A colleague flew back from the Caribbean recently bubbling with good news. Captivated by the island she was visiting, she had made a spur-of-the-moment decision to buy a time share on a condominium apartment. Every Thanksgiving from now on, she can return to her sun-soaked island for a week's getaway -- or make an exchange for a comparable property anywhere in the world -- and know she has an attractive, fully furnished place waiting.

Sound familiar?

Time-share ownership has become a significant factor in the nation's vacationing habits. More than 1.3 million American families have purchased time shares at more than 1,000 resorts countrywide, according to industry reports. Many other Americans own time shares abroad.

This summer, as in the past, travelers flocking to many popular resort areas will be tempted to purchase a portion of their favorite playground. Are time shares a good buy? The answer depends on what you are looking for.

If you are seeking a solid investment -- one that appreciates quickly -- the answer is probably no, at least for the near future. The resale value -- depending in part on the property's location and the time of the year you own -- could be no more than half of what you paid, according to Clinton Burr, president of the Resort Property Owners Association of Chicago, a consumer-oriented organization representing about 16,000 time-share owners.

If, however, you look forward to repeating a pleasant vacation year after year -- one in which your lodging costs remain stable -- a time-share purchase may prove worthwhile.

In the last two decades, some hard-sell tactics have given the time-share sales industry a bad name. In response, the industry's trade association, the American Resort and Residential Development Association of Washington, has adopted a code of ethics aimed at improving the industry's business practices. And some states have enacted time-share regulations to curb misrepresentations. The baddies are on the run, says the association.

Nevertheless, prospective purchasers should investigate a time-share offer as thoroughly as they would any major expense, particularly if the sales pitch is made while they are in a relaxed and receptive vacation mood. If possible, you may want to spend a few nights in one of the property's apartments or villas before you commit yourself.

You also should think seriously about your lifestyle: Do you really want to spend a week out of every year's vacation at Disney World in Orlando? Or, if you exchange regularly for different locations, will you always want to stay in a resort environment rather than finding a small, cozy inn?

An often overlooked possibility is buying a time share on the resale market. Resale prices may be much lower than the cost of a new time-share unit, even in the same condo or villa development. You may be able to find an exceptional bargain from somebody wanting to sell quickly.

Time-share rentals also can be a bargain, with two-bedroom condo apartments and villas in major resort areas often renting for less than a hotel room in the same area. Some resorts have time-share rental offices. And in recent years, nationwide time-share rental agencies have gotten into the business. If you can't use or exchange your time share, you may want to put it on the rental market.

Alternatives Typically, a time share provides for the use of an apartment or villa for a specific week or two weeks each year. But the industry has come up with alternatives that may be more in line with your vacation needs. For example:

Fractional ownership: This is an arrangement by which you may acquire a one-month to a half-year's share of a vacation home, making the cost more affordable since two, four or a dozen families are contributing. Four families might use the property for one full season each, alternating the seasons over the years. About 60 resorts offer fractional ownership plans, primarily on Hilton Head Island in South Carolina and the Outer Banks in North Carolina, as well as in Aspen, Colo.; Palm Springs, Calif.; Newport, R.I. and St. John in the U.S. Virgin Islands.

Private camp resorts: Membership in campground resorts appears to be growing in popularity. Private camps tend to provide more amenities -- such as swimming pools -- without the crowds of public campgrounds. The Skyline Ranch Resort, for example, near Front Royal, Va., offers 140 campsites, a pool and horseback riding. For a $5,500 initial fee, you are entitled to a series of 21-day stays year-round. After each 21 days, however, you must leave the property for a week. Theoretically, you could alternate three weeks on-site and one week off, but "it doesn't happen," says the resort's Bill Bunning. Members also are entitled to use campsites in 21-day intervals at 500 other campgrounds nationally.

Split weeks: Popular in California, this variation permits you to divide your annual week, so that you can use the property for a weekend on one visit and weekdays on a second visit. This option is aimed at travelers who can find time only for short getaways.

