By and large, timeshares don’t represent a good investment. They cost tens of thousands of dollars to purchase, come with annual maintenance fees that generally climb every year, and aren’t easily resold. However, that doesn’t deter people from considering them. This leaves many to wonder, are timeshares ever worth it?
The Potential Benefits of Timeshares
Even though timeshares have a reputation for being expensive, that doesn’t mean they don’t offer certain benefits over other vacation options. One of the main features of owning a timeshare is predictability. You know exactly where you can stay and when you have access to the unit.
Essentially, the ability to spend time at the timeshare is guaranteed. For individuals who like to plan well in advance, this can offer a lot of peace of mind.
Additionally, many timeshares come with features that aren’t always available in all hotels. For example, you may have a full kitchen or a decent sized kitchenette. These amenities make it easier to prepare your own meals. A lot of timeshares also have living areas and separate bedrooms, making them feel more like an apartment or condo than a hotel.
Now, this isn’t to say that you can’t find those features in a hotel. There are numerous chains, especially those that cater to extended stays, that offer similar arrangements. However, they might not be as prevalent as traditional rooms, depending on your destination.
The Potential Drawbacks of Timeshares
In many cases, the cost of a timeshare is the biggest drawback. Along with paying for your portion of the unit, you have to contend with annual maintenance fees. And, if you financed the purchase, you’re also spending money on interest along the way.
Usually, you’ll spend significantly more on a timeshare than you would on a five-star hotel room in the same city, particularly if you are paying down a timeshare loan. Further, you may not have access to all of the amenities you can get with a hotel, like concierge services or continental breakfasts.
For some, the predictability a timeshare offers isn’t actually a benefit; it’s a hindrance. If you are restricted to a single unit, then you can’t necessarily swap time at your timeshare for something else. Plus, if you can only use the property during a predetermined week each year, you have to take a vacation then or risk missing out for the year.
Selling a timeshare is also usually a challenge. In the vast majority of cases, you aren’t going to recoup what you spent in the first place. Plus, market oversaturation is common. Unless you have a highly desirable unit in a great location, it can take months or years to offload a timeshare, and you’ll often have to deal with a loss to get it off your hands.
Is There Such a Thing as an Affordable Timeshare?
While the majority of timeshares aren’t a wise investment, that doesn’t mean there aren’t deals. However, if you want to find one, you need to abandon the idea of buying into a new property.
The timeshare resale market can hold some bargains. Since many timeshare owners are desperate to offload their timeshares, they may be willing to sell you theirs for cheap. Effectively, by buying a “used” timeshare, you can avoid paying retail, and that can make all of the difference.
In some situations, buyers report finding timeshares on the resale market for less than a dollar. Usually, this happens when the owner simply wants to get out of paying for the annual maintenance fees and is willing to let the property go for nothing.
If you can find a significantly discounted timeshare, your only property-related cost becomes the maintenance fees. In those cases, a timeshare can actually be reasonably affordable.
For example, if you secure a week (seven days) at a timeshare for a dollar and are only responsible for $980 in maintenance fees (the national average), you’re effectively spending $140 per day for that time. Depending on the size of the unit and any amenities, that may be fairly competitive, when compared to similarly appointed hotel rooms.
So, Are Timeshares Ever Worth It?
While a timeshare isn’t going to be a smart buying decision for many people, there are situations where they aren’t a horrible choice. If you focus on the resale market, you can potentially acquire a timeshare at a reasonable price. Then, as long as the maintenance fees are less than what you would spend on a comparable hotel, you can possibly come out ahead.
However, if you aren’t willing to vacation at the same place, potentially during the same week, year in and year out, a timeshare might not be right for you, even if the cost is reasonable. In most cases, timeshare arrangements lack flexibility, so, if the unexpected prevents you from going, you just miss out that year.
Plus, when you buy a timeshare, you’re locked in for the long-term. Even if you don’t use the property every year, you have to pay the annual maintenance fees. Over time, maintenance fees are practically guaranteed to rise, so it is going to cost you more down the road than it does today. And, if you decide that you want to get out of that obligation, it can take a lot of time to sell.
Be Realistic
If you are considering buying a timeshare, you need to be incredibly realistic about your situation. Can you use it every year without question? Do you want to vacation in the same location over and over? Are the maintenance fees truly affordable? Can you get a similar space at a hotel without that level of commitment?
By considering those questions, you can figure out if a timeshare is worth it to you. Often, people discover that they aren’t, but everyone is different. If you understand the risks and costs and still think it’s the right move, then it’s an option on the table.
Have you bought into a timeshare and found that it was worth it? Tell us about your experience in the comments below.
Read More
- Part 1: Why Timeshares Are Bad for You
- Part 2: This Is How Much Time Share Ownership Really Costs
- Hotels vs Timeshares: Why Hotels Are the Cheaper Option
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Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
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