Should you buy a timeshare?
A timeshare is a property with multiple owners where each owner gets to use the property as a vacation spot once a year. Sounds great, but is it worth it?
Timeshares have been one of the most highly debated real estate items for quite some time. Some believe they are a scam, and some believe they are a once-in-a-lifetime opportunity. Though most timeshare deals are indeed legitimate, there are multiple things to consider when deciding if this is the right investment for you. Here, we take a look at the pros and cons of owning a timeshare, and share what we think the final verdict should be.
The most obvious benefit of owning a timeshare is you'll get to take a guaranteed vacation every single year for life. Say goodbye to increasing hotel rates and expensive trips. Other pros of owning a timeshare include:
- You only pay for what you use. Unlike buying a vacation home where you pay year-round, a timeshare allows you to only pay for the weeks you use it.
- If you don't use it, you can rent it out. If you're not able to use it one year, you can rent it out for the week and possibly make a profit.
- Timeshares offer exchange programs. You can exchange your timeshare with another owner if you wish to visit a different place.
- It's very home-like. Timeshares are great for large families since they normally have a few bedrooms, a kitchen and a living area. They're more like a condo or apartment as opposed to a small hotel room.
Like anything in life, there are cons to timeshares, as well. Before jumping in and deciding it's the perfect type of investment, take a close look at the cons:
- High maintenance fees. If you own a timeshare, you will pay yearly maintenance fees to keep up the grounds, pay taxes, fix broken items, pay for housekeeping, and more. Typically, these fees rise 4 percent each year — which can sometimes be more than it would cost to stay at a hotel for a week.
- No spontaneous traveling. It can be very hard to swap weeks with other owners, unless you plan far enough in advance. Holiday weeks book up the quickest, followed by prime locations. This eliminates the ability to randomly pack up and take a trip.
- It's hard to sell. If you no longer wish to own your timeshare, it can be very tricky to sell, and you may even have to pay commission on the sale price. Since timeshares depreciate, you will most likely lose money on your investment.
- Large upfront costs. Typically, a timeshare will run you about $8,000 or more right away. This is a huge expense for many, and coupled with yearly maintenance fees, it may be worth it to just stay at hotels when you travel and not be tied to anything.
As you can see, there are many pros and cons to owning a timeshare. Due to the large upfront costs and lack of spontaneous traveling (those are usually the best trips!), we feel it's best to simply stay in hotels and be able to travel as you please. Hotel prices vary greatly — so if you happen to be low on money you don't have to stay at the nicest resort. After all, who you're with and the sights that you see are typically what make a trip one to remember!
Of course, the choice is yours! Readers — what do you think? Do you or would you consider owning a timeshare?