girl in the mountains, the agent that I would trust, rowena Patton agent that I would trust, rowena Patton.

Speaker 2:

It's Rowena Patton on the Real Estate News Radio Show and today we're going to talk about the real story behind timeshares, what you need to know before buying and how to get out of it if you regret it. You can't always get out of them, but here's some tips and tricks, as so many of you seem to regret it, we'll go through that number, which is pretty incredible. The history of timeshares the concept began back in Europe in the 1960s and I think it really started from a good place. It was looking at how can we make vacation homes more affordable, so that made sense right At the end of the day. You can look at this, especially if you sit through those presentations and think, well, that kind of makes sense. It's a way for me to own a vacation property. So it really took off in the 1970s when the major resort companies in the US entered the industry. And, of course, these days many, many of the timeshares are owned by the big hotel groups and we've all had those phone calls that come through to us that say we've won a prize or something has gone on where we can get a weekend for free and all we have to do is sit through a 30-minute presentation. I've actually sat through one myself and it did end up being a lot more than 30 minutes and I did not end up buying one.

Speaker 2:

So today the US timeshare industry is valued at over $10 billion and over 10 million households that number was kind of surprising to me own a timeshare 10 million. So the average owner is around 47 years old and nearly 70% are married. I think probably if you spoke to somebody that targeted people who might buy a timeshare, I'm guessing they target married people because it seems like a really nice idea. You can go off as a couple and go on two or three vacations a year in your very own timeshare. The statistics are pretty shocking 87% let that sink in. 87% let that sink in. 87% of timeshare owners regret their purchase and that was a recent University of Central Florida study that found that out and 66% of timeshare owners believe their timeshare has little to no resale value. And what I did here was I went on eBay. I kept seeing these posts about timeshares being sold and timeshare points. They tend to use points these days being sold on eBay. So sure enough, I went on eBay and there's lots of them for a dollar.

Speaker 2:

More than 50% of timeshare owners feel trapped in their contracts. They they give reasons for that and they say it's due to the hidden fees and escalating maintenance costs. So many people pay that big chunk down using some kind of loan or home equity line of credit and then they pay maintenance costs every year and these seem to be like taxes. They tend to go up. 75% of timeshare owners, as current timeshare owners, say they would not buy another timeshare. I'm guessing those are within the 87% who regret their purchase in the first place. Who regret their purchase in the first place.

Speaker 2:

That's so sad to think of that many people regretting their purchase. And no wonder all these companies have grown up helping you get out of your timeshare. Over 1 million timeshare owners attempt to exit their contracts every single year and only a small fraction successfully do so. I think you go back and forward, back and forward, back and forward. So I did some research on YouTube, on Instagram, on Facebook, on complaint sites, and I found a whole bunch of comments. Probably 5% of them were saying I don't know what you're talking about. I love my timeshare and we agree it every year. And here's a few others that I found. Now I've protected their voices and names, of course, but all these are absolutely word for word, real comments.

Speaker 3:

I inherited a timeshare from my mother. I really don't want it and need to get out of it. Can you help me with it? I've been trying these exit companies and they say that, as we won't be able to prove bad practices when it was sold to my mom, they can't help.

Speaker 2:

So most of the companies that help you online, they have downloadable packs. You can find them quite easily and I will have a bunch of links for these for you on realestatenewsradiocom. I always put links on there so you can find them the main thing they tend to go after, from what I've seen and again, I'm not a person who's licensed or registered to help you get out of timeshares or anything like that and at the same time, I want to at least share with you some facts and figures on the industry it seems to be the most difficult when you inherit them. It seems to be the most difficult when you inherit them. So, gosh, I would definitely be looking at how to get your timeshares in place. If you have a timeshare now and you have it in your portfolio. In other words, you were probably even sold on the fact I know I was when I sat through one of those presentations that if you have kids, it's a great thing for your kids to inherit.

Speaker 2:

They may not want your timeshare. It's kind of like grandma's furniture. They don't necessarily want that either. However, this is something that then, if they inherit it, they must pay the maintenance fees on it. That may be a liability that you're leaving for them, and apparently these companies can advise you on that. And then, of course, like every other post you've seen on social media, you'll always see the people who say things like this the best way to get rid of one is not to buy one. Yeah, there's always those. And then there are just the heart breaking stories that you hear, and this one brought a lump to my throat when I read this.

