My family recently traveled to a popular vacation destination and stayed in a timeshare. It wasn’t our own and we didn’t rent it from anyone; apparently during times when the resorts are not full, the condos can be offered as hotel rooms to anyone who wants to book them. So, we ended up in a beautiful resort, complete with gorgeous swimming pools, many activities, and a full kitchen, as well as a washer and a dryer, in every unit! We were invited to a free breakfast, which we realized was going to be a sales presentation. Being short on time as it was, we politely declined, but we were curious: Is buying a timeshare a good investment? Here are some of the pros and cons to consider if you are thinking about making a purchase:
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A timeshare might be great if you want to visit the same place every year. Buying a vacation home in another state or country might be prohibitive in cost, but purchasing a timeshare is more affordable. If, for example, your timeshare costs $10,000, then aside from paying the annual maintenance fee, you’ll have a property to visit for one or two weeks per year every year while you own it. This means that you’ll avoid the possibility of staying in a seedy hotel or not being able to find somewhere affordable to stay. You also get the benefits of owning a condo that you can vacation in, without having to worry about upkeep. Everything is taken care of while you’re not there.
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You can usually visit other areas through timeshare exchange. Depending on the type of timeshare program you sign up with, you can usually exchange your weeks and your location for stays in other locations, maybe even at different times of the year. This way, you’re not locked in to one particular vacation destination if you don’t want to be. There may be fees involved in exchanging, however.
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The amenities are often great. A timeshare often offers amenities that most hotels simply don’t have. I already mentioned full kitchens (including all kitchenware) and laundry areas. There are usually shopping options on-site, and there may be a whole host of activities to take part in, such as golf, fishing, boating, classes and more. Some communities are gated with excellent security, which can ease your mind if you are staying in a bigger city.
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Timeshare properties don’t appreciate in value over time. Unlike traditional real estate investments, you’re not likely to make your money back if you sell your timeshare. This can be ameliorated if you find a timeshare in foreclosure, or if you buy it from someone else rather than from the property management company. I have heard of people finding timeshare properties for $3,000 or less, so it might make sense to look around for a private seller. Remember also that it can be very difficult to sell your timeshare at all. The dozens or hundreds of timeshare-for-sale listings that you see should assure you that it usually tends to be a “buyer’s market” when it comes to timeshares.
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There have been scams affiliated with timeshare opportunities. If you are looking for a property outside of the United States, where there are laws governing what promises can and cannot be made at timeshare presentations, you need to make sure to proceed with due diligence. Research any claims made and don’t feel like you need to make a decision to buy on the spot (although the presenter may very well make you feel like you have to).
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There are sometimes hidden fees. Peruse the contract carefully to see what the fees will be for maintenance, exchanging weeks or locations, and participating in activities. Everything should be spelled out for you. If you have questions, be sure to consult with a real estate attorney.
For some people and in some situations, timeshares make sense, and for others, a timeshare could become a money pit. If you take vacations every year and like to stay in upscale resorts, it might be worth looking into as a viable and affordable vacation option.
Do you have a story to share about purchasing a timeshare? Would you recommend it to a friend? Tell us about it!
