Up until the economic crisis, timeshares had been gaining in popularity. The industry had an all-time sales record of over $10.6 billion in 2007, and currently over 4.8 million households in the US owned one or more timeshare units (or equivalents). Yet as those numbers increased, the number of timeshare owners that want out of their timeshares also rose. Looking back, these owners wanted to provide some advice as to why they should not have purchased their timeshares. Here are five of the top reasons.
1. Prepaying For Vacations
When buying a timeshare, you’ll typically pay an upfront cost. In 2007, this upfront cost averaged over $19,000. The salespeople selling these units tell you that this cost upfront will save you money over the long run. However, only a very few use their timeshares enough to recoup this cost.
The money spent on this payment would have been better used as savings, to cover household expenses or for more legitimately profitable investments. In fact, hotels and other vacation rentals are a far better use of your vacation budget than are timeshares.
2. Problems Scheduling
The use of a timeshare usually has to be booked well ahead of time; in many cases up to two years before your visit! The owners are already paying fees and assessments to the resorts, so they unsurprisingly would prefer to continue selling more shares in the property than to actually allow owners to use their timeshares.
3. The Skewed Contracts
Many of the timeshare contracts require a long term commitment from the timeshare owner. Good marketing departments spin this fact as a long term commitment by the resort, indeed while the resort is only obligated to provide a certain level of lodging services when requested. The long-term contracts guarantee that the timeshare resorts receive an annual revenue stream for decades perhaps lifetimes. Yet, the continuous financial liability lies squarely on the timeshare owners during the same period. If they do not pay, the timeshare can place a lien on real property and even a default judgment ordering payment of past-due fees with penalties.
4. Fees and More Fees
Timeshare presentations will often bring up the rising costs of hotel accommodations. They will compare the price of a hotel room to the maintenance fees levied by the timeshare, which will favor the timeshare. What they don’t tell prospective buyers is that the maintenance fees will also increase over time. Resorts are also permitted to assess special fees in the event of “special circumstances”; these fees can cost owners thousands.
5. Difficulty to Sell
There is an increasing number of timeshare owners desperately looking to be rid of their timeshares. This has led to a glut of unwanted timeshares and a significant decrease in prices. Not only is it difficult to sell one’s timeshare, it continues to drain the finances of the owner who will continue to pay the fees until finding a buyer, if one ever materializes.
The bottom line here is that friends don’t let friends buy timeshares. These are not solid investments. Timeshares will cost you far more money that you could imagine and you will rarely, if ever be able to enjoy it! It’s much more cost effective to simply get a hotel room when you visit your favorite vacation spots.