Speaker 4:

I have a timeshare with a New York club can no longer pay the fees since my husband passed. They have threatened to put a lien against my house and eventually they will foreclose on it. I told them I would give them the timeshare back no charge. They laughed and said what would they do with it? The stress is horrible. If I died from a heart attack from this. I told my daughter to sue them for harassment. This should be illegal.

Speaker 2:

Unfortunately, I wish I could say I hadn't read many of those. There was even a guy who was having an operation I think he was having an operation for a brain tumor. He had cancer and he felt he wasn't even of sound mind to make the decision when he was sold the timeshare in the first place. And there were so many stories like that. And of course, you always get the people who like to make the statement. Who can blame them?

Speaker 5:

Timeshares are a source of regret for those who purchase them based on misleading promotions and false assumptions. They also reflect poorly on state attorneys, who fail to take action against these deceptive programs.

Speaker 2:

Now I want you all to know that I'm not saying timeshares are bad. There are people out there that really enjoy their timeshares, even on the figures we have. So you know, when we look at the figures, that say what was it? 87%? 87% of timeshare owners regret their purchase. That means that 13% don't. You know. There are people out there that absolutely love their timeshare.

Speaker 2:

We'd definitely love to hear from you today if you love your timeshare 800-570-9962. That's 800-570-9962. This is Rowena Patton on the Real Estate News Radio Show, realestatenewsradiocom. For links to listen. You can listen anywhere in the country. I've been hosting this for 12 years now. I still can't believe that 800-570-9962.

Speaker 2:

Would love to hear your timeshare stories, whether you love one or regret having one, and your experiences. Would definitely love to hear from you if you've used any of these companies that help you get out of a timeshare. One thing I'd highly recommend is google how do I get out of my timeshare or how do I make better use of my timeshare? Show me people who love timeshares. Go on Facebook and search timeshare groups. There's so much information in there. There's so much information on Reddit. Go and do your own research on eBay and see who's selling timeshares, especially if you want to buy one. Apparently that's been suggested too in everything I'm seeing. But make sure you really do some really good background research first. So here's some common reasons for regret, and I'm not sure any of these are really going to surprise you.

Speaker 2:

Unexpected costs, including maintenance fees that increase annually. You know it's one thing. Where you know how much you're paying, you can say, okay, we'll have this paid off over five years and it will save us all of those really expensive vacations. However, you're then building in the maintenance fee that you don't realize might increase on an annual basis, which seems to be a very common occurrence. Difficulty in booking vacations due to a limited availability. Lack of resale value Timeshares often depreciate significantly. Again, go look on eBay and find these, where you can buy them for a dollar. There's a number of them, and if you're thinking about a timeshare, that might not be a bad place to start Contracts that make cancellation or resale extremely difficult. Here's a couple of examples I found A couple who purchased a timeshare for $20,000, but they later found out maintenance fees kept rising annually, making it unaffordable. They were unable to sell it due to lack of demand. A retiree who was pressured into a timeshare presentation and signed under duress, only to realize later that their financial situation could not sustain the ongoing fees. Of course, you could say that about anything where you go to a presentation and you're sold something and later maybe you can't really do it and you're not within that 30-day limit or whatever it is in your state where you can take back the sale.

Speaker 2:

You've heard the pitch before. Come to our presentation and we'll give you a free vacation or an amazing gift. It sounds too good to be true, right? Well, that's because it often is Welcome to the sales pitch versus reality. Today we're pulling back the curtain on those high-pressure sales tactics that promise the world but don't always deliver.

Speaker 2:

You walk into a sleek conference room lured by the promise of a free cruise or a luxury weekend getaway. Many of us have been there. The host is friendly, the coffee is free and before you know it, you're locked into a high pressure pitch. The last hours you hear words like once in a lifetime opportunity and act now, before it's gone. You're exhausted, overwhelmed and suddenly signing on the dotted line seems like the only way out.

Speaker 2:

Let's have a reality check what happens next. That free vacation might come with endless blackout dates, hidden fees or conditions that make it nearly impossible to use and that incredible deal you just signed up for. It may not be the dream investment it seemed in the moment. Sales pressure is real and it's designed to make you act on emotion rather than logic. The best way to protect yourself do your research, take your time and never sign anything on the spot. Next time you hear a pitch that sounds too good to be true about anything really, not just timeshare Remember, if you have to be pressured into buying, it's probably not the deal you think it is. Stay informed, stay smart and always read the fine print.