Urban time sharing: This variation of the split week seems to be working well in San Francisco. At five small all-suites hotels, you can divide a week-long time share into seven separate one-night stays rather than using your week all at one time. This option has caught on with suburbanites who attend evening theater performances and concerts in the city. They can choose seven nights in the city over a year's period, and after the evening's entertainment, they can remain overnight in their time-share suite.

"With time sharing ... remember that you are buying vacation time and not a real estate investment," warns a new consumer brochure distributed by the American Resort & Residential Development Association. Unlike other real estate, time-share properties generally have not appreciated much in value, and in many cases the value may have decreased. There are exceptions, of course, but you should not count on selling at a profit.

Given the nature of the association, the warning is a strong one. The organization has about 800 members representing about 90 percent of the vacation ownership and time-share industry. About half of the members are resort developers -- the folks who are building and selling second-home and time-share properties. In the past, sales personnel sometimes gave the generally misleading impression that time-share weeks were easily or profitably resold.

The real value of a time share, says Tom Franks, the association's senior vice president, "is in savings accrued to the user by locking in vacation costs each year." If you buy now, you get yearly vacations at 1990 prices. Like paintings, you acquire a time share not for the resale potential but because you like using it, or exchanging it.

For example: Say, you are accustomed to paying perhaps $200 a night for a beach-front hotel room during the prime season. You decide to buy a week's use of a two-bedroom beach condo for $8,500 -- an average price for time shares. At $200 a night, it would take you about six years (six weeks, 42 nights) to recover your $8,500 payment. In six years, however, the cost of a hotel room might have jumped to $300 or more. You can continue to have use of your apartment -- which has a kitchen and is more spacious than a hotel room -- for years to come. For you, the no vacancy sign never goes up. And you also have the option of exchanging it for an apartment in an equivalent resort at some other appealing destination. Finally, you can always expect some return if you decided to sell.

This all sounds perfectly logical, but to make the figures work you must use your apartment regularly, rent it out or arrange an exchange. You also must ensure that the development remains well-managed and is maintained satisfactorily over the years.

Resales

Not everyone who purchases a time-share property ends up wanting to hold onto it for years. Though figures vary, a large number of time-share resales reportedly are available today. As a a result, resales are essentially a buyer's market -- for the time being, anyway -- and there are bargains to be found. Time shares on the resale market generally are selling from 30 to 40 percent less than the original purchase price, according to Linda Miller, vice president of Condolink of Omaha, a major time-share resale and rental firm.

The American Resort & Residential Development Association last year surveyed 601 randomly selected time-share owners and found that 13 percent were actively trying to sell one or more weeks and another 17.5 percent were considering selling. More than half of the owners who were selling indicated they were doing so because they were not making sufficient use of their vacation weeks. Significantly, about 70 percent of the time-share owners surveyed said they were satisfied and had no plans to sell.

These resale figures are challenged as too small by the Resort Property Owners Association. It surveyed 12,000 owners and found that 38 percent had put their time-share weeks up for resale. Some of them, according to the study, had dropped their asking price to less than half the initial purchase price.

Owners often choose to sell because of a "change in lifestyle," says Burr, the association's president. If they bought in Orlando, they may go to Disney World for three years and then tire of it. For the next three years, they organize an exchange -- "which can be time consuming. If you get a couple of lemons in exchange, you say 'that's enough for me.'" Meanwhile, they may be paying an annual maintenance fee of $200 or more.

"Time share is obviously not an investment that will appreciate in value," says Burr. "The resale market is now glutted with owners trying to recover some of their initial cash outlay." He estimates that perhaps 300,000 to 500,000 time shares are on the resale market.

While this is bad news for sellers, he says, the opposite is true for someone interested in buying or renting. Last year, Burr bought a week's time share in a two-bedroom apartment on a golf course in what he describes as a "top-quality" Arizona resort. His occupancy week occurs in March, when the golfing is great. He paid only $1,800 for his time share; originally it sold for $10,000.

Burr is a knowledgeable player on the time-share scene, and he held off buying until he found the price he was looking for. But other bargain hunters may be able to find comparably low prices, he says, by taking advantage of time-share auctions, which are held periodically. His association distributes a list of auction houses where you can be placed on a mailing list for upcoming sales. His organization also can provide a list of firms such as Condolink that handle regular time-share resales and rentals.

