What is a Timeshare? Know the Pros and Cons of Investing
A couple of weeks ago, I discussed the question, “What is a timeshare?” This time around let’s look at the pros and cons of investing in one of these properties. From time to time I hear people crowing loudly about how awesome their timeshare property is. Lately I have wondered myself whether a timeshare is a good investment for us. We love to travel, so why not? That’s what led me to start this series. The results of this miniseries and this “What is a Timeshare” instalment may be quite different than you expect!
What is a Timeshare? What are the Pros and Cons?
Last week I addressed the question, “What is a timeshare?” A timeshare is essentially a property which is owned by multiple parties. You can either be one of those owners or you can rent the right to use a portion of the property. Today, I will address the pros and cons of the “what is a timeshare” question.
There are a few benefits to timeshare ownership, and they can all be worth it to many people. Here are the pros in this “What is a Timeshare” mini-series.
- Timeshares are excellent for families who vacation during a certain time period every year. It allows a family to live in something more akin to a home rather than a hotel. The price is fixed, so there’s no worry about pricing
- In some cases, owners can exchange timeshare time blocks and accommodations with other owners across the globe.
- Over the course of a long period of time, using a timeshare rather than renting a hotel can dramatically reduce lodging costs.
- There’s a little bit less organizing to do for your vacation plans each year if you always know where you are going and you have the space booked in advance because you own that week, or couple of weeks.
If there are pros, there are also cons. This “What is a Timeshare” is aimed at giving you all the facts, both good and bad, so here is the other side of the equation.
- You pay up front for something whose value is long term, tying up your funds.
- Even if you don’t use the timeshare, you’re still responsible for taxes, closing costs, broker commissions, finance charges, maintenance fees, and assessments. Remember that, if you’re not sure you’ll use the property regularly.
- Trying to use a timeshare so that it’s worth the price can sometimes feel like a job rather than a vacation. Especially if the timing or finances are off for that year.
- As a rule, timeshares don’t appreciate in value. In fact, they Depreciate. Many times, a timeshare sells for less than half of the original price.
- A timeshare sells for half the purchase price IF you can sell it. In certain markets, selling can be difficult, to say the least.
- Scams, scams, scams. While the majority of unsavory characters have been purged from timeshares, there are still people out there who will take you for a ride if they can.
Know What You’re Getting Into
Timeshares can be a tempting purchase. That’s exactly why this “What is a Timeshare” mini-series exists. Timeshares may look great on the surface, but they are really only valuable to a specific type of buyer, and if you aren’t that buyer, they can be more trouble and expense than they’re worth. So know the answer to the question, “What is a timeshare?” Know the pros and cons. Then decide if it’s right for you.
I am a Canadian family travel blogger who often writes about health, travel, technology and money too and thought this would be of interest to some of my readers.