Timeshares come with the promise of pre-planned vacations in scenic areas with all the amenities. You won’t be crammed into a tiny hotel room, and instead you’ll have your own space, usually with a separate kitchen and living area.
With a timeshare you will have a guaranteed timeslot for the year, so you can plan your travel in advance and maximize your vacation days. You can purchase a property in a destination that you love, so you will be happy returning year after year. If you want to vary your destination, some timeshare contracts allow you to utilize your time at an alternate property through an exchange or points system.
Timeshares come in variety of locations, sizes, and range of amenities, but people are often attracted to the relatively low price tag in comparison to purchasing a vacation property outright. The downside is that buyers don’t always consider the true cost of owning a timeshare.
The purchase price of a timeshare property ranges from $15,000 to $30,000, but the true cost is much more than that. For this price, you purchase the ability to utilize your timeshare for a set amount of time during a predetermined week each year. It’s almost like pre-paying for your vacation accommodation. For this price you also get to take advantage of the amenities that your property offers, which vary greatly from property to property.
What this price doesn’t include is the annual maintenance fees that owners are required to pay each year. Annual fees cover any repairs, upgrades, maintenance issues, operational requirements, general upkeep, or staffing of the resort or property. While the owner doesn’t have to tackle any maintenance issues themselves, they do have to pay for it. What’s worse is that annual fees are not set or capped. The annual fee for a timeshare property will increase every year, often without notice or explanation. This means that the annual fee could amount to more than double the initial fee during your time of ownership.
Many timeshare owners are shocked when they can no longer afford the annual fees for their property. After low initial costs, they find themselves in a difficult situation when the other fees get out of hand. And the annual fees are required even if the owner does not use their property that year, making them impossible to escape.
Another factor to consider when calculating the true cost of owning a timeshare is the amount you will actually use it. Some timeshare contracts do not allow the owners to rent out the property at all, so if you don’t travel during your allocated time then you are effectively losing money for the year.
A timeshare property is not an investment opportunity. Unlike vacation properties that you own entirely, a timeshare can’t be rented for the rest of the year to generate income. Timeshare properties are only worthwhile if you plan to use them consistently, and even then you might not be saving any money.
The true cost of owning a timeshare isn’t luxurious or appealing, and it might be costing you more than you will ever benefit from it.