Speaker 2:

Hey, it's Rowena Patton here on the Real Estate News Radio, if you just tuned in, and today we're talking about timeshares. Let's look at the hidden costs and restrictions. Here you have a dream vacation year after year. That's the promise, right, but what they don't tell you up front are the hidden costs some do, maybe and the restrictions that can turn that dream into what, for some, can be a financial nightmare. So let's talk about the fine print, the rising maintenance fees, the special assessments and availability the thing that sometimes get glossed over in the sales pitch.

Speaker 2:

So meet the Johnson family. They were thrilled to purchase a vacation package that promised anytime access to luxury resorts. But when they tried to book their trip, the only available dates were during hurricane season, months away from the peak weeks they were originally promised or that they thought they were getting. And then came the bills. Their annual maintenance fee started at $1,500, but climbed 5% every year. Within just a few years, they were paying over $2,000 annually, whether they used it or not. Then, out of nowhere, a special assessment landed in their mailbox demanding another $1,200 to cover unexpected property upgrades.

Speaker 2:

And let's not forget, getting out of a timeshare isn't easy. Many owners find that resale values drop fast and some even end up paying just to exit their contract. So what should you ask before signing? How much are the maintenance fees now and how often do they increase? And look to see actual facts and figures on this. Are there special assessments and how much have past owners paid? Is peak season availability really guaranteed or is this just a sales pitch, a vacation deal that locks you into rising costs and limited availability? That's not freedom, it's a financial trap. Read the fine print, ask the tough questions and don't let the dream vacation turn into a nightmare.

Speaker 5:

I thought I was doing something great for my family when I bought this timeshare memories vacations, something to pass down to my kids, but now I realize I've left them with a financial burden instead. The maintenance fees keep rising and there's no easy way out. I don't want my kids to be stuck paying for something they never asked for. I'm looking into putting it in a trust or finding another way to protect them from inheriting this mess. If anyone has advice on how to get out of this without leaving my kids on the hook, I'd really appreciate it.

Speaker 2:

Hey there, this is Rowena Patton on the Real Estate News Radio Show. If you've got any thoughts or questions today, please give us a call. Give us a call 800-570-9962. That's 800-570-9962. Do you have friends or family that have timeshare or could really help us out with some comments or thoughts or questions on the show today? Share the show with them at realestatenewsradiocom. That's realestatenewsradiocom. You'll find a link to listen anywhere.

Speaker 4:

Owning a timeshare has been one of the best decisions for our family. We have a guaranteed vacation spot every year, without the hassle of booking last minute accommodations. The flexibility to exchange locations has allowed us to explore beautiful destinations while making lifelong memories.

Speaker 2:

So clearly, not everybody is unhappy with their timeshare decision. I think it's just all about having the information to make the right decisions, just like anything in real estate or any other decision you're making. For that matter, it's Rowena Patton here on the Real Estate News Radio show. If you've got friends and family that might need to be listening to this one. It's all about timeshares today. If you just tuned in realestatenewsradiocom realestatenewsradiocom that's the best place to listen live. Also, that's where you'll get the links to other information about the show, the other 12 years of shows that we've done and, of course, for an easy way to contact us.

Speaker 2:

So who could a timeshare be great for? A timeshare can be a great option for specific types of travelers and lifestyle needs. Here's some examples of people who might benefit from a timeshare Families who vacation annually. A family that takes a yearly beach trip to Hilton Head or Disney World might find a timeshare beneficial. They get predictable, spacious stays without the hassle of searching for accommodations every year. It just takes that out of it and, especially if you're traveling with your family so nice not to have to have that hassle.

Speaker 2:

Many timeshares offer multi-bedroom units, which works well for families, retirees who love a home base. A retired couple who enjoys spending part of the year in Arizona or Florida but doesn't want the full responsibility of owning a second home that could work really well. They get resort style amenities without the costs of full home ownership. Business travelers who frequent the same location, someone who regularly attends conferences in Las Vegas or Orlando or a ski resort town that could be useful instead of paying those premium hotel rates every time. Adventure seekers who enjoy exchange programs Many timeshare programs allow owners to exchange their week for stays at different locations. Groups of friends who vacation together, a group of lifelong friends who take an annual ski trip or island getaway can split ownership costs and always have a guaranteed high quality place to stay. That one was a new one for me. I really hadn't thought of that.

