Is Timeshare a Good Investment?

A timeshare is many things, but a financial investment it is not. Timeshares purchased directly through resort developers like Westgate, Bluegreen and Hilton usually lose about 50% of their value the second they are purchased. With the average timeshare costing about $20,000, that’s a massive loss to take on as an “investment” before you even walk out the door.

In addition to the initial purchase price of the timeshare, you will also need to pay yearly maintenance fees that average about $800. These fees are used to update the resort and keep it looking new. Sometimes these fees are raised by a certain percentage each year as well.

Purchasing a timeshare through a resort developer directly is similar to purchasing a new car. It loses value instantly. The confusion with timeshare being an investment comes from the age-old thought that real-estate increases in value over time. Timeshare is not real estate though. It is a piece of vacation time at a resort every year or every other year for one or two weeks.

So then, why would anyone buy a timeshare? That’s a great question, and the answer has nothing to do with thinking timeshare is a financial investment. Timeshare is a commitment to vacations. Vacations are investments in your well-being. They lower stress and create priceless memories for you and your family. Aside from a commitment to vacations, timeshares purchased on the secondary resale market from existing owners can be a good value.

A timeshare resale is the pretty much the same thing as a timeshare purchased through a resort developer, but without the inflated cost. Resort developers must pay for things like sales staff and free gifts to sell their timeshares. Existing timeshare owners do not have this overhead, so they can offer their timeshare for sale at a significantly discounted price.

Timeshares become a good value when you buy resale and vacation with a group or family. Most timeshares are larger than typical hotel rooms and have private bedrooms and kitchens, so it can be more cost effective to vacation to a spacious timeshare resale with two bedrooms rather than two separate rooms at the same resort. The kitchen also allows you to cook a few meals in to save on dining out costs.

A timeshare can also make sense if your family likes to vacation to the same spot each year as a family reunion sort of thing. You’ll get good use out of it and won’t need to pay exchange fees to services like RCI and II. These services allow timeshare owners to exchange their timeshare for a different timeshare somewhere else in the world for a fee. There are free exchange services such as DAE, but these don’t have as big of a selection as RCI and II.

Lastly, if you live near a beach you may want to purchase a resale timeshare just for the year-round amenities. Some timeshare resorts located on the beach allow their timeshare owners to use their parking lots and pools any time of the year even if it’s not that owners designated timeshare week. If you find a small, low-key resort, you may be able to get this perk for the cost of a cheap initial purchase price and a small $500 per year maintenance fee. The free parking alone can make this worthwhile.

To recap, don’t go in to a timeshare purchase thinking it’s going to increase in value down the road. It won’t. Do you research, buy resale and shop around. Some timeshare owners just want their maintenance fees to stop and are willing to give away their timeshares for next to nothing to do so. Find these owners and you’ll be taking cheaper, more luxurious vacations in no time.

Photo Source