Timeshares are vacation properties that several people share partial ownership of – usually over a time span of about 25 years. They’re typically located in exotic locations that are popular tourist destinations.
Starting in Europe in the 1960s, the concept of timeshares spread quickly to the United States. They became a huge trend with seasonal vacationers who liked the idea of “owning” property in an exotic area for a fraction of the price.
Today, timeshares are generally sold through high-pressure sales presentations that present them as a more financially responsible way to vacation.
COVID has decimated the timeshare industry for obvious reasons. Still, you know they are eventually going to come back and get people. In case you’re thinking about purchasing a timeshare now or in the future, here are some things you should know before you sign.
1. In addition to the purchase price, timeshare ownership requires costly maintenance and other hidden fees.
During a timeshare presentation, the salesperson will show you comparison pricing between taking a traditional vacation versus owning a timeshare. Without taking into account yearly fees (which can usually be added without warning, per the purchase agreement), the numbers may seem to favor timeshare ownership.
But, just because you only use the property for a few weeks a year doesn’t mean you’re not jointly responsible for the property’s maintenance, including any renovations, repairs, utilities, and other hidden fees associated with property ownership. Timeshares are usually located in areas with high costs of living, so maintenance fees may run higher than average.
2. Transferring your timeshare to different properties isn’t always easy or cost-effective.
One selling point for timeshares is that if you get bored with vacationing in one spot every year, you can transfer your timeshare within the resort company’s network of other locations. This may seem appealing at first, but transferring to other locations isn’t as easy as it sounds.
You may have limited choices based on the times of year you want to vacation and the terms of your contract. It also may be difficult to find openings at your desired location, and, at the very least, it will be a greater hassle and expense than you’re prepared for.
3. Timeshares aren’t wise investments.
A good investment is one you can get more out of than you put in. The property values of timeshares decrease rapidly, and you’re seldom able to sell a timeshare for a profit. Contrary to the selling point that a timeshare will “pay for itself,” you can end up spending more in the long run than you would have by taking traditional vacations.
4. Timeshares are difficult, if not impossible, to sell.
The timeshare property market is highly saturated. Since they’re not in demand, timeshares are difficult to sell unless you’re willing to take a loss. Enough people have had bad experiences with timeshare purchases that they’re not interested in ever purchasing one again.
While unable to sell, you’re still responsible for paying maintenance fees. Timeshare companies themselves are rarely willing to buy back your timeshare since they’ll be losing income. If you’re stuck with a timeshare, your best option is to try to rent it out to cover your costs until you’re able to sell.
While appealing at first glance, timeshares aren’t a wise financial or lifestyle choice for most people. You’ll be better off carefully saving for and planning a vacation you can pay for outright. So, the next time you’re sucked into a timeshare presentation, remember these points and keep yourself from getting tied into a potential money pit.
How Do You Sell a Timeshare If That’s What You Want to Do?
Some people reading this piece already bought a timeshare so there’s no point telling them why they shouldn’t get one in the first place. At the end of the day, timeshares aren’t for everyone. If you’re one of those fast-talked into buying a timeshare as a cheaper way to vacation only to later discover that it was (and continues to be) a wasted investment, you’re probably desperate to get rid of it.
Unfortunately, selling a timeshare is quite difficult. Many people either can’t sell theirs or have to take a substantial loss on their original investment. The pandemic has only magnified the difficulty to sell timeshares because no one is really thinking of committing to vacationing these days.
Then there’s the major problem of saturation of the market. Those who are actually looking to buy a timeshare have plenty of new properties and exciting locations to choose from, so unless you’re offering a great deal (aka, a loss), they’re not as likely to bite.
So what do you do? Here are some tips gleaned from those who’ve been through this frustrating experience.
1. See what your timeshare company can do for you
Although timeshare companies won’t directly buy back your timeshare, many offer resale programs in which they’ll act as the broker. Of course, they might not be willing to give you a good deal, but they’re more likely to sell it than you are. Find out what kind of deal they can offer you, and keep it in mind as a last resort.
2. Advertise in many locations.
Because the market for timeshares isn’t hopping, you’re going to have to put more effort into advertising yours. Selling your own timeshare may mean more profit in the end, but more hassle in the process. Consider what market would be most interested in your timeshare, and cater to them.