Speaker 2:

People who want luxury vacations without paying full price Many high-end resorts offer timeshares in prime destinations like Hawaii, aspen or the Caribbean. It provides access to premium resorts and amenities at a fraction of the cost of full ownership. It's known as the Caribbean in England, by the way. Who wouldn't benefit? Those who prefer spontaneous travel or exploring new places each year without constraints. Who prefer spontaneous travel or exploring new places each year without constraints? And don't forget, we'd love to hear about your timeshare stories. Give us a call, 800-570-9962. That's 800-570-9962. Whether you love your timeshare, have exited a timeshare or wondering how to get out of one, we'd love to hear from you. This is Rowena Patton on the Real Estate News Radio Show. If you have family or friends who could benefit from this today, send them to realestatenewsradiocom for a live link to listen anywhere.

Speaker 4:

Hey there, welcome back. Today we're diving into a topic that a lot of people ask about timeshares. You've seen the ads, maybe you've even sat through a presentation for a free vacation. But before you sign on the dotted line, do you really understand what you're agreeing to? Let's go over the rescission period, your get-out clause. This is something some people don't know. If you sign a timeshare contract and immediately regret it, you might have an out, but it's time sensitive. The rescission period is a legally required cooling off time that lets you cancel the contract with no penalty. It varies by state. In Florida, you have 10 days to back out, but in other states it could be as little as three to seven days. And here's the key Timeshare companies won't remind you of this. If you change your mind, you need to submit a written cancellation request before the deadline. So if you're ever at one of those high-pressure presentations and get caught up in the moment, just remember you do have time to rethink it, but don't wait too long. Now let's talk about what you're actually signing up for.

Speaker 4:

Not all timeshares are created equal. Deed-to-timeshares mean you own a share of the property, like a piece of real estate. You can sell it, will it to your heirs or rent it out, but you're also responsible for annual fees whether you use it or not. Sounds like a good investment, maybe not? These are often very hard to sell later on. Then there are right-to-use contracts. Instead of ownership, you're leasing the right to use the property for a set number of years. Once the contract expires, you no longer have an obligation, which can make these easier to exit than deeded timeshares. However, some contracts renew automatically, so read the fine print. So before signing anything, ask yourself do I want to own part of a property forever or just rent vacation time for a limited period? So why are deeded timeshares tricky to sell? Here's where things can get more difficult.

Speaker 4:

Timeshares tricky to sell here's where things can get more difficult. Many people think they can just sell their timeshare like a house. Not so fast. Deeded timeshares are permanent, they don't expire and that means you're on the hook for maintenance fees for life. Many owners try to resell, but the market is flooded with people trying to get out. But the market is flooded with people trying to get out. Some even list their timeshares for $1 and still can't find buyers. If you stop paying, resorts can send you to collections or foreclose. Yes, even on a timeshare. Some resorts offer exit programs, but often these come with additional fees or conditions. Make sure you read the paragraph about the exit plan when you are signing up. So what's the bottom line? A timeshare can be great if you understand the contract, but if you're thinking about one, be very sure you're willing to commit for the long haul.

Speaker 2:

So what are some resources if you have a timeshare? One of the big marketplaces is called Redweek redweekcom, and they deal with renting out your week, booking your next trip, maybe exchanging or renting directly from an owner and also selling your ownership. So if you click on sell my timeshare within the Red Week site, what you'll find is you have all kinds of opportunities on there and the main two are do it yourself basic. So that's about advertising on there and doing it yourself, basically. And they say we advertise and bring buyers to you. You'll personally finalize contracts and details, and that's about $60 with no commissions. And then they offer, as at this broadcast, a full service for $125. And then it's plus $8.99 or 3% of the price only when sold. And they say we create and verify your posting for you while helping with prices and managing negotiations, and of course there are many companies that you can use for this as well and there's all kinds of details at the bottom of there. What's the process for selling my timeshare? How should I price my timeshare? They do have a what's my timeshare worth valuation tool. Obviously, I would sell your timeshare and that's where it goes to the full service resale option. And actually they're saying the full service resale option wouldn't be available until the fees were caught up, although you're welcome to try and sell it on your own, that's if you are behind on your maintenance fees. Um, so there's all kinds of travel tips and guides on there and, of course, you can sell it yourself on eBay, facebook Marketplace. There's all kinds of places where you can do that. I would encourage you to go to redweekcom and have a look at the owner resources. They've got travel guides and tips. It will also tell you where to find a timeshare to rent, how to rent your timeshare. You can look at all inclusive. You can look at beaches, you can look at golf, kid friendly, pet friendly, theme parks, all kinds of things on there. You can also buy timeshare points. Many of them operate on a point system now. So if you need to sell your points or buy some points, they have tips and tricks for that as well. So well worth a look at that one.

