If you’ve ever been on vacation in a popular destination like Orlando, Vegas or Branson you’ve likely encountered a timeshare salesperson. They’ll stand around the airport, hang out in high-traffic walking zones and sometimes even call your hotel room and entice you with a free gift in exchange for a tour of their timeshare property. Oftentimes these gifts are quite extravagant. $100 visa gift cards, free Disney tickets, free hotel nights at their resort etc. But what’s the catch?
The truth is, a timeshare sold by a resort directly is one of the worst products on the planet. That’s why resorts need to use such extravagant gifts to get you in the door. If the product was a good value, the resorts wouldn’t need to use high-pressure sales tactics and extravagant gifts to get you to buy one.
The timeshare product doesn’t even make sense. It’s hardly even a product. When you buy a timeshare, you’re basically buying the ability to vacation in a resort for 1 or 2 weeks per year. You’re not actually buying a hotel room or even a portion of a hotel room. You’re buying the ability to use the hotel room for 1 or 2 weeks per year.
You’re also buying an obligation to pay a yearly maintenance fee of about $800 per year for the rest of your life. When you die, your kids then be obligated to pay this yearly fee for the remainder of their lives as well if they let the timeshare be willed to them.
Not only that, but if you need to finance the timeshare, the resort will present you with a payment plan that includes a ridiculous 17% – 25% interest rate on top of everything else. What a deal!
When you buy a timeshare through a resort directly, it loses 50 – 90% of its value the second you purchase it. Kind of like a new car, but worse. Many timeshare owners can’t even sell their timeshare for $1 on Ebay even though they spent $20,000 on it. This is because the yearly maintenance alone makes the timeshare a poor value even when purchased at $1.
Many people buy timeshares thinking they’re an investment like traditional real estate. This is where the confusion lies. Timeshare does not ever appreciate in value. It only loses value. It is not an investment!
In some very specific situations, a timeshare can make sense. If you’ve got a large family that likes to do yearly family vacations, you can buy a large, 1-,2- or 3-bedroom timeshare on the resale market and save a lot of money over time. It’s almost always cheaper to buy one room with multiple bedrooms rather two separate rooms. The resale market is the secondary for sale by owner timeshare market. This is where you can buy a timeshare for $1 from an existing owner on sites like Ebay.
Overall, if you must buy a timeshare, do so on the resale market and only if you do not need financing to purchase one. You should never pay a 17% – 25% interest rate on anything.
If you already own a timeshare, you’d be wise to look in to one of the many timeshare exit attorneys available nowadays. Timeshare exit attorneys can be helpful if you’re unable to sell your timeshare on the resale market and your resort isn’t willing to help you cancel your contract.