Breaking Down Timeshare Costs: Is Ownership Worth It?

Timeshare cost: person using a calculator while handing out cash

According to timeshare companies like Marriott Vacation Club and Wyndham, the cost of owning a timeshare is invaluable. The quality family time, memories, and vacation destinations you get to experience make the purchase seem like a worthwhile investment. 


So, if it’s such a good investment, why is it that so many timeshare owners end up compromising their personal finances? Because a timeshare isn’t really an investment. Investments make you money, but with timeshares, there are many additional fees that owners don’t find out about until it’s too late. 


If you are thinking about buying a timeshare, don’t go into it thinking that it’s just annual payments that you’ll be responsible for. There are a lot of extra costs that timeshare buyers have to pay just to be able to visit their vacation spot for a week each year. Let’s explore all the added expenses of timeshare ownership that you may not be aware of before you decide to buy.


Breaking Down the Timeshare Cost

Timeshare companies make a living out of targeting average vacationers. They send these unbeknownst travelers gift cards and vouchers for free hotel room stays in exchange for attending timeshare presentations


Then, they treat guests to fancy complimentary breakfasts while showing them slideshows of dream timeshare destinations. Their tactic is all about distracting vacationers with perks, platters, and pretty places to make them feel like living this lush lifestyle is totally attainable for their budget.


But it doesn’t stay attainable for long. Within a matter of weeks from signing the initial timeshare contract, buyers will start to see just how expensive timeshare ownership really is. Here is a breakdown of the timeshare costs that you’ll be responsible for if you decide to purchase a timeshare property.


Upfront Costs

Person signing a check

Timeshares always have an upfront cost. This is the total value that a timeshare property is listed as. Like in real estate, every timeshare has an overall purchase price that can technically be paid for all at once. This price can range from $10,000 to more than $100,000 depending on the location, size, and timeshare developer it was bought from. Since most people who buy timeshares don’t have the means to pay for the entire property all at once, they have to finance it.


There are various ways to finance a timeshare purchase. One way is to set up a payment plan with your timeshare provider. If you have a timeshare with Disney in Orlando, Florida, you can pay off your timeshare value in chunks. This can mean paying a couple thousand per year until the entire property is paid off. 


Some timeshare owners opt to take out a personal loan in order to pay for their property. This allows them to have lower monthly payments and potentially lower interest rates. But if their credit score and personal finances don’t allow for either of these options, owners can choose to take out a home equity loan


This is when the timeshare purchaser’s primary home serves as collateral for their timeshare. It’s best to avoid this option as it can result in losing both properties if you’re unable to keep up with timeshare payments. 


Keep in mind that when you see the upfront cost for a timeshare, the actual amount you’ll end up paying for the property is much higher. Timeshare companies have average interest rates of 14-20%. So if you purchase a $30,000 timeshare with a 10% down payment of $3,000 and pay a 20% interest rate over a period of 10 years, the total amount you’ll pay for the property will end up being over $55,000 — and that’s before adding in maintenance fees. Although taking out a personal or home equity loan is sometimes a more affordable option, interest rates will still cause you to spend thousands more. 


Maintenance Fees

All timeshare resorts charge their customers annual maintenance fees. These are timeshare fees that go toward paying the salaries of workers and the upkeep of the resort. The money is used to update amenities in communal areas like pools, tennis courts, and lounges. It can also pay for in-unit upgrades like re-tiling bathrooms, replacing old air conditioner units, and putting in hardwood floors. 


Like with a regular house, periodic updates are an important part of keeping your timeshare unit livable. You want to know that the shiny, modern unit you’re paying for won’t get worn down by the many travelers staying in the space. You also want to know that it won’t look outdated within a matter of 10 years. 


But the problem with maintenance fees is that, like rent on an apartment, the prices don’t stay the same. In fact, maintenance fees are notorious for rising dramatically each year. And not all of this amount goes toward maintaining the property or paying the resort staff. In fact, 30%-50% goes toward the greedy management at the timeshare company in the form of “management fees.”


Most timeshare owners don’t read their timeshare contract closely enough to see if there’s a cap on how much annual fees are allowed to rise each year. Often there’s a clause that prevents developers from increasing fees by more than 10-15%, but that’s still a significant amount. 


If you buy a timeshare with the national average maintenance fee cost of $1,000 per year, you should expect these rates to rise by at least 5% annually. If they continue to increase at this rate, you will be paying $1,500, or 50% more, within a decade of owning your timeshare


Special Assessments

Timeshare cost: house in rubbles

The timeshare industry doesn’t just make money on upfront costs and maintenance fees. There are also special assessment costs that can be applied at any time. These fees pay for maintenance needs that result from unprecedented events like hurricanes, blizzards, earthquakes, or any other natural disaster that can affect vacation properties


How do you dodge these timeshare costs? By buying a property in an area that’s not affected by any sort of weather catastrophe. But because a lot of timeshares are located in disaster-prone beach or mountainous areas, this can’t always be avoided. While special assessments fees are not a manipulative expense that developers sneakily force their customers to pay, it’s still an unexpected cost that will rarely be discussed when you initially sign your timeshare contract.


Emotional Distress

The true cost of a timeshare is not only financial. It can also cause a great deal of stress and resentment — emotions you should never have to associate with vacationing. 


When you were pitched the idea of owning a timeshare, it seemed idyllic and affordable. But now that you’ve had distance from the initial sale, you’re realizing how much of a burden timeshare ownership is. Trying to book vacations for an entire family’s schedule in one limited timeshare week can be a major challenge. And being forced to communicate with a timeshare company that has no sympathy for the financial strain they’ve put you in adds even more anxiety to the experience. At this point, are the emotional and financial costs too heavy to make owning a timeshare worth it? 


Avoid an Unprecedented Timeshare Cost

Timeshare companies use all kinds of propaganda in order to convince potential buyers to sign their contracts. These companies will show them swanky vacation spots and give them all kinds of free perks in order to convince them that a luxury jet-setting lifestyle can be achieved at an affordable price point. But this is rarely true. Even if the timeshare company is open about the sticker price of a timeshare property, they’ll rarely discuss all the added timeshare costs that come with staying at your vacation home


Timeshare ownership comes with many unforeseen expenses. Whether you choose a developer financing plan or a loan, the high interest rates that come with paying off your timeshare mortgage end in you having to pay much more than the initial upfront cost of the property. Annual maintenance fees from your timeshare resort can increase far beyond what you were initially paying within a matter of years. And if your timeshare property resides in a disaster-prone area, you never know when assessment fees will wipe out your bank account. 


If you’re looking to make a good investment with no hidden fees involved, do not buy a timeshare. But if you already have and are finding that it comes with all kinds of timeshare costs that you were not prepared to handle, exiting ownership may be your best bet for escaping financial ruin. 


Luckily, this can be done with the help of Centerstone Group. We are a full-service advocacy group that specializes in resolving timeshare contracts for clients looking to escape ownership. If you were a victim of fraud, high-pressure sales tactics, or misrepresentation during the timeshare sales process you may be eligible for our services. Contact us for a free consultation.


Get Your FREE Consultation!