Speaker 2:

Welcome back. It's Rowena Patton. Good morning. Good morning. It's another Saturday morning full of promise and you're tuned into the Real Estate News Radio Show with me, rowena Patton. Whether you're listening live on the radio or catching this later on the podcast, I am thrilled you were here Today.

Speaker 2:

We're talking about two things both the timeshare industry and buying a second home. Maybe you've dreamed of that mountain cabin. People think there are a lot of cabins in the Asheville area. There aren't too many. There are some log homes and a few cabins. But really think about how far out you are. Maybe it's a beach house, maybe it's a quiet lake retreat. We're about to list one of those. Actually, in the next week or so, maybe you're thinking about investing in a property that can bring you some rental income.

Speaker 2:

Now here's the thing you knew I was going to say this Is buying a second home really a good idea? What kind of real estate agent am I asking you if it's a good idea to buy a home? An honest truth for one. What do you need to consider before making that move? How do you finance it? What are the hidden costs you may not have thought about? We're covering all of that and more today. So, whether you're sitting on your porch with a cup of coffee, out running errands or driving to check out open houses this weekend, stick around.

Speaker 2:

This is going to be a packed episode full of practical information to help you make a smart decision. So why do people buy a second home? All right, let's start with the big question why do people buy a second home? What's the motivation? It usually falls into one of three categories personal use, investment or a future retirement plan. It's kind of an interesting one.

Speaker 2:

Let's break these down. So a vacation home and some of these obviously are based around your age. Are you setting out with a new family? Are you getting older in years and just want that vacation spot to get away to? So you've got that favorite getaway spot the mountains, the beach, a lake house and instead of paying for vacation rentals every year, you think why not just buy a place? You want to create a place for family gatherings, a home where memories are made and passed down through the generations, and it could be all about convenience and it often is knowing that that home is there waiting for you, with all your favorite things already there.

Speaker 2:

You can also do this. If the home that you purchase is able to go on the Airbnb or VRBO scheme or the midterm rental, you could rent that place out. Maybe you go there, for example, during the wintertime and you can rent your current house out or your second home flipways from when you spend time there If you're at the point in life where maybe you're a mobile worker, maybe you're a remote worker and can travel while you work, and maybe don't have a young family or something like that, or maybe you're getting up in there in years. So it's all about your personal situation, obviously. And if you have plenty of moolah and you just want your place sitting there and your toothpaste ready when you go and not have to take, you know, if it's a warm place, the bikini or if it's a chilly place, the sweaters, those things can take up so much space and you just want to grab a bag and go, that can be a really great thing. Of course, you know there are so many less expensive flights around now. I'll give you one example of one In the mountains in Asheville we have a lot of people travel from South Florida particularly.

Speaker 2:

We have a lot of people travel from all over the place, but particularly South Florida. Since quite a few years ago now, allegiant, which means big giant in Germany, alley giant is now running incredible fares direct between they call it Miami, but it's actually the Fort Lauderdale Airport. So direct flights between Fort Lauderdale Airport and Asheville, which is a regional airport, for very inexpensively check them out, allegiantaircom. So that's brought a lot of people from South Florida. Now, obviously South Florida is warmer in the winter than Asheville is and it works the other way around, because South Florida shocker gets very hot in the summer. So a lot of people like to escape that South Florida heat and escape to the mountains where we're temperate and have quite a nice summer. A lot of people say, oh no, it gets really hot here, but it doesn't get hot like the flatlands of the South because we've got those mountain breezes Also.

Speaker 2:

We even have a term for those of us who first started off in the north, often New York, pennsylvania, boston. A lot of people from Boston who go to South Florida to escape the just chilly, chilly, chilly in the late fall, winter and January, february, until the green starts coming on the trees, go down to South Florida and sometimes they move in entirety. They just move down there and say no, can't deal with the cold anymore, and an awful lot of people miss the seasons and guess where. They end up, back in Asheville, north Carolina, because it's not so hot in the summer and it's a nice escape and you get those four seasons. It's such a popular thing to do in the mountains that we're called halfbacks. I'm actually a halfback myself, and that means you start off in the north, you moved to South Florida and then you made it halfway back, but of course, with vacation homes, you can have both if you can afford to do that. So let's talk about it as an investment property.

