The idea of vacation ownership is rooted in the belief that if you take annual vacations (or even more frequent trips), it might make financial sense to own a functional real estate interest or timeshare. The old thinking goes, “Why keep saving for hotel rooms every year when you can actually own a piece of paradise?”
Unfortunately for timeshare owners, the industry has never really worked that way in practice. Even deeded timeshares and fixed-week fractional interests come with annual maintenance fees, property taxes, HOA fees, and special assessments that often make owning a timeshare more of a financial burden than a benefit.
The modern wave of vacation clubs with point systems, exchange company fees, and complicated reservation processes makes the whole experience even more complex and expensive. Chances are, the true cost of a timeshare will not be fully explained during the timeshare sales presentation. You often won’t see all the fees until your first set of bills arrives.
This article will help you understand the true cost of a timeshare by breaking down what you can expect to pay — from the purchase price and mortgage to taxes and special assessments. In many cases, buying a timeshare is not a wise personal finance decision.
The Costs That Come With a Timeshare
Even sophisticated buyers can be surprised when they add everything up and realize that a timeshare isn’t such a great deal after all. Knowledge is your best weapon against being taken advantage of by timeshare companies.
Let’s break down all the different costs associated with owning a timeshare.
The Timeshare Purchase and Mortgage
The cost most people think of when considering a timeshare is the upfront payment you make to a developer for the timeshare interest. This number can vary based on the type of timeshare you have — whether it’s a fixed- or floating-weekdeeded timeshare or a points-based vacation club like Hilton Grand Vacations Max, Marriott, or Disney Vacation Club.
The more you buy — whether it’s a deeded real estate interest or points representing the right to use a wider variety of timeshare resorts — the higher the price tag. According to the American Resort Development Association (ARDA), the average cost of a timeshare interval is over $24,000, and some timeshares can cost over $100,000.
For our example, assume a purchase price of $30,000 with a $3,000 down payment. You would need a $27,000 mortgage to cover the difference. Unlike a home loan, timeshare mortgage interest rates can be high — sometimes as high as 20%. Here, we assume a common rate of 15.9% for 10 years.
Adding the principal ($27,000) to the mortgage interest over 10 years, your $30,000 timeshare would actually cost $54,072.51, meaning you pay almost as much in interest ($27,072.51) as in principal over 120 payments.
If that number is shocking, keep in mind that we haven’t even covered other fees yet.
Annual Timeshare Maintenance Fees
According to ARDA’s 2019 research, maintenance fees range from $640 per year for a small studio to nearly $1,300 for a three-bedroom unit. For our example, we’ll assume an annual fee of $1,000 for seven nights of timeshare usage per year.
These fees will likely increase over time. Maintenance fees are subject to inflation. Assuming 8.5% annual inflation, over 10 years, you’d spend $17,096 on maintenance fees alone — and $53,489 over 20 years.
You can calculate the future cost of your specific maintenance fees using Centerstone Group’s Maintenance Fee Calculator, which factors in current U.S. inflation rates.
Timeshare Property Taxes, Homeowners Association (HOA) Fees, and Special Assessments
Timeshare ownership comes with legal obligations, including property taxes and HOA fees. Failing to pay these can result in foreclosure.
Property taxes vary by state and unit size. For our example, assume $500 per year, totaling $5,000 over 10 years and $10,000 over 20 years.
HOA fees maintain common areas and amenities. Expect roughly $400 per year, totaling $4,000 over 10 years and $8,000 over 20 years.
Special assessments cover unexpected repairs or renovations. These are harder to predict; for our example, we assume $500 every 10 years, totaling $1,000 over 20 years.
Fees for Using, Reserving, and Exchanging Your Timeshare
Even after accounting for the purchase, mortgage, maintenance fees, property taxes, HOA dues, and special assessments, you’re not done yet. These costs just get you the timeshare — they don’t actually let you use it. Timeshare companies often have dozens of hidden fees you likely won’t learn about until it’s too late.
Reservation Fees
If you want to book time at your vacation home, you’ll need to make a reservation and pay a reservation fee, typically around $50 per stay. For one five-night stay per year, that totals $500 over 10 years and $1,000 over 20 years.
