Timeshares can guarantee you vacation time since they often come with fixed annual dates for right-of-use. On top of that, timeshare resorts typically offer larger accommodations (often two bedrooms or more) and more in-room amenities, such as kitchens and washing machines, than a hotel room.
A timeshare is not an investment, it’s a vacation. It’s also an illiquid asset that is likely to lose value over time. Ultimately, timeshares are like swimming pools, if you buy one, do so because you love the idea of owning it, not because you expect to make a profit.
Yes, timeshares are a waste of money. They are marketed as an investment. … In fact, you can buy someone’s timeshare for as little as $1 or even for free. The amount of money it will cost every year to own a timeshare will likely be more than if you booked a week at the same timeshare property on your own.
A Timeshare’s Value Won’t Appreciate
According to the Association of Vacation Owners, an independent advocacy group for timeshare owners, there are millions of timeshares available on the secondary market.
In fact, as LearnVest points out, “the Federal Trade Commission warns against buying timeshares as financial investments.” Unlike typical real estate investment properties, you are almost guaranteed to lose money when selling your part of the timeshare.
If you stop paying on your timeshare loan, you face foreclosure. Foreclosure is the process whereby the lender files to take possession of the property and sell it at auction to recover the money you owe. … Your contract authorizes the trustee to sell the timeshare in the event you stop paying on it.
Timeshares Are Forever
Or, at least, for a really long time. When you purchase a timeshare, know that you’re generally buying “deeded real estate.” It’s similar to buying a house, except you don’t actually own a freestanding home. Instead, you own a sliver of real estate somewhere.
The Pros and Cons of Owning a Timeshare
|Pros of Timeshare||Cons of Timeshare|
|Luxurious accommodations||Annual fees & dues|
|Vacation exchange||Upfront cost|
Another reason why it’s so difficult to cancel your timeshare is that there are limited alternatives available. … Also, timeshare companies make it incredibly difficult for owners to sell their properties. Resort officials want owners who make payments on time.
The basic timeshare concept is simple: you pay a one time purchase fee that entitles you to a week every year (or sometimes every other year) at a resort. … Due to the upfront costs, and the fact that the majority of timeshares do not appreciate like normal real estate, the cost savings is in future vacations.
In the most traditional form, when you buy timeshare you essentially purchase the right to vacation one week every year at a specific timeshare resort. Timeshares offer more flexibility than typical vacations, and include options for points-based memberships and biennial usage.
It’s rare that a timeshare increases in value. In fact, expect it to lose value, as the total cost of your ownership was marked up to cover sales presentations, incentives and giveaways. Timeshares are usually sold to you when you’re on vacation and your defenses are down. Most have high yearly maintenance fees.