While salespeople often tout timeshares as solid investments, they typically aren’t. Purchasing rights to the unit can come with a big price tag. You also have to pay maintenance fees every year. However, these aren’t the only expenses timeshare owners face. There are also hidden fees that can make the overall cost skyrocket. This leaves many consumers to wish they hadn’t made their purchase and looking for a way out. So how much is a timeshare? And what will it really cost you?
How Much Is a Timeshare?
When you buy into a timeshare, you aren’t actually purchasing the property. Instead, you pay for the right to use the unit for a specific amount of time or, as the industry calls it, an interval. Although some properties sell longer intervals, usually, an interval is one week (seven days).
In 2017, the average sale price on one interval was $22,180. However, if you finance the timeshare purchase, then you also have to contend with interest. A 10-year timeshare loan is usually set at around 14 percent. This means, for an average property, you’d pay $344 per month, or $3,400 annually, until you pay off the loan.
Annual maintenance fees are another expense owners have to contend with, and that averaged $980 for 2017. Generally, this cost goes up every year, as the property reassesses the expense on an annual basis.
However, these timeshare costs are pretty well known. On top of them, many owners also have to wrestle with a variety of fees. With many of the fees, taking owners by surprise.
Special Assessment Fees
Since timeshare owners pay maintenance fees, many assume they aren’t financially responsible for changes made to the buildings. However, some properties charge special assessment fees to complete upgrades on properties. These go above and beyond the maintenance fees.
For example, if the property wants to upgrade the building wiring to allow for faster internet speeds, they can require owners to pay more that year. Shared facility remodels, like updating a community kitchen or barbecue area, could also lead to special assessment fees.
If another company buys your property, a special assessment fee usually comes with the territory. This is especially true if profitability is an issue. Often, they will cite the need for upgrades to ensure the property meets the brand’s standards. These required upgrades leave consumers to pay up, even if they don’t agree.
In some cases, you can even end up paying for improvements at another resort. If a large parent company with multiple properties owns your property, they may spread out the improvement costs from one resort across every timeshare owner in the network. You end up paying a special assessment fee for work you don’t get to benefit from or potentially even get to see.
Repairs after a natural disaster may also financially fall on the shoulders of timeshare owners. Even if the property is insured, that doesn’t mean there aren’t additional expenses. If that occurs, properties usually issue a special assessment fee to collect the rest of the money.
Revenue Gap Fees
When other owners don’t pay what they owe, most properties work to recoup these losses elsewhere. At times, this results in a special assessment fee. However, it could also end up with another label.
Functionally, these revenue gap fees leave paying owners on the hook for the delinquency or non-payment of others. To make matters worse, even if a delinquent owner ultimately pays what they owe, you aren’t going to see a refund.
All-Inclusive Resort Fees
In an effort to make the initial cost of a timeshare look affordable, some properties use an approach that you usually see with certain hotels in areas like Las Vegas. Instead of the main price reflecting the entire cost of using the unit, they add all-inclusive resort fees in after the fact, and they can be monstrous.
For example, a property may charge an additional $150 per person per day for a stay. If a couple stays at the unit for one week, they have to pay an additional $2,100 that year for the trip. And, like most resort fees, you usually can’t get out of them as the property makes them mandatory.
Now, it’s not that you don’t get something for that money. Most all-inclusive locations provide guests with meals, beverages, and similar services in exchange for the fee. However, most couples could spend far less than $300 a day when paying for their own food and drinks. In reality, some of the cash is essentially for the convenience of not having to worry about managing such tasks.
While this approach is more prevalent in timeshare programs that have multiple properties and use floating points, it’s important to be aware of them regardless.
Contract in Perpetuity
Though contract in perpetuity isn’t technically a fee, it is a financial burden that many families don’t anticipate. If you purchase a timeshare with that phrase in the paperwork, you aren’t just obligating yourself to stick with the timeshare, but your children or spouse as well.
Even if you are the sole owner, if you sign a contract in perpetuity and pass away, a family member then becomes the timeshare owner automatically. They are then on the hook for the remaining and continuing expenses, even if they don’t want access to the unit.
Usually, their only recourse is to attempt to sell the property. Once that occurs, the new owner is responsible. However, until someone buys, your family member has to keep up with the costs or the property owner can legally come after them for the funds.
Are There Always Hidden Timeshare Fees?
Unexpected fees are common in the timeshare industry. Even if your property does not have all-inclusive resort fees or require a contract in perpetuity, special assessment fees are pretty standard. Whenever the roof needs replacing, exterior needs painting or any other upgrade or repair is necessary you are going to have to pay up.
Plus, property owners using fees to fill revenue gaps is also a fairly common practice. While those costs may masquerade as another kind of expense, don’t expect the company to take delinquency-related losses in stride. Instead, there is a decent chance they will target other owners to recoup the missing revenue in some form or fashion.
However, it’s important to note that many of these expenses are only hidden because buyers don’t review all of their paperwork. Before you sign anything, read all of the fine print. The contract outlines your responsibilities. This includes wording related to additional fees.
If you see something in the contract you don’t like, then don’t sign. Otherwise, if you do, you are legally responsible for these costs, even if you didn’t see them coming. If you have already bought your timeshare and now feel like it’s not the right decision, Call 1-888-549-4154 today. The team at Newton Group Transfers is standing by to help.
Have you encountered hidden timeshare fees? Tell us about them in the comments below.
- Part 1: Why Timeshares Are Bad for You
- This is How Much Timeshare Ownership Really Costs
- Part 3: Are Timeshares Ever Worth It?
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