For many people, owning a timeshare sounds like a great idea: you get to enjoy a property at a beloved vacation destination and travel there every year for your allotted time. In the long run, it may seem like a great investment. After all, you won’t have to rent out a house every year at your vacation destination or book expensive hotel fees. But, like most things that seem too good to be true, owning a timeshare can be a serious financial burden and put you at risk in a variety of ways.
While it may be a blanket statement to say that all timeshares are a bad idea and should be avoided altogether, for the most part, it is unfortunately true. Below, we will learn about timeshare negatives, the risks of buying a timeshare, and why you shouldn’t even consider owning a timeshare.
Risks of Buying a Timeshare
A timeshare sales pitch is easy to spot when a hotel or resort offers free activities or perks ― like free golf, a free spa day, or a free restaurant meal ― in exchange for attending a timeshare meeting. You may think that there’s no harm in attending the meeting, as many people do. But you may be unaware of how they can trick you with flowery language and a hard sell. If timeshares were really so great, they wouldn’t need to coerce people into timeshare meetings with free rewards for attendance.
Below is a list of some of the risks associated with buying a timeshare.
- You might be locked into more than you can afford. People selling timeshares are usually very good at their jobs. Like a car salesman, they might show you their best or most expensive offer, and convince you it will be good for you in the long run. They may tell you that over the course of your life you will save tens of thousands on vacation spending. While you may be able to finance it so that you can pay less on your timeshare, the financial burden is often not worth it, especially if you can’t afford it.
- Timeshares don’t typically appreciate in value. Timeshares don’t generate profits, and like a vehicle, they depreciate as soon as you buy them. For this reason, they generally aren’t a good long-term investment. While some arguments for the validity of timeshares can definitely be made, a good financial investment is usually not one of them.
- Timeshares are hard to get out of. Most timeshare contract time periods and terms are forever. And, because they don’t usually include exit clauses outside a rescission period, it can feel very difficult to get out of your timeshare.
- Timeshares can be very hard to sell. Meaning that once you buy a timeshare, you may be stuck with it whether you like it or not. If that wasn’t enough, there are timeshare resale brokers who may scam you into more fees by telling you they have a buyer lined up, and after you pay their up-front fees, will tell you the buyer backed out. Timeshares are filled with these resale scams, so if you don’t realize what you’re getting into until after you buy the timeshare, it may be too late.
- Timeshares come with high-cost financing options and fees. This is another one of the timeshare negatives. Because financing options are paid through the timeshare company, they don’t involve standard mortgage fees and rates. This means they can pretty much charge you any interest rate on any loans you need for financing. Timeshares also come with special assessments and maintenance fees to cover things like repairs, damages, and upgrades.
So if you’re thinking about buying a timeshare, now you might realize it is almost certainly a bad idea. And even if you have some extra money and you figure that it would be easy and convenient for booking occasions, you should know that you’ll likely end up losing money. Finally, if you’re buying something that you may not be able to sell, there may be a reason it is hard to sell. That’s because typically, the supply of timeshare resales greatly exceeds the demand for resales.
And while many people are aware of the risks associated with a timeshare, people are still persuaded into buying them thanks to free rewards, and salesmen that are so good at convincing you that buying a timeshare will benefit you.
If you were misled about the facts of timeshare ownership, contact us to see how we can help you cancel your timeshare contract and related financial burdens.