Love ‘em or Hate ‘em
I am definitely Team Timeshare. Let me put that out there first and quite plainly, so there is no confusion. I have two timeshares that I use frequently and absolutely love.
I also absolutely DO NOT recommend timeshares for other people…unless they do their own research…
A Good Working Definition
A timeshare is considered fractional ownership in one or more locations.
A timeshare gives long-term or lifetime use of a lodging destination in exchange for annual fees, sometimes called maintenance fees.
A timeshare is a deeded ownership that can be passed through a trust or will to someone else upon the passing of the original owner.
A timeshare at one location, or through one family of resort destinations, can sometimes be traded or exchanged for an equivalent stay in another lodging company’s holdings.
Why The Nearly Universal Hate?
The above definitions probably sound pretty good. Well, the never-ending maintenance fees can be concerning, but, overall, you are buying guaranteed vacations for decades or even life. Not too bad, huh?
But the sales pitch? The overbearing salespeople? The confusing contracts? The cost!?!?
As a general statement, naysayers feel that they are being tricked into lifelong contracts they don’t understand, and hooked into yearly maintenance fees that go up every year, and don’t guarantee availability at their chosen resort at their chosen time.
Don’t ever sign any contract if you are confused or feel pressured. That is a bad idea in any industry, and could have generational impact if you do it with a timeshare. Make your own decisions in your own time.
Types of Vacations
So one of the first things you will need to determine is what type of vacation patterns you expect to have in the future. There are, commonly, three different ways you can purchase your ongoing vacations through the timeshare:
Fixed week
The most restrictive type of timeshare, this was the original style of purchasing power. This type of timeshare gives you the exact same week of the year for the foreseeable future. For example, if you have Week 52, you will have New Year’s Eve every year, regardless of what day New Year’s Eve falls on. This would be perfect if you have a very specific vacation requirement, but isn’t always perfect. Easter, for example, could fall anywhere in March or April, making it impossible to have Easter every year under this method.
Floating Weeks
Definitely less restrictive than a fixed week, many programs went to a floating week, which gives you a week each year, but you can choose the week itself, based on availability. This style became extremely popular through the years, with your week starting on either Saturday or Sunday. The option to change your week is very attractive, and the option to choose different resorts added to the availability for travelers.
Point-Based Programs
Currently the most popular style of timeshare ownership, points-based programs allow the owner to buy as many—or as few—points as they want. Each different resort, each different day, and each different style of lodging, carries a point value. This flexibility allows owners to use points for a weekend, a week or even longer, as a very wide variety of locations. Both of my timeshares are point-based programs.
What Are The Costs
There are different fees related to timeshares that you need to be aware of during your initial investigation of this method of vacationing. Slow down, and do extensive research about the frequency of these fees—and how often they can rise.
One Time
You buy your timeshare just like any other deeded property. The company sets the sales price, often having different purchase packages that will give you additional points or discounts. As a deeded property, you can obtain a mortgage–often through a preferred banker to the company—that you will pay off just like a home mortgage. And yes, interest may be tax deductible in certain circumstances.
Ongoing
You will have maintenance fees for the lifetime of your timeshare contract. These can be paid monthly or annually, and will potentially rise over time. Review the documents carefully to find out the percentage maintenance fees may be raised—this will be very important for you.
Special Assessments
A frustrating part of owning a timeshare can be any special assessments associated with your home property. Not unlike your own home, a large repair or improvement cost can be passed on to the owners through a special assessment fee. While infrequent, people who dislike timeshares often point to this as another “money grab”. For what it’s worth, in 20 years of ownership, I’ve never been hit with a special assessment on my timeshares.
It Can Absolutely Change
It’s important to remember that cost—and resale value—can vary considerably over the life of the contract. There is no doubt that maintenance fees will go up, and there is a fairly good chance the value of your initial purchase can go down. It’s important for you to understand these eventualities before you buy in.
Interesting Statistics About The Industry
As mentioned, I’ve owned timeshares for approximately 20 years, and I’m a happy owner. There have definitely been years I haven’t been able to get full use out of my properties (I am The Mayor, you know), but I’ve managed to use the points every year.
In the interest of fairness and research, I’ve got a few interesting facts about the timeshare industry I wanted to give you:
- The industry size is over $10 billion
- Almost 10 million American households own at least one timeshare
- Almost 40% of timeshare owners earn over $100,000
- Average cost of timeshare purchase is $24,000
How Does A Timeshare Actually Work?
So, how does this actually work? Here are the basics:
- I get my yearly allowance of points
- I decide to go on vacation
- I can choose dates and find what is available
- I can choose a location and see what dates are available
- I can just browse until something sounds interesting
- I reserve what I want
- “Home resort” advantage lets me book my own resort sooner than other people
- I can book whatever is available with a certain lead time. Lead time is 13 months for one of my timeshares, and seven months for the other.
If you can’t tell from this simple list, you need to plan well in advance, and sometimes you need to be flexible. For example, I decided to go to New Orleans in August, only to find there was only one location available, so I didn’t have much choice. Last year, I had specific dates I wanted to travel to Florida, only to find that my home resort wasn’t even available, since it was only one month away.
My Personal Experience
I am a very happy timeshare owner with two different companies. I have several friends who are also very happy timeshare people, while I have heard stories from many people about why they dislike or even hate their timeshare—paying the yearly maintenance fee without ever using the benefits of their contract. It’s entirely up to you. And, yes, you need to do your own research and make your own arrangements—it isn’t an effortless vacation contract by any stretch of the imagination. Here are my companies—which I DO NOT endorse for anyone else. I am simply giving my experience. Make your own decisions:
Worldmark
I own a small contract at Worldmark by Wyndham, which I bought for very little money almost 20 years ago. With a small contract, I use this primarily for a few days here and there—adding on to my Disney trips, for example. For full transparency, I have tried repeatedly to get a Hawaii resort, and I have never been successful, so this isn’t a perfect system for me. On the other hand, I’ve got Daytona Beach and New Orleans for this year, so I’m pretty happy with it. Maintenance fees go up marginally each year.
Disney
My beloved Disney Vacation Club timeshare was purchased almost 20 years ago. These points have gotten me to Hawaii four times now, giving me accommodations I could never afford otherwise. I use these points up every year—going into a borrowing mode almost constantly—leading me to add on more points several years ago so that we could continue to vacation as a growing family of adults. While it is available, I have never used my Disney points for anything except Disney products. Maintenance fees go up a bit each year, but not crazy.
So, Pat, Should I Buy In?
Did you notice the statistic about the buy-in average of $24,000? That, my friends, is big money.
I have no idea if you should buy a timeshare or not—that is a very personal decision only you can make.
Here, though, quietly and calmly, I will tell you my overriding suggestion for anyone considering purchasing a timeshare. Ready? Buy resale. Direct purchases of timeshares are extremely inflated, and generally do not carry enough benefits to make it worth it over the long haul. If you are considering a timeshare, do extensive research on the resale market, and you might just get a bargain for the vacations of your dreams.
But…you didn’t hear that from me.
THANK YOU FOR READING THIS FAR!!!
Thank you for reading all about what a timeshare is!
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Resources
https://www.forbes.com/advisor/mortgages/what-is-a-timeshare/
https://www.arda.org/news-communications/timeshare-industry-basics/us-timeshare-industry-numbers