Speaker 2:

Maybe you see a second home as an income opportunity. It could be Airbnb, vrbo or long-term rental, and now what's really gaining in popularity is the midterm rental. So it could be that a lot of people are moving, because they're moving from California, for example, which we see a lot in the mountains, and they're not sure quite where they want to live, so they just want to rent a place for three to six months. That could be a good opportunity for you to rent out your vacation property while still having the ability to use it yourself, and obviously that would be in the four to six month term. Sometimes you'll see three month ones too. You can imagine if you're looking around for a house, three months is probably what you want. If you're building a home, it's going to be six months to 12 months, which is more of a long term rental. So real estate is a solid asset and some people buy second homes as a way to build wealth.

Speaker 2:

That really is when are you in life? You know seven to 11 year cycle. You've heard me say it many times 7 to 11 year cycle. We are in a flattening top cycle right now, which means that statistically now there's no guarantees of this. There's no guarantees about anything in life apart from taxes and death, as we know, and we're in a 7 to 11 year cycle. We're at the top, we're bumping along the top. In many markets around the country we're already seeing some price decreases. So for the next three and a half to five and a half years, we expect it to decline, flatten decline, and then for three and a half to five and a half years, statistically it goes back up. The good news is that real estate over the long term, you'll see these seven to 11 year top peaks that are worth more than now, in other words, statistically, based on history, since 1860, when Clément Jugler outlined the economic cycle. So here we are in 2025, 7 to 11 years from now. Let's just do 10 years from now, 30, 35, the property you purchase is going to be worth significantly more, based on history. I can't guarantee that for you. I wish I could, but based on history, it's going to be worth significantly more.

Speaker 2:

Think about the home you're in now and think about what it was worth 10 years ago. So 2015,. We're sort of bumping along the bottom of the last one. At that point we had a particularly long cycle. Last time around, of course, it tipped in 2007, 2008 in most markets in the country, and here we are back at the top. It's been an exceptionally long cycle, so nobody can time the market. Otherwise we be all be multi-millionaires. But think about that when you're looking at it as an investment property. So what that means is, the younger you are, the longer you can afford to hold it. It makes more sense if you're just looking at it as an investment property.

Speaker 2:

How about a future retirement home? If you're in retirement already, it still could be a future retirement home. So many people buy that second home before retirement, using it part-time now and planning to live there full-time later, or at least half the time. There are more and more people that have a lifestyle. You know they're called snowbirds if they're coming from the north and going to the south. At least it's been a popular thing since the 60s and 70s really when the budget airfare came in or you could take those long road trips depending where you were coming from, and go away for a period of time, often to escape the winters. If you're in South Florida, it's often to escape the summers. Really all the way up to the middle of Florida Gets really hot in the summer. If you've spent any time in Florida I don't need to tell you that, so you know people love to go to the north or go to the mountains. We are south in Asheville, of course, but we get those mountain breezes, just keeping it a little bit more pleasant.

Speaker 2:

So before you even start looking, ask yourself why do I want this second home? Because your answer will guide absolutely everything, from how you finance it to your wah, wah, wah tax strategy. Let's do the fun stuff and talk about affording a second home. Let's talk money. Let's talk dollars and cents, because the biggest mistake people make when buying a second home is underestimating the cost. It's not just about affording the mortgage. There's a lot of hidden costs that can sneak up on you. So mortgage and financing second home mortgages often require a larger down payment, typically 10 to 20%. So speak with your mortgage broker, credit union, about that Interest rates for second homes are higher almost always than your primary residence.

Speaker 2:

If it's classified as an investment property, you may need at least 20 to 25% down. Then there's property taxes and insurance. Some areas charge higher property taxes on second homes than primary residences. So check that out wherever you're thinking of looking. I'm always a believer that if you've gone and checked out areas, you end up in an area that you really love, regardless of whether it costs you a bit more to live in that area or not. However, of course, that depends on your budget. I know for me, being in a place that I really loved, I would cut back on the buying a coffee out every day. You know it's all about what are you putting value on, and there's no judgment there. It just depends on how much you love a place. If two places are equal and one happens to be better in terms of the property taxes or something else, then it's an obvious decision.

