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Are Time-Shares a Rip-Off?

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Our financial expert says no!

salesman talking to couple

Danielle Hoston: Ahhhhh ... vacation. I just spent the last week in Orlando with two close friends and their families at a beautiful time-share. Over the years, I have sat through multiple time-share presentations and happily walked out of them without spending a dime. Last year, however, I shocked myself and decided to purchase one while on vacation with my daughter.

I am sure that many of you have either purchased or have considered purchasing a time-share before. Here's what I recommend taking into account BEFORE you buy:

1. Evaluate your vacation spending. Time-shares are certainly not for everyone. Depending on your family size, employment, income, and typical vacation spending, you may be better off shopping around for vacation deals or renting someone else's time-share when you are looking to plan a vacation.
2. Don't count on appreciation. No matter what the salesman says, this is not an investment that will likely yield a cash return. In most cases, time-shares depreciate as soon as you buy them.
3. Ask a LOT of questions. Make sure you understand the package options available to you, the travel booking system, restrictions, and benefits of the time-share you are purchasing. Don't accept unclear answers, and take notes. They can provide helpful hints that will allow you to make an informed purchase choice and better vacation decisions down the road.
4. Finance as little as possible. Interest rates are incredibly high on time-shares. Put as much cash down as possible and keep your payments low. Remember to budget for annual maintenance fees, etc.
5. Consider the time-share resale market. Cash is king nowadays. There are plenty of owners who are looking to sell their time-shares for a deep discount in order to get their hands on some cash. Research the time-share that you are most interested in buying and check the availability of that time-share in the resale market.

I have to be honest. Time-shares can be a bit of a headache. They require considerable advance planning and can have unnecessarily complicated booking systems and/or point structures. Furthermore, depending on availability, you may not always get the exact location and/or week you want. While I can't stand depreciating assets and would hardly recommend purchasing them in most cases, I believe that time-shares offer a unique type of investment.

In the past year, I have been lucky enough to enjoy three timeshare-related vacations with my daughter, friends, and family.  I believe that there is no greater return you will ever have from your money than an opportunity to invest quality time with the people that you love.  If you are spending money on spending quality time, it is never a rip-off.

Do you think timeshares a rip-off?  Do you love or hate your timeshare?  Would you recommend it as a financial or emotional investment?

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9 comments so far | Post a comment now
Bill 4728 July 13, 2009, 5:04 PM

Buying a timeshare from the current owner can save you a huge amount. Many timeshares which sold from the builder for $10,000 are selling for less than $100. Timeshares which once sold for $20,000- $40,000 are now being resold for 60% -80% off.

If looking for a timeshare, be sure to look for resales and save BIG bucks.

Sherrie July 13, 2009, 7:51 PM

I must disagree. We bought a timeshare from Bluegreen Corp a few years ago and it has only been a headache. We can hardly book the times we want and maintenance fees keep going up! Buyer Beware…they are only out to get your money and all the promises never come true! Stay away from Bluegreen!

Dana Mendez July 13, 2009, 8:17 PM

If you are going to sit through a time share presentation just make sure you haggle with whoever is offering it so you get the most free stuff as possible. My dad loves to negotiate for free car and ATV rentals, bottles of tequila and even a mexican blanket while in Cabo!

Kat @ For the Love of Chaos July 14, 2009, 5:12 AM

I work for a company that specializes in getting timeshare owners out of their timeshares. The resale market is virtually non existent if you’re looking to actually make any money back on the deal (the resale market, however, is THE place to purchase if you’re set on buying one!). Timeshare contracts are perpetual, which means regardless of whether you are still using it in 20 years, you’re still going to be paying for it - the maintenance fees never end, and you’re also likely to be hit with special assessment fees along the way as well! BEWARE - vacation packages are definitely a better way to go. NEVER buy into a contract that is perpetual - BAD idea…

TUG July 15, 2009, 1:15 PM

buy resale, save thousands.

with many many more owners looking to sell, and so few buyers even realizing a resale market exists…prices for timeshares on the resale market have never, EVER been lower.

You are buying the exact same thing that someone paid full freight for from the developer!

The most important thing you could ever do, is do your research before signing a contract that will last you the rest of your life.

Salesmen thrive on making you make a decision right then and there, and will do everything in their power to convince you to do so. You cannot possibly read the entire contract and learn what you are buying in a 2 hour presentation.

Basil Ganglia July 15, 2009, 1:28 PM

Most vacation packages that I’ve seen packaged are horrible deals. If a person is interested in avoiding the unending obligation, a right-to-use timeshare (purchased resale, of course) is an excellent choice.

As the close of the right-to-use period approaches, the resale prices drop accordingly. Meanwhile the owner gets all of the other benefits of the timeshare ownership.

BTW - I own both deeded and right-to-use timeshares.

Jennie July 19, 2009, 12:40 AM

We own several timeshares. All were bought resale at a fraction of the price the original owner paid. It is best to buy one or more weeks at a place you would love to vacation at each year, or that would rent for a good price if you want to go somewhere else once in awhile. Our weeks fall into that category.

Do not buy a week to use just for exchanging (trading) because the major exchange company (RCI)has become so dishonest and corrupt that you usually won’t get any week at a place you want. RCI accepts deposit of your week and then rents it to the general public at prices so low that owners trying to rent the same week receive no “takers.”

You’d be better to just rent what you want from an owner without taking on the never-ending responsibility of paying yearly maintenance fees, exchange fees, Special Assessments, etc…

A timeshare vacation is usually a great experience, and even cheaper than renting a dinky hotel room in the area. But you don’t have to own a timeshare to benefit from the advantages of vacationing in one.

There’s a lot of great free information at the Timeshare Users Group

robert December 9, 2009, 10:20 AM

Timeshares are the worst investment ever! You must purchase the place to begin with. The ever increasing maint. fees every year wheather you use it or not.To trade you must join a trade club.Now get this. You have to pay a trade fee to exchange after all ready paying to be in the club! Now, they have added laundry fees, parking fees, etc. Whach out for the special asscessments, all the above with NO owner input !!!!!!! You will pay! The best thing to do is RENT from the timeshare place. They will take something for an unused room. You can also bargin with them and get it dirt cheap. Forget ever sellin your place. People can’t even give them away. You can buy them on ebay for one dollar.
Never buy, RENT and just walk away, no fees!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

xrumer forum December 29, 2010, 6:40 PM

I was unable to use the contact form to message you. Is there another way to get in touch with you?

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