Timeshares are “one of the biggest scams on the market today and a financial black hole.” We didn’t write those words; in fact, this is the point of view of financial expert, Dave Ramsey. It is very costly to buy a timeshare. Many people prefer to rent a vacation place as it is usually less expensive and gives you the freedom to choose where you want to travel. In addition to the initial expense, timeshares continue to cost monthly with maintenance fees that generally increase each year, compounding the overall expense of a timeshare over time.
Almost 75% of timeshares are sold to people who actually can’t afford them. They are sold using high-pressure tactics. Many times, people feel so much pressure to buy that they give in just to get out of the salesperson’s office. People are baited to come in with large prizes and or free excursions to come in for a “quick presentation”. They end up being stuck for hours until they sign up.
Basic Primer on Timeshares:
Timeshares offer a fractional ownership share of the vacation destination or property in a resort as it is a real estate initiative. It means that you are an owner of a vacation property for a particular time. Generally, the specific time of ownership is weekly, but you can also buy monthly rights. It means that a single timeshare can be co-owned by 51 different owners.
Why buying a timeshare is a bad idea
1. Annual Timeshare Fees must be paid.
You will pay a lot of money year-to-year to cover ancillary timeshare fees. These fees include all the charges for repairs, cleaning, paperwork, etc. You will probably pay for many other fees as well, depending on the timeshare contract you sign. While buying a timeshare, it is essential to read the contract.
2. For a Once-a-week vacation, it’s an expensive investment
When you consider the cost, it is a significant personal investment. The average price lies between $16,000 to $20,000. But this is the lowest and basic package. If you want to go for more luxurious accommodations, you have to pay even more. You should practically think about why you would spend so much money for a property that you’re going to use just for a week in the entire year.
Think about it…You can buy a basic house at this cost and live in the house for 365 days, and you’ll not regret buying it. Also, the timeshare investment is just the beginning of timeshare expenses; many more costs will come up for repairs and property maintenance. 5.
3. Annual Travel Cost Driving to Your Timeshare
When it comes to the location of your timeshare property, it is often located far from your home. Don’t forget to factor in the extra costs of driving or flying to visit your timeshare annually.
4. Taxes of Timeshare Property
According to the property tax laws of your state of residence, you’ll have to pay property taxes on a timeshare. Moreover, you will also have to pay tax for the state where the timeshare property is located.
5. Floating Timelines
The concept of floating timelines makes timeshare a lousy deal. If you know the difference between floating timelines and fixed weeks, you can understand the idea better. With a floating timeline, you have to negotiate with the other 51 owners for your week of stay at the property. What if one of the other owners wants to stay the same week? What’s the point of owning such a timeshare if you can’t stay there when you like?
6. You Own a Timeshare for Decades
The time limit of timeshare contracts can be for 20 years, 90 years, or a lifetime. You should consider that. Why do you want to own a property which you can only use one week every year for your entire life? In reality, your vacation destination preferences may change over time. You probably don’t want to go on the same vacation every year.
Another little-known fact of timeshare ownership is that if you own a timeshare and die, your heirs will have to pay the ownership expenses until the contract ends. Instead of passing some asset, you are giving your next generation a liability.
7. When you buy a timeshare, it loses value
Timeshare is a personal financial investment. But not a wise one. The value of your timeshare will not increase. Some aggressive salespeople pitch you a timeshare as a great investment. In reality, they have no resale value, so they are not a smart investment at all.
If you want to sell a timeshare, who do you think is okay with sharing ownership with 51 other people? You will be extremely frustrated when you find out how difficult it is to sell your timeshare.
8. You are not really the owner of the timeshare
When you think about reasons why not to buy a timeshare, owning is a relative term. You lease a timeshare. The person who sold it to you will always remain the actual owner. You can pass ownership and sell timeshare according to the contract you signed. But cannot do anything more than that. Would you still consider buying such property which you’ll never own?
And read your contract carefully. Most state that timeshare fees are non-transferrable. Even if you are able to sell your timeshare, if the new owner defaults on the annual fees, you are still responsible for paying them for the duration of the contract.
9. You buy a timeshare under pressure
Salespeople will trick you into buying a timeshare with the help of luxury tour packages, seminars, and high-pressure sales presentations. In this type of environment, you don’t have the time to weigh the pros and cons. Perhaps a bad experience on one of your previous vacations led you to buy it, and you signed. Think about it: how can an investment be good if it is done under pressure?
How do I get out of my timeshare contract?
As you can see, there are numerous reasons why buying a timeshare is a bad idea. Consider carefully before throwing your money into this black hole. But what if you are already stuck in a timeshare contract and you want to get out of it? Titan Exit Group specializes in timeshare termination, and they know how to help you be legally released from your timeshare contract. If you’d like to talk with one of our experts about how to break free from your timeshare prison, just fill out a contact form, and we will find a good time to give you your free, no-obligation consultation.