Due diligence a must when considering purchasing a timeshare

InvestigateTV - Timeshares are billed as vacation homes that can double as a source of passive income. But officials advise you make sure you know exactly what you’re getting into so you aren’t surprised later by unexpected charges or challenges.

Here’s how it works: you share the cost of the property with other buyers, giving you a guaranteed amount of time at the property each year. You also receive payments as an investor when the property is rented out.

Danetha Doe with the website Money & Mimosas said timeshares can be a great option if you want to own property by the beach or lake, but don’t have the money to purchase it outright.

Doe said, as with any investment, you must do your due diligence. Here is what she recommends if you are considering purchasing a timeshare:

• Make sure you’ve visited the property personally
• Talk to the other owners of the property and ask about realistic returns
• Review the legal paperwork before you sign a deal and send over any money for closing costs
• Avoid wiring funds

Lastly, be wary because some companies inflate the potential returns on these timeshares.

The Federal Trade Commission has a guide for researching timeshares and advice to avoid scams.

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