Think Twice Before Buying a Timeshare.
If the American Dream is to own your own home, then owning a timeshare or a vacation
home may not be far down the list. Many people dream of having enough money to
spend a couple of weeks every summer at the beach or in the mountains.
Owning a timeshare allows you to dip your toes into the vacation home market even if
it’s just for one or two weeks during the year, even if you can’t afford the luxury of a
second home. Many people are looking for ways to save money on travel, but a
timeshare may not be the best way use of your hard earned income to accomplish your
The savings may not be as great as a hotel:
Don’t be fooled into thinking that purchasing a timeshare is an easy way to purchase a
piece of your dream vacation home at a fraction of the sticker price. Timeshares are still
very pricey even if you’re buying the equivalent of just one or two weeks at a time. In
fact, many timeshare programs are run by hotel chains with locations around the
country but owning a timeshare may cost you as much or more than renting a
comparable hotel room.
Like chips in a casino, points often hide the true cost of what you’re spending, as it’s
hard to equate them with actual dollar values. At one popular timeshare company in the
US, you could use your yearly timeshare points to purchase a two-week vacation in
Hawaii in a one-bedroom place for approximately 300, 000 points during the peak
To put the above in perspective, I have a friend who receives 89k points/year, and he
paid $10k to receive those points. If you financed your timeshare using a ten-year loan
like he did, you would have purchased those 89, 000 points for about $1, 000 per year
plus a ton of interest. That two-week hotel stay in Hawaii ultimately could cost you
approximately $3, 370 — again, ignoring the interest payments — once you convert
your points into a dollar value. Could you have found a nice hotel for two weeks in
Hawaii for less?
Timeshares add to your debt:
Given how expensive they can be, it should come as no surprise that timeshares can
put you into debt very fast. Remember my friend from above? That loan that he took out
cost him a whopping $230/month! By the time he finishes paying off his loan for the
timeshare, he will have paid $27, 600 (!) for a $10, 000 timeshare purchase. So,
technically, a Hawaiian vacation like the one mentioned in the earlier example really
costs over $6, 000 if you consider the interest that he’s paying.
The fees keep coming:
Even after you pay off your loan and own your timeshare free and clear, you’ll still have
to pay monthly maintenance fees. These fees are very similar to HOA fees, or dues that
you have to pay for the upkeep of the property. The maintenance fees for many popular
timeshares can be upwards of $45 per month. So that “free” vacation that you’ve finally
paid off will continue to cost you hundreds of dollars per year. And like HOA fees,
timeshare maintenance fees can increase over time.
Timeshares are hard to resell:
Another major downside of timeshares is that there is practically no secondary market
for reselling your purchase. Thus, if you have buyer’s remorse or you just need to
recover your money, you’ll have a hard time recouping anywhere near what you spent.
In many cases, timeshare owners wind up selling their timeshares back to the property
management companies at a tiny fraction of the original price.
While saving money on vacations is an admirable, don’t get swept away by the dream
of owning your own vacation home. When you purchase a timeshare, you may be
buying a small piece of that dream, but purchasing a timeshare is not for everyone, and
it’s not a particularly good investment.
Timeshare Resale Market
If you are lucky enough to avoid buying a timeshare
than this was great information. If you are a current
owner of a timeshare than you need to call me
today to start the process of getting rid of the ball
and chain of timeshare ownership.