Buying a timeshare: Is it right for you?


It’s easy to understand why the idea of owning a timeshare is enticing to many. Imagine having a place of your own for a few days, a desirable location that feels a million miles from home.

Winter has arrived and if an annual escape to a luxurious villa on the beach or a well-appointed cabin atop the slopes is appealing, perhaps a timeshare is something to consider.

It’s an alluring concept and a business that continues to boom—per the ARDA International Foundation, sales volume in the U.S. timeshare industry increased by nearly 9% from $7.9 billion in 2014 to $8.6 billion in 2015.

But is buying a timeshare right for you? Timeshares, which involve several joint owners with the right to use a property as a vacation home, come with several pros and cons you should consider before purchasing.

Pros of owning a timeshare

  • Financial savings: One of the biggest selling points of a timeshare is that you will receive a discounted rate. This could mean an opportunity to enjoy an expensive hotel or resort at an affordable price.
  • Maximizing value: Whereas vacation homes may sit empty for most of the year unless you make other arrangements, with timeshares you only pay for what you use.
  • Predictability: If you’re a creature of habit, you’ll be glad to know the most commonly sold timeshare unit is a fixed-week ownership. In this instance, you have the right to use the property the same week each year.

Cons of owning a timeshare

  • Hidden costs: It’s not uncommon for a timeshare’s annual maintenance fee and property taxes to total several hundred dollars. You may also be on the hook for utilities and special assessments.
  • Difficult to sell: History has shown that selling timeshares is incredibly challenging. And, if you sell your timeshare at a loss, IRS rules in most cases prohibit you from claiming a capital loss as you would with other property.
  • Long-term commitment: Once you buy a timeshare, it could be yours indefinitely as not all of them include an expiration date. Read the fine print carefully or run the risk of paying endless annual maintenance fees.

Is it worth it?

Perhaps the best question to ask yourself when considering a timeshare is whether it makes sense for your lifestyle. Timeshares should not be purchased as a money-making investment. Rather, focus on your vacation history and preferences, as well as doing what you can to anticipate future desires.

If you decide a timeshare is right for you, negotiate the price to see if you can get a better deal. But stay away from buying a timeshare if it’s an emotional or impulsive decision. Make sure it’s well thought out, even if a complimentary meal, round of golf or day at the spa is dangled. It’s a decision that could affect you, for better or for worse, for many years to come.

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