Guest Certificates
Many timeshare owners don’t use their timeshare every year. If you lend your timeshare to a friend, you’ll need to pay for guest certificates, usually $100 each. Lending your timeshare three times per decade adds up to $300 over 10 years and $600 over 20 years.
Exchange Company Fees
If you want to travel and join a timeshare exchange company like Interval International or RCI, expect to pay around $65 per year. That comes to $650 over 10 years and $1,300 over 20 years.
Additionally, every time you book a stay through an exchange company, you’ll pay a reservation fee. For a seven-day stay, this could be around $270 per year, totaling $2,700 over 10 years and $5,400 over 20 years.
Other Fees and Resale Costs
Timeshare resorts also charge fees for specific situations. For example, listing your timeshare on the resale market often incurs a commission to the realtor. The same is usually true if you want to rent out your unit. Essentially, any attempt to monetize your timeshare comes with additional costs.
So, What Is The Total Cost of a Timeshare?
Now that we’ve added up all those expenses, we can see the total cost. Keep in mind that these estimates are conservative. For a $30,000 timeshare unit, your total cost over 10 years will be $84,818.51.
Assuming you have seven nights at your timeshare per year and actually use every single night — a scenario that is almost never the case — you would be paying $1,211.69 per night. If you don’t use all your nights, the average cost per night only goes up.
Over 20 years, the total cost climbs to $126,861.51 — more than four times the original purchase price of your timeshare unit. If you were lucky enough to use every single night for 20 years — again, highly unlikely — that comes out to $906.15 per night. While slightly better than the 10-year cost per night, it’s still far more expensive than staying in a quality hotel or resort.
Tired of Paying Through the Nose? Centerstone Group Can Help
Looking at numbers like these makes it easier to understand why so many owners want out of their timeshare contracts. That’s where Centerstone Group can help. As a premier timeshare exit company, we help clients achieve legal and ethical timeshare exits. Whether through contract cancellation, proprietary pressure campaigns, or assistance from our legal partners, we have years of experience providing effective exit solutions.
If you are a timeshare owner looking to stop the financial strain, we would be honored to assist you. Centerstone Group is an A+-rated company with the Better Business Bureau (BBB) and has received dozens of positive reviews from satisfied clients. Contact us today for a free consultation and case evaluation.
The idea of vacation ownership is rooted in the belief that if you take annual vacations (or even more frequent trips), it might make financial sense to own a functional real estate interest or timeshare. The old thinking goes, “Why keep saving for hotel rooms every year when you can actually own a piece of paradise?”
Unfortunately for timeshare owners, the industry has never really worked that way in practice. Even deeded timeshares and fixed-week fractional interests come with annual maintenance fees, property taxes, HOA fees, and special assessments that often make owning a timeshare more of a financial burden than a benefit.
The modern wave of vacation clubs with point systems, exchange company fees, and complicated reservation processes makes the whole experience even more complex and expensive. Chances are, the true cost of a timeshare will not be fully explained during the timeshare sales presentation. You often won’t see all the fees until your first set of bills arrives.
This article will help you understand the true cost of a timeshare by breaking down what you can expect to pay — from the purchase price and mortgage to taxes and special assessments. In many cases, buying a timeshare is not a wise personal finance decision.
The Costs That Come With a Timeshare
Even sophisticated buyers can be surprised when they add everything up and realize that a timeshare isn’t such a great deal after all. Knowledge is your best weapon against being taken advantage of by timeshare companies.
Let’s break down all the different costs associated with owning a timeshare.
The Timeshare Purchase and Mortgage
The cost most people think of when considering a timeshare is the upfront payment you make to a developer for the timeshare interest. This number can vary based on the type of timeshare you have — whether it’s a fixed- or floating-week deeded timeshare or a points-based vacation club like Hilton Grand Vacations Max, Marriott, or Disney Vacation Club.
The more you buy — whether it’s a deeded real estate interest or points representing the right to use a wider variety of timeshare resorts — the higher the price tag. According to the American Resort Development Association (ARDA), the average cost of a timeshare interval is over $24,000, and some timeshares can cost over $100,000.
For our example, assume a purchase price of $30,000 with a $3,000 down payment. You would need a $27,000 mortgage to cover the difference. Unlike a home loan, timeshare mortgage interest rates can be high — sometimes as high as 20%. Here, we assume a common rate of 15.9% for 10 years.