Speaker 2:

Then you've got things like if the home is in a hurricane zone, a wildfire zone. Of course we're seeing everything going on in California Right now. It's heartbreaking. We had Helene strike in Asheville just a few months ago and we're still seeing the outcome of that, although we're going great bounds to cleaning all of that up or a flood zone, so insurance costs could be much higher than expected. So make sure that you get a quote on that insurance cost. If you're planning to rent it out, you might need landlord insurance, and what you'll find is some of the bigger insurance carriers even people like USAA have pulled out of places like Florida. So make sure you call your insurance broker and get a quote and talk to them about that and see whether or not it's even possible. Then you've got the maintenance and utilities. So even when you're not there, you've got utility bills could be HOA fees, could be property maintenance, and then think about who's going to take care of the yard, the roof or check on the home during the bad weather. Maybe you've got a property management company, so that obviously adds additional costs. That's usually going to be 10 to 20%, depending on how much they do for you. Maybe you've got friends or family in the area so they can help. So here's my advice Before buying, make a detailed budget and don't just factor in the mortgage.

Speaker 2:

Think about every possible cost, because the last thing you want to feel is stretched too thin. So a second home versus an investment property. What's the difference? Now let's clear up a common point of confusion. What's the difference between a second home and an investment property? Because, trust me, the IRS and mortgage lenders definitely care. So second home rules it must be for personal use at least part of the year. You can rent it out, but typically for less than 180 days per year. So when we talked about the budget before, make sure that 180 days, or look at how much that 180 days of renting out covers and obviously you've got more costs coming out if you are renting out as well but look at what that 180 days of income brings in.

Speaker 2:

It could be that with two properties if you rent both of them out I know how scary that sounds, but it could have you paring down in your home and all your stuff and things. You could be one of those 40 or 50 year olds, or particularly 50 and 60 year olds, that's, in the four or five bedroom home where you raised your kids and you're paying so much on utilities because you're keeping that home for the kids to come home to. It could be that you could right size. Just think about that Right sizing. We used to call it downsizing, I like to call it right sizing, because there's nothing wrong in getting a home the right size for you.

Speaker 2:

It could be that you could be right-sizing in your current home and if you're thinking about that, we can find you agents all over the country 828-333-4483. 828-333-4483. We've got agents standing by 24-7. If you're listening to this on the podcast after the live broadcast, we've still got people standing by to take your call. So we can help guide you through that, find you the right agent for right-sizing your current home and using the equity from that to buy a home. That's your second home. It's somewhere else and we can help you with all the budget and looking at what that looks like too. We're about to have an app module on that. We have an app called Listing Royalty. We're about to have an app module on the difference between a second home and whether it looks like an investment or a personal home, and what that looks like like an investment or a personal home and what that looks like. So, wherever you are in the country, and in Canada too, we can find you a great agent for that. Rowena Patton here, real Estate News Radio, brokered by EXP Realty 828-333-4483.

Speaker 2:

Let's talk about it as investment property rules. If you rent it out for more than 180 days, it's an investment property in the eyes of the IRS. It doesn't matter if it is really a personal property If you rent it out for more than 180 days half the year, in other words it's an investment property in the eyes of the IRS. It requires a larger down payment and higher mortgage interest rates. You'll owe rental income tax, but and here's the but you can deduct expenses like maintenance and property management. Hmm, so you have to think about that. So if your plan is to rent it out full time, be honest with your lender, because calling it a second home when it's actually a rental could get you into trouble.

Speaker 2:

Let's look at the tax benefits and the pitfalls. You can deduct mortgage interest on a second home just like your first home. If you rent it out for less than 14 days a year, you don't have to report that as rental income. Than 14 days a year, you don't have to report that as rental income. So here's the deal If you rent it out for more than 14 days, you must report the income and pay taxes on it. Selling a second home means capital gains tax unless you've lived in it for two out of the last five years. Now I'm not a financial advisor, so always check all of this out with your financial advisor, because things may have changed by the time you're listening to this. So the bottom line second homes can have great tax benefits, but only if you understand the rules, all right. So that's a wrap on looking at second homes. I hope that helps and would love to talk to you about your long-term goals, financial situation, tax implications, getting you with the right people to really understand those financials on there.

Speaker 2:

This is Rowena Patton on the Real Estate News Radio Show. You can give us a call anytime at 828-333-4483. We have people standing by 24-7. And yes, we really do get calls at 1 am. No, I won't be awake for it, but I will be returning your call. Well, thank you for listening. Today We've covered a lot, whether it's the ins and outs of timeshares, the dream or a reality check of buying a second home or simply preparing to sell your current home.

