Why timeshares make sense

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It only takes three minutes! You can pay off debt faster than you think. Most timeshares offer exchange opportunities that allow owners to stay at other resorts if they plan well in advance.

The details can vary quite a bit, but people who are satisfied with their timeshares tend to have several things in common, says Brian Rogers, owner of Timeshare Users Group , one of the oldest forums for timeshare owners.

Unethical salespeople use that fact to imply, or even assert, that the timeshare you buy will increase in value. Later they learned they could save thousands buying directly from other timeshare owners who no longer wanted to pay their annual maintenance fees. People who simply stop paying their fees risk having the debts turned over to collection agencies, which can sue them and trash their credit.

The McCafferys prefer buying fixed-week timeshares. Since timeshares rarely maintain their value, they won't qualify for financing at most banks. If you do find a bank that agrees to finance the timeshare purchase, the interest rate is sure to be high. Alternative financing through the developer is typically available, but again, only at steep interest rates. Although owning a timeshare means you won't need to throw your money at rental accommodations each year, timeshares are by no means expense-free after the initial purchase.

A timeshare owner must also pay annual maintenance fees, which typically cover expenses for the upkeep of the property. These fees are due whether or not the owner uses the property.

You might recoup some of these ongoing expenses by renting your timeshare out during a year you don't use it if the rules governing your particular property allow it.

However, you might need to pay a portion of the rent to the rental agent, or pay additional fees such as cleaning or booking fees. Purchasing a timeshare as an investment is rarely a good idea. Since there are so many timeshares in the market, they rarely have good resale potential. Instead of appreciating, most timeshares depreciate in value once purchased.

Many can be difficult to resell at all. Instead, you must consider the value in a timeshare as an investment in future vacations. If saving or making money is your number one concern, the lack of investment potential and ongoing expenses involved with a timeshare are definite drawbacks. There are a variety of reasons why timeshares can work well as a vacation option.

If you vacation at the same resort each year for the same one- to two-week period, a timeshare might be a great way to own a property you love without the high costs of owning your own home. Timeshares can also bring the comfort of knowing just what you'll get each year, without the hassle of researching, reserving, and renting accommodations, and without the fear that your favorite place to stay won't be available.

Your time has economic value, too. Additionally, some timeshares offer perks, such as the right to use fitness rooms and hot tubs. Some even offer on-site storage, allowing you to conveniently stash equipment such as your surfboard or snowboard, thus avoiding the hassle and expense of carting them back and forth.

And, the fact that you might not use the timeshare every year doesn't mean you can't enjoy owning it. Many owners enjoy periodically loaning out their weeks to friends or relatives.

Some donate the timeshare weeks, as an auction item at a charity benefit, for example. If you don't want to vacation at the same time each year, flexible or floating dates provide a nice option. Selling Your Home. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data.

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Table of Contents Expand. Timeshare Ownership Concept. Timeshare Considerations. Words of Caution. Trading May Not Be Easy. Fees and Charges. What a Timeshare Is Not.

How to Buy a Timeshare. Look Before You Leap. Timeshare Ownership Concept Timeshares are based on the concept of fractional ownership in a property. Key Takeaways A timeshare is a form of fractional ownership in a property, typically in a resort or vacation destination. While timeshares can be an exciting and perhaps cost-effective way to travel on a regular basis, they often have both up-front and on-going costs that must be weighed.

Timeshares should not be considered investments since the vast majority of timeshare contracts lose value in the secondary market, and they do not generate income for owners. Article Sources.