Are timeshares worthwhile?
- The three different types of timeshares are deeded timeshares, right-to-use timeshares, and leasehold timeshares.
- As of 2018, about 7% of US households owned a timeshare.
- An American Resort Development Association (ARDA) report stated that in 2019, “the average sales price for a one-week timeshare was $22,942.”
- The first timeshare in the US was offered in 1974 and was based in Ft. Lauderdale, FL, through the Caribbean International Corporation, which advertised a “25-year vacation license rather than ownership.”
Timeshares provide a more affordable option for those who enjoy vacationing regularly but who can’t afford to buy a vacation home. Resale options can offer significant discounts on what is already a tiny fraction of what it would cost to purchase a property. And for those years when traveling isn’t on the to-do list, timeshares can still be rented out--which means your travel plans can still be flexible without any financial loss.
Owning a timeshare is also stress-free in a way that owning a vacation property isn’t. For example, when you own a property, constant maintenance work is required, whereas this is already taken care of with a timeshare. There is no stress of vacation planning either, as the location and timing are predetermined.
Even when compared to hotels, timeshares have many advantages. Timeshares are perfect for an extended stay, whereas hotels can be expensive when each night is added up. Hotels also tend to fill up during peak travel times--especially in the most desirable locations--whereas with a timeshare, you have a guaranteed place to stay. Due to this influx of tourists, hotels often have higher prices during these summer months, while the cost is upfront and predictable with a timeshare.
Overall, timeshares offer a home-away-from-home feel without the financial burden of owning a second property. If you have a dream location that you want to travel to, and you can see yourself going there every year, buying a timeshare in that location can be the perfect solution.
Timeshares are not worthwhile because they're unwise investments that are subject to fees and assessments, and they are also inflexible. Vacationers can get more bang for their buck by renting individual properties that meet the needs of a specific travel plan.
Despite the claim of 'ownership,' contributors to a timeshare don't receive any equity in their chosen property if the accommodations or the timeshare company are sold, making for a very unwise investment. The smartest financial choice for steadily available accommodations is to purchase your own property. Another financial pitfall surrounding timeshares is that the average property doesn't offer daily room cleaning, despite 'owners' typically paying some kind of maintenance fee.
Timeshares are also subject to assessments, one of the many fees allocated to timeshare 'owners' that must be paid in order to retain 'ownership.' Assessments typically increase annually, and the timeshare company determines their frequency and necessity. These fees would be better used to invest in a vacation property or for short-term rental accommodations.
Hotels and other short-term rental properties offer considerably more flexibility. If you 'own' a week in a condominium complex, you're stuck with one destination during one time of the year. While some timeshare companies allow users to exchange their property/week, this process incurs additional fees. In all likelihood, vacationers will get a better deal and more flexibility on property size, location, and vacation dates by simply not choosing a timeshare.
Because of their lack of owners' equity, unpredictable fees, and inflexibility, timeshares are vastly inferior to other vacation accommodation choices.