Speaker 2:

There's always something to know and learning opportunities in the real estate world. But let's talk about your next move. Wherever you are in the country or Canada, give me a call at 828-333-4483 and I'll connect you with a rockstar agent who can help you really navigate that process. It does make a difference. You need experience in this market, guys. I know you're probably tired of hearing me say this at this point, but you really do need experience. This is I'm sorry.

Speaker 2:

If you're a daughter who got her real estate license last week, you probably want to have somebody mentor you through that sale. If it's your parents selling the house right now, this is not a market to practice in. So you know, just get connected with the right agent. If you've got somebody in your family that's a real estate agent, that's great and they've got lots of experience fantastic. If they haven't, then just make sure that they're partnering with an agent that's got some you know real experience out there. So there are options.

Speaker 2:

If you're thinking about selling, you've got options. Maybe you're thinking I don't want to deal with real estate agents. Who wants to deal with real estate agents, showings, lock boxes or even a for sale sign in my yard? Well, you don't have to. With our full market value cash offer, you can skip the stress. With our full market value cash offer, you can skip the stress, avoid the uncertainty of the market and get the majority of your equity in as fast as 14 days. That's right. No waiting around, no contingencies, just a straightforward sale. Now, if you want to wait it out for 90 days maybe you're concerned that you want to make sure that you can find your new home or something like that you can stay in place.

Speaker 2:

Here's the best part You're not just walking away with that first check. We then sell your spruced up home, we go in and we basically flip it for you. Our funding partner upfronts the money to do that for you. Then you'll get a second profit share check. This all came from certified pre-owned homes that I started running back in 2007. When I got into real estate, I couldn't understand why all these properties were falling out. So it's very common for over 30% of properties to fall out. Yes, you heard me right 30%. So by going CPO whether you do it yourself or do it through the cash CPO you can do this yourself too.

Speaker 2:

Get the inspection up front it's so important, guys and if you can afford it, get the appraisal as well. Give me a call, I'll talk you through all of this. I've got actually, a free chapter of my book right now is going live on the app next week. I can share that with you as well. You can read through it and do it yourself if you want to. That's just fine. I'm all about equipping you with the right information so you can make the best choice for you. It's a really good thing to be able to do that, so that's how we maximize the value of your property and buyers are more likely to want to buy your home because it's been inspected, because it's been appraised and it's all been cleaned up. We're just working on one right now that's under contract that we're very happy about.

Speaker 2:

So maybe you're thinking of buying that second home. Let's talk strategy. If today's show got you thinking about buying a second home, let's set you up with a property drip. That's when you get properties that meet the kind of budget that you're looking at in the area where you're looking. Give us a call 828-333-4483, wherever you're at in the country and I will help you get set up. With that. I can connect you with an expert in your area that knows the ins and outs of second home financing, tax benefits, rental regulations. Not all second homes are treated the same as we've gone through today, whether it's a true vacation home or an income generating property. You want to make sure you're making the right move for your financial future. It's really crucial to have that right strategy, financing and market knowledge in place before making that that.

Speaker 2:

Maybe you're stuck in a timeshare. You saw this show advertised and you came on looking at a timeshare. Let's find a way out. If you are, if you're happy in yours, that's fantastic. If you already own one and need an exit strategy, I can connect you with the right people for that and do some research. All you need to do, guys, is Google stuck in a timeshare? How do I exit my timeshare? You'll find so much on there. Just be careful of the scams. There are some scams out there. A lot of people will tell you about that. So you know, make sure you go back over this.

Speaker 2:

You can go to realestatenewsradiocom realestatenewsradiocom and find this on the podcast and make the notes or get the transcript on there. You can find this show on there. All you've got to do is look for Timeshare. I think it's the first show we've ever done in 12 years talking about Timeshare, so it will be really easy to find. So the bottom line guys, give us a call. Real estate decisions are big decisions. You don't have to go it alone. Whether you're in the country or in Canada, we've got agents standing by ready to help. I'll put you with the right people, I promise. My reputation is very important to me. I've been in real estate now for 18 years. I've been doing this show for 12 years of those oh my gosh, back when I was 12, right. So whether you're buying, selling, investing or just exploring your options, give me a call 828-333-4483. I'll connect you with the right person for your unique situation.

Speaker 1:

This has been the Plain English Real Estate Show with Rowena Patton. Visit Rowena and post your questions at radioashvillecom or call her at 828-210-1648.

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Rowena Patton, NC, FL, DC, CA

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