Don’t just advertise in one location, however. Advertise in the newspaper, on the Internet, through timeshare magazines, and of course, via word of mouth. Advertise both in the area your timeshare is located, and in regions that might be interested in vacationing there.
3. Consider an online auction.
Online auction sites, such as Ebay, allow you to advertise timeshares for a fee of $70. This is cheaper than any brokerage fee. Do your homework, see how much similar properties have sold for recently and set your price realistically.
If you don’t set a reserve, your posting is more likely to draw attention and proactive bidding. Don’t forget to include good photos; people want to see what they’re buying.
4. Hire a broker.
Although hiring a broker will leave you less profit than selling it yourself, you may have to resort to this if you’re not getting any bites. Look for a “fee-based on sale” broker, who will be more motivated to sell quickly. If you go with a broker, make sure they’re approved by the BBB. There are many timeshare resale scams out there that could rob you of even more of your hard-earned money.
Keep in mind that the average minimum brokerage fee is $1,000. So, if your property value and expected profit aren’t even that much, don’t bother with a broker.
5. Be prepared to take at least a small loss.
Unless your timeshare is in an area where property values are rising and timeshares are highly desirable, you’re probably not going to get what you paid for it. Be prepared to take a loss, but utilize these tips to keep that loss to a minimum and be released from your timeshare as quickly and easily as possible.
Have you ever tried to sell a timeshare? What’s your experience with timeshares been like? Positive or negative?
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I think they are an awful idea. But I do have to say one of my more intelligent and money savvy millionaire friends has had one for decades and they love it. I’m not sure why his experience is so positive while so many people have had timeshares turn into albatrosses around their necks.
His experience is so positive BECAUSE HE”S A MILLIONAIRE. When you dont have to worry about cost, Timeshares arent so bad…especially if its in a really nice area. For the average schmo, they are a horrible investment.
We have a property share, not the same thing as a timeshare at all. Google ”property share” for details of the companies out there.
We have been more than happy with our choice and have had some fantastic holidays in different parts of the world. We have consistently saved money on tour operators prices and stayed in better quality accommodation.
We look forward to more frequent holidays in the future now that we are not restricted to school holidays. It is based on a points system and more points are needed during school holidays and less points at other times, less points used each time means more holidays. Also you only pay a charge (called a user charge) if you actually book a property, no holidays = no charges.
Definitely a winner for us.
No one in their right mind buys a timeshare as an investment.
I bought into the timeshare at Disney as a way to force me to take vacation…The points are use it or lose it. There is sufficient flexibility in the points system to allow for a varied vacation experience across the years. Over time I will save money compared to what i would have spent at those resorts if i had paid cash( An artificial and unfair comparison, BTW). I spent 20 years coming up with excuses why NEXT year was a better year to take that BIG vacation. I violated the fundamental rule: Pay Yourself FIRST!
NOW, We plan our vacation several years in advance in order to take advantage of all that time share have to offer.
The Investment is in yourself and your family…..and I am Liking the ROI!
Unfortunately, many timeshare companies are not serious, there are some serious including the 3 major known timeshare companies and they are Sheraton, Hilton and Marriott. It’s cheaper and nicer to book new holidays today and various parts of the world without timeshare.
Timeshares are generally poor investments but can be useful for vacations if you play the game properly.
I wouldn’t like the idea to be ‘restricted’ to a vacation spot only. If I’d get a timeshare, we’d vacation there only, so that we don’t feel like we have wasted our money. We like to travel a lot and also see different places. Even 1 month abroad cannot be that expensive, if you know how to find an affordable location and plan accordingly.
I really like the idea of a timeshare, but it never seems to work out how you expect. I purchased one that i assumed i would use quite a bit, but me and my family rarely if ever use it. It is absolutely a waste of money for me. But i did learn a good lesson out of it.
Timeshare fraud has been around since the timeshare idea was created, but they increase during poor economy. When times are difficult, timeshare owners are stuck with properties they can´t travel to or even afford. Desperate to recoup some money to pay for bills, they can easily become victims to scams artists pretending to be their timeshare salvation who will take upfront fees -as much as five number figures in some cases- but fail to fulfill their promise.
I would never buy one. They don’t seem like a good investment at all.