Purchasing a budget-priced resale, however, has its own drawbacks, according to Carl G. Berry, who heads San Francisco Suites on Nob Hill, an urban time-sharing operation. Berry chaired a workshop on resales at the recent national convention in Las Vegas of the American Resort & Residential Development Association.

Many resales, says Berry, involve properties from the 1970s that may have been poorly designed or perhaps got off to a shaky financial start and never really gained stability: "There are about 250 to 300 projects in America that by today's standards shouldn't have been done." In addition, the resale broker may not have an office or representative in the community where you choose to buy, and the broker may not offer financing.

The association is urging its member developers to establish resale offices within their projects. Many have not been willing to do so in the past because resales compete with new units. However, the association argues that if prospective buyers know they can count on the developer to resell their time share, they may be more willing to put down a deposit in the first place. Berry says owners have a better chance of making a profit from a resale if their resort development is well-located and has a record of good management and if there is a limit to the number of new units that can be constructed.

Despite the low resale value of many time shares, Franks says the outlook for the future of time shares is optimistic. One reason is that such well-known hotel chains as Marriott, Hilton and Sheraton have entered the vacation time-share market. In addition, an association survey, just completed, indicates that as many as 13 million American households are interested in buying some type of recreational property in the next decade. The industry, Franks says, "is well-positioned to benefit ... from the nation's relentless search for the good life."

On this theme, an advertisement for Marriott Ownership Resorts in Florida, California and South Carolina notes that the industry has undergone considerable change in recent years. "Vacation Ownership -- or time sharing -- is literally worlds away from what it once was."

How-To Time Share Both the American Resort & Residential Development Association and the Resort Property Owners Association offer consumer advice on buying a time share. Among the considerations:

Know yourself: Are you the kind of vacationer who likes returning to a familiar place, or will you become bored quickly of the same view? Does the resort have a variety of activities that interest everyone in the family? Is a condominium apartment the type of vacation lodging that you prefer, or do you really like romantic little hotels and country inns?

Check out the developer: Contact references -- such as people who already own time shares in the development -- as well as the Chamber of Commerce and the Better Business Bureau. Is the firm a member of the American Resort & Residential Development Association?

To curb abusive sales tactics, the association has adopted a code of ethical practices. If a member firm is found to have violated the code, if can be suspended from membership for up to two years. Buyers should determine whether the resort property they are interested in is a member in good standing. If you think you have been given a bum deal, complain to the association.

Among the code's major provisions:

-- Direct mail solicitations cannot imply in any way that the solicitation is from a government agency; a bill collecting, credit reporting, accounting or law firm; a public utility; or a recognized communications service such as Western Union.

-- A member firm cannot mislead a consumer about the size, nature or value of any gift that may be offered. An article in "Developer," the association's magazine explains:

"The 'reasonable man' test is operative here. When the term 'all terrain vehicle' is used, the reasonable man would think of a four-wheel-drive automobile or truck, or at least an off-the-road motorcycle. He would not think of a three-wheeled garden stool."

In addition, the magazine points out, "it is a violation to charge a 'redemption fee' or shipping fee of $100 for a gift which sells for $49.95 or even $99.95."

Check out the management: Are housekeeping standards and security arrangements sufficient? Does the facility have a large enough budget to maintain the property adequately? Time-share owners generally are asessed an annual fee, which may be supplemented by the developer until most of the units are sold. You may want to try out the property in advance of buying by renting for a few days.

Verify exchange programs: Will you have access to a time-share exchange network? How does it work, and how much does each exchange cost? Talk to other owners in the resort complex about their exchange experiences. Are there exchanges at destinations that appeal to you?

For Information American Resort & Residential Development Association, 1220 L St. NW, 5th Floor, Washington, D.C. 20005, 371-6700. For a copy of the organization's guide to buying a time share: 1-800-695-2732.

Resort Property Owners Association, 175 W. Jackson, Suite 1901, Chicago, Ill. 60604, (312) 939-0141. The organization is a source of consumer information as well as the names of clearinghouses that resale, auction or rent time-share properties.