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Are Timeshares Worth It? Pros And Cons To Consider

September 15, 2023 5-minute read

Author: Victoria Araj

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When considering a timeshare, it’s essential to ask yourself whether this kind of financial commitment is worth it for you. Timeshares – which tend to have a shaky reputation – are a unique way to secure a vacation every year in the same location, but there’s more to think about with a timeshare than just locking down a nice place to get away.

Let’s review the facts about timeshares, explore whether owning a timeshare is worth it and look at the advantages and disadvantages that come with this type of property arrangement.

Timeshare Properties: A Brief Overview

A timeshare is a vacation real estate property shared by multiple owners. All of the owners pay for a portion of the timeshare, meaning they each own a fractional share of the property. Timeshare owners will then follow a schedule that allows them all to take turns vacationing in the home every year.

Timeshares are located in various places, but a large majority of them are found near beaches in sunny destinations like Florida and other tropical areas. Some of the most popular timeshare spots will inevitably be where the real estate market is the hottest for vacationing.

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Are Timeshares A Good Investment?

Whether a timeshare property is a good investment is a personal decision, but it’s important to fully understand how this kind of property works. The process of buying a timeshare differs from how you typically buy a house, in that a timeshare purchase transaction usually happens after a sales presentation or on the secondary market.

You might be surprised to learn that timeshare properties aren’t considered investment properties. In fact, they usually decrease in value with time. This is why a timeshare might not be ideal for a buyer looking to eventually make money from selling a property. Now, let’s more closely examine some common advantages and disadvantages of timeshare ownership.

Advantages Of A Timeshare

Here are some pros to consider with a timeshare

You’ll Have More Amenities

Since timeshares tend to have a more resort-like feel to them, they’ll also have various amenities available for owners to use. These often include guest services, pools, fitness and wellness centers, and areas for sports recreation. However, not every timeshare property offers the same amenities, so if any of the amenities mentioned here are of high importance to you, be sure to do your research on what amenities come with your specific timeshare.

Timeshares Require Little Maintenance

One big advantage of timeshares is that they’re usually pretty-low maintenance. Since you’re paying the timeshare company, the company will handle various household duties and other necessary maintenance. This allows you to spend your time actually enjoying the property instead of trying to catch up on household tasks and doing chores.

Keep in mind that you’ll pay the timeshare company maintenance fees for your property to be taken care of. These fees will remain your responsibility as long as you’re a paying partial owner of the property.

Timeshares Have Adequate Space 

With timeshare properties typically being meant for vacationing, they usually provide ample space for family members and friends to gather for a fun, long getaway. A timeshare can be any size or kind of home, such as a single-family home, a condo or an apartment. While timeshare sizes vary, most have plenty of room for a family to vacation comfortably.

You’re Guaranteed A Vacation

Another advantage of having a timeshare is knowing you have a place to go with your family on vacation every year. Being consistent in where you take vacations lets you get to know the surrounding area and makes you privy to the best places to shop, eat, play games, etc. There’s a sense of relief in knowing you don’t have to spend time thinking about where you’re going to take an annual vacation.

Disadvantages Of A Timeshare

Here are some downsides to consider with a timeshare

Canceling Can Be Hard

Trying to cancel your timeshare and get rid of it isn’t the easiest of tasks. That’s because timeshare companies often make it hard to escape ownership in this kind of property. You’ll most often need to meet with a timeshare exit company to figure out how to bow out of your contract, but – depending on your situation – you might have the option to return your timeshare to the company you bought it from or give it to someone else if all else fails. Many of the options available to you can be inconvenient and take up a lot of your time.

Upfront Costs And Other Fees Are Involved

Several costs and fees are associated with a timeshare property. There’s usually a large upfront cost, so the only way to make a timeshare worth the money is to keep and use the property for as long as possible. Other fees include an annual maintenance fee, which can be costly.

It’s important to read over your timeshare contract carefully to make sure you fully understand the upfront costs and fees you’re responsible for paying. The amount you’ll pay in each fee will vary with the timeshare company and the kind of timeshare you’re committing to.

Timeshares Decrease In Value

Unlike vacation homes, a timeshare doesn’t typically increase in value over time. Instead, it’s more likely to decrease in value since it’s considered an illiquid asset, which means the timeshare owner can’t quickly get cash for the value of the property. A checking or savings account, on the other hand, would be considered a liquid asset since you could easily extract cash if needed – but that’s not how it works with timeshares. 

You Might Get Scammed

Unfortunately, working with a timeshare company carries some risk since there’s a possibility the company could be a scammer. Let’s say, for example, that the timeshare property doesn’t exist or looks different from how it was originally advertised to the interested buyer. Timeshare salespeople can be very persistent in their attempts to make a sale that works in their favor.

Since buying a timeshare is such a big financial commitment, staying vigilant and trusting your gut is important if you engage with a timeshare company. Be on the lookout for anything that feels strange or suspicious.

The Pros And Cons Of Timeshares: At A Glance

Pros

Cons

More amenities

Difficulty canceling

Low maintenance

Upfront costs and other fees

Adequate space

A decrease in value

A guaranteed vacation

The potential to be scammed

Should You Buy A Timeshare Or A Vacation House?

As discussed above, whether to invest in a timeshare is a big financial decision with pros and cons – so does it make more sense to buy a vacation home instead? When you buy a vacation home, you have the opportunity to make a profit since you own the property and it’ll most likely increase in value. This would put money back in your pocket and make it easier to sell and get rid of if you no longer wish to own the vacation home.

With a timeshare, you’re only a partial owner so selling isn’t as straightforward or as lucrative. With no opportunity to build equity in a timeshare property, you’re at a fairly significant disadvantage – especially if you’re going to be paying every year for quite some time to maintain your ownership stake in the property. Your contract will state the amount of time you’re designated to be an owner of the timeshare. For example, shared deeded ownership of a timeshare means you own the property for life unless you’re able to sell it at some point – which, again, could prove difficult. Selling a vacation home, on the other hand, is often easier and will typically generate a profit if you’ve built any equity in the house.

Carefully weigh your options, including your long-term goals and financial situation, to determine whether a timeshare or a vacation home is better for you and your needs.

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The Bottom Line

Timeshares aren’t your average vacation property. There are many pros and cons to be aware of as the part-time owner of a timeshare. Whether a timeshare is worth it for you depends on the kind of vacation property you’re looking for. While a timeshare is usually low-maintenance and filled with amenities, it’s also a long commitment that can be expensive and tough to get out of. It’s best to carefully consider the decision to buy a timeshare before signing on the dotted line.

If you think timeshare ownership isn’t right for you and are interested in buying a vacation home, get started on the mortgage process today.

Victoria Araj

Victoria Araj is a Section Editor for Rocket Mortgage and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.