Adding the principal ($27,000) to the mortgage interest over 10 years, your $30,000 timeshare would actually cost $54,072.51, meaning you pay almost as much in interest ($27,072.51) as in principal over 120 payments.
If that number is shocking, keep in mind that we haven’t even covered other fees yet.
Annual Timeshare Maintenance Fees
According to ARDA’s 2019 research, maintenance fees range from $640 per year for a small studio to nearly $1,300 for a three-bedroom unit. For our example, we’ll assume an annual fee of $1,000 for seven nights of timeshare usage per year.
These fees will likely increase over time. Maintenance fees are subject to inflation. Assuming 8.5% annual inflation, over 10 years, you’d spend $17,096 on maintenance fees alone — and $53,489 over 20 years.
You can calculate the future cost of your specific maintenance fees using Centerstone Group’s Maintenance Fee Calculator, which factors in current U.S. inflation rates.
Timeshare Property Taxes, Homeowners Association (HOA) Fees, and Special Assessments
Timeshare ownership comes with legal obligations, including property taxes and HOA fees. Failing to pay these can result in foreclosure.
Property taxes vary by state and unit size. For our example, assume $500 per year, totaling $5,000 over 10 years and $10,000 over 20 years.
HOA fees maintain common areas and amenities. Expect roughly $400 per year, totaling $4,000 over 10 years and $8,000 over 20 years.
Special assessments cover unexpected repairs or renovations. These are harder to predict; for our example, we assume $500 every 10 years, totaling $1,000 over 20 years.
Fees for Using, Reserving, and Exchanging Your Timeshare
Even after accounting for the purchase, mortgage, maintenance fees, property taxes, HOA dues, and special assessments, you’re not done yet. These costs just get you the timeshare — they don’t actually let you use it. Timeshare companies often have dozens of hidden fees you likely won’t learn about until it’s too late.
Reservation Fees
If you want to book time at your vacation home, you’ll need to make a reservation and pay a reservation fee, typically around $50 per stay. For one five-night stay per year, that totals $500 over 10 years and $1,000 over 20 years.
Guest Certificates
Many timeshare owners don’t use their timeshare every year. If you lend your timeshare to a friend, you’ll need to pay for guest certificates, usually $100 each. Lending your timeshare three times per decade adds up to $300 over 10 years and $600 over 20 years.
Exchange Company Fees
If you want to travel and join a timeshare exchange company like Interval International or RCI, expect to pay around $65 per year. That comes to $650 over 10 years and $1,300 over 20 years.
Additionally, every time you book a stay through an exchange company, you’ll pay a reservation fee. For a seven-day stay, this could be around $270 per year, totaling $2,700 over 10 years and $5,400 over 20 years.
Other Fees and Resale Costs
Timeshare resorts also charge fees for specific situations. For example, listing your timeshare on the resale market often incurs a commission to the realtor. The same is usually true if you want to rent out your unit. Essentially, any attempt to monetize your timeshare comes with additional costs.
So, What Is The Total Cost of a Timeshare?
Now that we’ve added up all those expenses, we can see the total cost. Keep in mind that these estimates are conservative. For a $30,000 timeshare unit, your total cost over 10 years will be $84,818.51.
Assuming you have seven nights at your timeshare per year and actually use every single night — a scenario that is almost never the case — you would be paying $1,211.69 per night. If you don’t use all your nights, the average cost per night only goes up.
Over 20 years, the total cost climbs to $126,861.51 — more than four times the original purchase price of your timeshare unit. If you were lucky enough to use every single night for 20 years — again, highly unlikely — that comes out to $906.15 per night. While slightly better than the 10-year cost per night, it’s still far more expensive than staying in a quality hotel or resort.
Tired of Paying Through the Nose? Centerstone Group Can Help
Looking at numbers like these makes it easier to understand why so many owners want out of their timeshare contracts. That’s where Centerstone Group can help. As a premier timeshare exit company, we help clients achieve legal and ethical timeshare exits. Whether through contract cancellation, proprietary pressure campaigns, or assistance from our legal partners, we have years of experience providing effective exit solutions.
If you are a timeshare owner looking to stop the financial strain, we would be honored to assist you. Centerstone Group is an A+-rated company with the Better Business Bureau (BBB) and has received dozens of positive reviews from satisfied clients. Contact us today for a free consultation and case evaluation.