Are Timeshares Worth It? Your Complete Guide
Did you know that more than 9.1 million Americans own a timeshare?
In recent years, timeshare ownership has exploded into an $8 billion industry. Once associated with seniors playing shuffleboard, the average timeshare owner now is 39 years old with children under 18.
With so many people buying into timeshares, you might be asking yourself: Is timeshare a good deal? Are timeshares worth the money?
In this post, we’ll take an unbiased view as we examine the pros and cons of timeshare ownership.
Are timeshares worth it? Read on to find out!
How Do Timeshares Work?
First of all, let’s make sure you understand exactly what a timeshare is and how the concept works.
There are two main types of timeshare properties: deeded and undeeded.
The vast majority of timeshares in the US are deeded timeshares. You are essentially “buying” the property–but you only get to use it for a specified time period each year.
Like other forms of real estate, you can sell or rent your timeshare to someone else, or leave it in your will.
If you purchase a timeshare outside the US, it will most likely be an undeeded timeshare. You’re not actually “buying” the property–it’s more like signing a rental agreement.
In return, you get a license or membership to use the property for a specific amount of time every year.
From here, it gets a little more complicated. You may have the option of purchasing a fixed week (the same week every year) or a floating week (which can be used any time).
Many non-deeded timeshare companies (or “vacation clubs”) operate on a points-based system. You, the owner, buy a specific amount of points that you can redeem at many different destinations.
Now that you know how a timeshare works, let’s examine some pros and cons of buying one.
Pros of Owning a Timeshare
So far, this is probably sounding pretty good, right? A beautiful condo on the beach, the peace of mind knowing where you’ll take your family vacation each year…
Yes, for certain people, there are some pros to buying a timeshare.
Do you enjoy visiting the same place year after year? Do you have your favorite beach and favorite restaurants in your favorite town? If you buy a timeshare, you can visit your favorite place every year.
What if you know you’ll be taking your annual vacation the same week every year? A timeshare could save you the headache of booking hotels (or the heartache of discovering they’re all sold out).
If you have kids or enjoy traveling with friends, a timeshare is also great because it’s typically a lot larger than a hotel room. Most timeshare properties offer two or more bedrooms, a full kitchen, and laundry facilities.
For large groups or families, the comfort and convenience may be well worth the price tag.
Cons of Owning a Timeshare
Because we promised an unbiased perspective, let’s now consider some negative aspects of timeshare ownership.
Do you enjoy traveling to different places each year? Do you hate the idea of being locked into a pre-set week for your annual vacation?
If you answered yes to either question, a timeshare probably isn’t the best idea.
The same goes for singles or couples traveling without kids. If it’s just you (or you and your significant other), do you really need a three-bedroom condo with three full bathrooms? You may find all that extra space just goes to waste–but you’re still paying for it.
Dollars and Cents
Speaking of payments, a timeshare will usually end up costing you a lot more than you bargained for. No matter how friendly your salesperson at the pitch, chances are that there are plenty of hidden fees they’re not telling you about.
For starters, you have to pay property taxes. And no, you can’t write them off.
Then there are the property’s annual maintenance fees. These could run anywhere from several hundred to several thousand dollars per year, depending on the property.
What if the property needs a new roof or suffers damage from a hurricane or water intrusion? Yes, you’re expected to cover your share of those costs too.
That’s what happened in 2012 to the timeshare owners of The Point Resort in Kauai. They were billed a staggering $5,893–each–to cover the costs of water damage.
Other Important Considerations
Unlike other forms of real estate, a timeshare depreciates in value as soon as you buy it. Although you’ll be promised in the sales pitch that you can easily sell it–and make your money back–this is rarely the case.
If you do decide to sell your timeshare down the road, it’s no easy task. In fact, you’ll probably need the help of a timeshare attorney to free yourself from the agreement.
If you’re considering a points-based system, keep in mind that booking or trading properties may not be as easy as it sounds. If you don’t want to travel to a particular place during a certain time of year, chances are the other timeshare owners feel the same way.
Another factor to consider is your current (and future) lifestyle. That timeshare on the ski slopes in Aspen may look great now, but what happens down the road when you have a baby care for? What if you suffer an injury that leaves you unable to ski?
That timeshare will still be there–and you’ll still be paying for it.
Are Timeshares Worth It?
So, what’s the takeaway? Are timeshares worth it?
The answer depends on your reason for buying. Like all major purchases, there are pros and cons of buying a timeshare.
As a financial investment, it’s likely to cost you more than you’ll ever make back–even if you do manage to sell it.
But if you want the peace of mind of returning to the same vacation spot year after year, a timeshare could be your best bet.
Do you have further questions about timeshares? Click here to schedule a free 30-minute consultation with My Timeshare Attorney.
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