Timeshares are marketed as a great way to go on a luxury vacation every year. During the sales pitch, you’re told about the high-end property overlooking breathtaking views that can be yours for one week a year. You’re promised access to the type of dream vacation that may be out of your financial reach without the help of timeshare ownership.
If all of this sounds too good to be true, it’s because usually it is.
While it’s possible to enjoy a lifetime of amazing vacations with a timeshare, many more owners experience a lifetime of frustration. This is largely due to the fact that there are many economic risks associated with owning a timeshare that are never disclosed during the sales process. Unfortunately, most people only find out about these risks after closing the deal.
During the sales pitch, you’ll hear about the ways in which your purchase is a great investment. You’ll also hear about the ways it allows you to make a luxury vacation more affordable. Unfortunately, these claims aren’t entirely accurate. There a variety of financial risks which make a timeshare a poor investment.
Expensive Purchase Price: According to the American Resort Development Association (ARDA), the average sale price for a one-week timeshare in the United States is $22,180. This is an upfront cost before you ever use the property. Most people end up securing a loan with the timeshare company to finance the purchase price. In many instances, the interest rate of these loans is significantly higher than interest rates for a typical home mortgage. When you factor in all the interest you pay, the cost of your timeshare becomes even more expensive.
Costly Additional Fees: The purchase price isn’t the only cost associated with your timeshare. You’ll also have to pay annual maintenance fees, regardless of whether you use your allotted time each year. According to ARDA, the average annual timeshare maintenance fee is $980. And, on average, these maintenance fees rise 4% annually. Depending on the terms of your contract, you may also have to pay a transfer fee to use a property at a different location or to change the week you’re entitled to access the unit.
If any major repairs are required, or the resort shuts down for an extended amount of time, you may be charged for a portion of the repairs in the form of special assessments.
In some instances, you may also be required to pay property taxes on your timeshare. These fees can add up quickly, making your timeshare a very costly annual expense for your budget.
Poor Financial Investment: It’s important to understand that your timeshare isn’t an investment. It won’t increase in value over time or provide you with a way to earn money.
It’s more like a car in this regard. Most timeshares depreciate over time, largely due to the huge resale market. There just isn’t much demand for timeshares, especially compared to the supply.
In addition, you don’t own the property outright. You only have access to it during your allotted week. You own a 1/52 portion of a property with little to no inherent value. In essence, you’re making significant monetary expenditure without any realistic expectation of a financial return down the road.
Poor Resale Ability: Due to the oversaturated resale market and the desire among people purchasing timeshares to buy a new one, many owners find it very challenging to sell their timeshare, even for significantly less than what they paid for it. A quick search on an online marketplace like eBay will bring up pages and pages of timeshares for a dollar or less.
No Tax Advantage: The IRS doesn’t allow you to claim a capital loss on your income taxes when you lose money selling your timeshare. As a result, there is no tax benefit even if you lose money.
Due to all of the financial risks, we believe a timeshare is not a smart purchase, and we recommend that you explore other options to enjoy your vacation time. However, we understand that many people are taken advantage of the persuasive sales pitches they receive. If you’ve found that the financial headaches associated with your timeshare are no longer worthwhile, Timeshare Termination Team can help.
Getting out of an unwanted timeshare isn’t easy, and every situation is unique. At Timeshare Termination Team, we’re committed to helping you navigate this complex process and gain freedom from this financial burden. We’re the only timeshare consumer advocacy company in the United States providing a You First Approach™, guaranteed to permanently get you out of your timeshare. Our unique approach includes:
If you’ve decided that your timeshare is no longer for you, we can help. Timeshare Termination Team is dedicated to helping you safely, legally and permanently get out of your timeshare commitment. Contact us today to schedule a free consultation.
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