Doesn’t the premise of a timeshare sound dreamy? Owning a slice of paradise that you can escape to each year for a fraction of the price of an entire condo sounds like an incredible arrangement, doesn’t it? You’re essentially pre-paying for all of your future vacation stays. Besides, you could always sell your timeshare if you get weary of it, right? But is the cost of owning a timeshare worth the investment?

Often purchased while you are in vacation mode from a skilled, high-pressure salesman, a timeshare can seem like an incredible bargain at the outset. However, they come with ever-increasing and never-ending expenses that you often aren’t aware of at the contract signing because you generally aren’t given time to read the contract at the signing.

Before you get carried away by the excitement of the idea of owning a vacation property, take a few minutes to explore the true costs of timeshare ownership.

What is the True Cost of Timeshare Ownership

The true cost of fractional ownership, aka timeshare ownership, includes much more than just the purchase price. Here are a few things you should to take into account when tallying up the full price of ownership:

  • The agreed-upon price tag to purchase your week in paradise. The average cost of a timeshare in the US is around $21,400 according to the American Resort Development Association (ARDA). Of course, that amount varies based on the location of the timeshare, and properties outside of the US generally cost more.
  • Unless you are purchasing your timeshare with cash, don’t forget to factor in the amount you’ll pay in interest. Again, the average interest rate according to ARDA is 14% over a 10-year loan. Ouch!
  • Travel expenses to arrive every year. Travel expenses can vary widely depending on if you can get there via car or if you must fly to your destination.
  • Yearly support expenses, which will increase incrementally every year. The average maintenance fee for a timeshare is $940, typically increasing 5% each year in perpetuity. Meaning that there is no cap on the maintenance fees. They will increase year after year, and in a short amount of time, your maintenance fees will outpace the timeshare’s value.
  • Expenses to bank/exchange your week – Timeshares typically charge a fee for exchanging your week for one at a partner property.
  • Cash variances if your timeshare is in another country. The exchange rate from the dollar to local currency can add to the total expense.
  • Lost value of you aren’t able to use your property one year (ie: as in during an unexpected pandemic!)
  • Cost of selling your timeshare if you need to dispose of it. Is there a solid resale market, or will you need to sell it for less than what you paid for it?

Do Some Number-Crunching

Still unsure if fractional timeshare ownership is a good deal? Let’s do some figuring…What would it cost for a week at a standard condo similar to your timeshare?

For example, you can rent a nice suite on the beach in Florida for $200/night. For a week’s stay, you’ll pay $1,200. Considering that the initial yearly maintenance fee for a timeshare is $940, not to mention the cost of the mortgage payment, it doesn’t seem as though you’re “saving” anything at all, does it?

While many timeshare salespeople tell potential buyers that they’ll save money over time, simple math shows that those promises just don’t add up.

Add to that the fact that timeshares do not hold any value and are difficult to re-sell, and it becomes clear that your “slice of paradise” is sure to become a burdensome thorn in your side in short order.

Know Before You Go

Timeshare resorts assure travelers convenient recurring trips. And they’ll usually lure you in with a free dinner, concert tickets, or extended vacation stay to distract you from the fact that you’re making a considerable life decision on the spot. Before you head out to your next vacation destination, consider the full cost of timeshare ownership and run the numbers before saddling yourself with a purchase you’ll regret.

And if you’ve already taken the plunge and discovered that a timeshare isn’t right for you, there are ways to get out. Contact the Titan Exit Group and their team of experts will help you understand your options for getting out of your timeshare contract.

 

 

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