Owning a timeshare may sound great. You get to indulge in an annual vacation to a familiar place, or a familiar chain of resorts, without the hassle of planning it. The morality and cost efficiency of timeshare arrangements has been called into question over the years. The worth of a timeshare is also very low in reselling, although they are frequently marketed as an investment opportunity. It makes a lot of timeshare owners wonder, is a timeshare worth it?

Some people see timeshares as the deal of a lifetime. You get to own a piece of a luxurious resort, and you never have to worry about paying for a hotel on your annual vacation again. 

Other people see it as a shady business deal that takes advantage of the elderly and the impressionable. 

Regardless of where you stand on timeshares, this article will break it all down for you. 

What Exactly is a Timeshare?

A timeshare is a vacation property, available for purchase at many resorts, that lets you share the property cost with other timeshare owners. You do this in exchange for allotted time at the resort. 

For example, you purchase one week at a timeshare. Fifty one other timeshare owners will purchase the fifty one other weeks of a year. 

However, this is not the only arrangement. Some people purchase four weeks a year at a timeshare, so they can stay for a month. Other people may purchase one week every other year, so they have more flexibility during their off years. 

Types of Timeshare Ownership 

Fixed Week Option

With a fixed week timeshare, the owner can select one week out of the year that they would like to stay in their timeshare. 

For example: A family decides to stay in their timeshare in the middle of August, as a relaxing vacation before the kids go back to school. 

The biggest downfall with a fixed week timeshare is that if, for whatever reason, the timeshare owner cannot stay in their timeshare that week, they are out of luck. 

More often than not, all of the desirable weeks will be booked up. If the resort does allow the timeshare owner to switch their stay to a different week, they will likely be subject to hefty fees to accommodate that. 

Floating Week Option

A floating week timeshare allows you to book from a selection of weeks, typically spanning over a few months. However, there are certain limitations to this. 

The offer would sound something like this: “You can book your beach timeshare any time between May and July, except for the week of Memorial Day.” 

A huge con to a floating week timeshare is that all of the reservations have to be made within a certain period of time. 

Most timeshare resorts operate on a first come, first serve basis. If you are unable to book your desired week before another timeshare owner picks it, you may be stuck booking a week you can’t attend. 

Points System

A points system is the newest way some resorts are choosing to operate. It is also the most complex of the three timeshare ownership options. 

With a points system, a resort offers several timeshare in varying locations. Each timeshare is worth a certain amount of points, which a buyer will purchase. They will then redeem those points annually.

Buyers must beware with this option, because some timeshares are worth much more in points than others are. Due to this, redeeming timeshare weeks in desirables locations may be difficult.

Once potential owners have weighed the pros and cons of each timeshare options, they will choose one. If you’re content with staying in the same vacation spot on the same dates every year, a fixed week timeshare would work fine. If you prefer to have flexible dates but the same location, a floating week timeshare would be the right option. Lastly, if you would like flexibility in both dates and location, a resort that offers a point system would suit you. 

All three systems come with a lot of cons.  

The Financial Worth of a Timeshare

How much would you be willing to pay for a week-long vacation to the same resort once a year?

Would you be willing to pay $15,000 to $20,000 with 10% interest and annual fees of about $1,000? Not to mention, timeshare resort developers will also tack on extra fees. These are often called transfer fees, and they are fees that owners have to pay in the event that the resort is sold. Additionally, if any upgrades are made on the property, timeshare owners will be charged a fee for that as well. 

Another huge hidden cost is travel fees. For example, a person purchases a timeshare on a beautiful property in Mexico. The lodging is covered for the one week a year when they can stay in their timeshare, but the traveler still has to pay for any plane tickets, meals, and any excursions they decide to go on during their vacation. 

When considering purchasing a timeshare, you need to consider its worth. If none of this sounds reasonable, then owning a timeshare is probably not the right choice for you. 

Sellers of timeshares will tell potential clients that purchasing a timeshare is the cheapest, least stressful way to vacation. The fact of the matter is, that’s just not true. 

Timeshare Pitches

A timeshare pitch will look something like the following: 

• The resort will lure you into a sales pitch with a free dinner, tickets to an event, or some other perk. 
• A lengthy sales presentation will be conducted. A lot of people have called into question the morality of these sales pitches, and have claimed false advertisement. 
• If you can’t afford a timeshare upfront, the developer may offer you a loan. Typically, the loan has a very high interest rate. 

After the initial payment, there are hidden maintenance fees that average around $1,000 annually. The ARDA estimates that the maintenance fees increase about 5% per year. 

Timeshare Worth in Resale 

So, you bought a timeshare and you decided it’s not for you. You surpassed the rescission period and your next option is to sell your timeshare. No big deal, right?

The fact of the matter is, it’s very difficult to find someone who is willing to buy a timeshare. Even if a timeshare owner does find a buyer, it is highly unlikely that they will be making any money in the deal. 

Timeshares have been marketed as an investment opportunity in the past. Recently, more people have found that there is no opportunity for growing an investment when you purchase a timeshare. Some states, like Florida, have actually considered passing a law that makes it illegal to mention the phrase “investment opportunity” in a timeshare sales pitch. 

So, why exactly do timeshare lose so much of their value?

First, look at the standard selling market. The timeshare market is very saturated by sellers.

Some people go their whole adult lives owning timeshares without regretting it. If you have the same vacation patterns, and you don’t mind the fees, you can successfully own a timeshare. That being said, they’re almost impossible to resell without losing all of the money you put down for it.

Things to Consider in Timeshare Worth

The shoddy sales practices are not the only thing that need to be taken into consideration. When it comes to timeshares, here are a few other things you need to look at before making a decision:

The resort quality and destination

Timeshare Quality and Resort Destination

There are thousands of timeshares available for purchase in vacation destinations, such as Florida, California, and Colorado. Along with real resorts selling timeshares, there are a ton of timeshare scams, as well. 

In some cases, people have purchased timeshares just to arrive and have it be much less luxurious than what was advertised. In other cases, the resort just doesn’t exist. 

Potential buyers need to take into consideration the reviews, quality, room size, and included amenities. Everything discussed during timeshare pitches needs to be taken with a grain of salt. 

The destination of the resort is just as important as the resort quality. Depending on the popularity of the city, or even the country, it will largely determine the financial worth of the timeshare. 

If the timeshare is international, the country’s currency is another issue. Value is something that will differ depending on country.

Timeshare Week

As mentioned earlier, booking a timeshare for a week that works for you may be difficult. The more popular resorts tend to book up quickly. Many of these resorts suggest booking as soon as possible after the new year, so you have more of a chance of getting a week that works for you. 

School holidays and seasons determine when the ‘high seasons’ are. If a timeshare owner fails to book their week quickly, they may be out of luck. For example, it could result in an owner being forced to take a beach vacation in the winter. Or, even worse, they could not be able to utilize their timeshare at all that year. 

Add-Ons and Maintenance

When it comes to exchanging your timeshare week with other owners, you may be subject to fees from the resort. 

Another cost that is typically overlooked by sellers and buyers in timeshare pitches is the maintenance fees. Whether you use the timeshare or not, these fees increase substantially every year. 

In Conclusion… Is a Timeshare Worth it?

The morality of timeshare sellers, as well as the financial efficiency of purchasing one, has been called into question.

Potential timeshare owners often end up being taken advantage of by the selling resort. This could be due to many things, including low flexibility in booking, hidden fees, or false advertisement. There are a lot of cons to purchasing a timeshare. 

Many timeshare owners realize over time that the more practical, and even the more financially responsible, option is to book vacations on a year-to-year basis.