Are Timeshares a Good Investment for Your Future?

Timeshare salespeople are good at what they do. They manage to talk you into suspending your vacation for a few hours so they can make a high-pressure sales pitch to you for one of their “vacation home” products. They will probably explain how their timeshares would be yours to own and how, over the years, they would cost less than a series of hotel stays.

In other words, the main pitch of the sales presentation is that you can have unlimited vacations in your favorite destination forever. You plunk down a sizable amount of cash upfront, and paradise is yours! The pitch is designed to make you believe that a timeshare purchase is a good investment in your future and the future of your family.

But as we all know, a presentation is one thing, and reality is another. Once you get out of the sales office, are timeshares a good investment?

Unfortunately, as anyone who has been through the experience can tell you, buying a timeshare can be a disastrous personal finance decision. Buying a timeshare isn’t like making a down payment on all your future vacations, after which you take trips to your beach house for free.

Timeshare ownership is instead a continuing obligation. You won’t just pay for the timeshare and enjoy your purchase. Rather, you’ll have an ever-increasing amount of fees to pay every year, just for the privilege of using what you’ve bought. This article will look at that problem as well as two others: actually vacationing with a timeshare and trying to sell your unit.

Timeshare Fees: You’re Always Paying for Something

The whole idea of vacation ownership is that you aren’t paying someone else to rent a hotel room at their property. You have your own. So it should make sense that, whether you buy a fixed week or points in a vacation club (like Marriott or Disney), you as the owner are done paying a resort for the privilege of staying there.

That’s not the case. You’ll pay a hefty chunk of money to your timeshare resort every year in the form of annual maintenance fees. According to the American Resort Development Association (ARDA), the average amount of annual fees for a timeshare is $1,000. And that amount increases every year. 

So, over 20 years of owning a timeshare, you could pay $25,000 or more beyond the initial purchase price just for the privilege of “vacation ownership.” And that number doesn’t account for repairs, maintenance, or other costs that the resort might charge you.

Using Your Timeshare: You Don’t Always Get What You Paid For

After putting all of that money down for the privilege of owning a timeshare, you’d think that you would be getting a lot. Sadly, that’s not how this business works. Once you’ve bought in, timeshare resorts are no longer interested in charming you with fancy properties and amenities. 

Now the goal is for them to meet their minimum contractual requirements. Anything above and beyond that goal is wasted money for them.

The first problem you might find along these lines is that the unit you actually purchased doesn’t look like the unit you saw when you toured the resort. Perhaps the units you were shown as part of the sales presentation were better furnished or decorated in order to entice you into buying. Once you did, though, there was no reason to keep up the charade.

The second problem is that, in many cases, you might even have a problem using your timeshare at all. BBB reviews for Capital Resorts, for example, repeatedly show timeshare owners who can’t make reservations to use units. Sometimes they manage to make a reservation and end up with a unit much lower in quality than what they bargained for.

Even high-end exchange programs can be a money pit. These programs are supposedly a way for timeshare owners to “trade” time at their units for stays at other resorts. Often, though, owners find that their units don’t exchange for as much value as they would like. And of course, there’s always a fee associated with these programs.

From the standpoint of value for your money, timeshares are terrible investments.

Selling a Timeshare: Paying to Get Rid of It

When most people hear the term “real estate investment,” their mind goes to a familiar place. You buy a piece of land or a building, which you use for years as the value increases. When you are done with the real estate, you put it up for sale and have a lot of offers, all of which are higher than what you paid. You pick the best offer and make a tidy profit on the deal.

With timeshares, none of that is true. It’s a matter of common knowledge that the vast majority of timeshares actually lose value over time. In fact, the only place that many of these units may have any real value is in the timeshare sales center. In other words, they have no real value.That is the polar opposite of a good real estate investment.

With this information in hand, it’s not hard to see why selling timeshares is an extremely difficult, and often fruitless, pursuit. Many timeshare owners often turn to selling their units on websites like eBay or Craigslist for much less than they paid — sometimes with purchase prices as low as $1. 

That may sound extreme, but many are just that desperate. The saddest part is, for all that desperation, many of these owners are not even able to give away their timeshares.

Other owners, who understandably do not want to lose so much money, try to get third-party help. And if you take this route, you have to be very careful. There are many timeshare resale scams out there. These unscrupulous companies take large upfront payments from desperate owners, promising an easy sale, then disappear with the money.

If you want to sell, the best way to go is with a licensed Realtor who has timeshare experience. But even the best Realtor is going to have a tough time, and their services won’t come cheap. And while they may be able to come through on a choice unit in Hawaii, you’ll likely be out of luck if your timeshare is in Florida, Las Vegas, or a less in-demand resale market.

Though a Realtor will do better for you than an eBay listing, they likely will not be able to help you make a profit on your unit because the secondary market for timeshare units is just that bad. As a method of real estate investment, then, a timeshare is a very bad idea.

So, Are Timeshares a Good Investment?

In a word, no. Under the commonly accepted definition of the term, a timeshare isn’t an investment at all. Real estate has inherent value that often appreciates over the years. You can rent it out or use it for any number of purposes that can help make you money. Often, property ownership also comes with tax benefits that further make it a wise investment

Timeshare ownership, though, is none of those things. It’s a fractional ownership interest with little inherent value. Renting it is difficult or impossible. You can’t even use it for more than a few days every year. Along with that, you are saddled with an ever-increasing amount of fees and inconveniences that will only cost you more money as time goes on.

The only way to consider a timeshare a worthwhile investment is if you look at it from the perspective of a timeshare resort. They invest time and money into high-pressure sales presentations, get customers to sign up, and then loop them into a never-ending parade of fees. 

At that point, the resort has a locked-in source of income, and it will do everything it can to protect its investment. In other words, they’ll welcome you to check in, but they will try to make it so that you can never leave.

Are You Stuck? Centerstone Group Can Help

Maybe you are reading this and have decided not to purchase a timeshare. But maybe you already have a timeshare, and you’re worried that you have made the wrong decision. You might be wondering, “Am I just stuck?”

No. Buying a timeshare can be a costly mistake, but it’s not one you have to live with forever. Centerstone Group is a timeshare exit company made up of dedicated professionals. Together, we have decades of experience in the timeshare industry, and we use a variety of proprietary methods to help our clients legally and ethically exit their timeshare contracts.

As a BBB-accredited business with an outstanding track record, Centerstone Group takes its customers’ problems to heart and works tirelessly to ensure that they get the best possible resolution. 

Whether we use a pressure campaign to get your timeshare company to follow through on its own policies or work with our attorney partners for an intensive legal strategy, we can help you. Contact us today for a free consultation and case evaluation.