The Truth about Timeshares
The real cost of timeshares. You’ve probably seen the offers – the promise of a FREE or super cheap vacation, which may or may not admit upfront the requirement of attending a timeshare presentation.
I’ve experienced at least six timeshare presentations over the past 20 years, and now I’m going to tell you what they are, what to expect, how to enjoy the benefits of timeshare presentations (you can get GREAT free stuff!), and how to avoid making mistakes.
The pitch: Dreaming of a cold piña colada under the warm sun? Maybe doing some sand castles with the little ones on a relaxing family getaway? Or looking for some exciting outdoor adventure? Whatever your motivation is, your dream vacation is about to come true.
What are Timeshares?
Since the 1960s, destination resorts have used a form of sales and marketing called Timeshares to sell their property in small chunks. You’re not buying a condo in the Bahamas, you’re buying the right to rent a condo for a week or so. Whether you’re buying a specific week of the year, or you’re buying points to buy various weeks based on demand and location, it’s all about the same. With ownership comes responsibility. And by responsibility we mean IT WILL COST YOU. You’ll want to find out as much as possible before even considering this purchase. And you’ll want to do your homework ahead of time.
How do I know my vacation is a Timeshare?
Many offers are popping up on daily deal sites, promising amazing vacations for low- or no cost. BUT, always read the fine print! That tiny, small text at the bottom of the website or advertisement could save you a ton of money and headaches. Somewhere in the offer it will say that you’re required to attend a 90-minute presentation. Some disclose requirements up front, and some do not. But, look for telltale language to answer the question “is this a timeshare sales pitch?“, such as:
- Offer is valid for married or cohabitating couples, husband and wife – or partners, where applies
- must both travel together and have proof of residency together.
- Another requirement may include age restrictions, such as adults must be “28 years of age or older.”
- And they may say, “Vouchers cannot be used back to back by the same couple” or “vouchers can only be used once per couple”
The Bottom Line on Timeshares
Timeshare presentations can be a great way to get a free or low-cost vacation. But, it’s very important that you assess this for yourself. Are you okay with high pressure sales? Can you say “no” if you don’t want to buy a timeshare? If you’re not comfortable with this, you may want to just avoid the whole situation rather than make a costly mistake.
Please do not misunderstand. I’m not saying timeshare presentations are bad! I’ve enjoyed MANY great deals and free entertainment as a result of attending timeshare presentations! From free Sea World tickets in Florida, to free parasailing in Mexico, for my family timeshare presentations have been a means to enjoy a more fun and frugal vacation.
I have not purchased a timeshare; I’ve successfully NOT purchased a timeshare several times. If you are interested in purchasing a timeshare, please see my recommendations for that in the “How to Purchase a Timeshare” section below.
The REAL cost of Timeshares
Depending on where you’re looking to buy, Timeshares can cost from $20,000 to $60,000 or more, and that’s just to buy it. The fees do not stop there. There are also yearly maintenance fees, which also vary by location. Generally speaking they’re between $500 – $1500 a year. If the maintenance fees are on the low side, check to see if they are “biannual” which means you have to pay them TWICE each year. Some timeshares are for a week or 2/3 at a specific resort. Or, it may be that you’re just buying “points” to redeem at various locations. If the timeshare is affiliated with a big timeshare holding company such as RCI, you have the option of swapping your week(s) or points with another location, which could cost you as well. And, just to use your timeshare that you’ve paid so much for, there may even be a fee involved to stay there (e.g., $250 a week). Granted, they start the sales pitch with “wouldn’t you love to stay here for $250 a week?” Sure I would, but I don’t want to pay for all this extra stuff!!
Here’s an example of timeshare ownership. Using the Timeshare Mortgage Calculator, let’s make up some numbers that aren’t far from reality:
- purchase price: $30,000
- 10 year loan
- 14% interest
(…because you’re not getting a break from the place that just gave you a free vacation. They want it paid off quickly at a high interest rate.)
- $700 in yearly maintenance costs
- And let’s assume you’ll use it every other year with an average cost of $500 to go toward everything else on your vacation – from airfare and meals, to resort fees, exchange fees, club dues, etc. That’s probably a low number, but let’s go with it.
This hypothetical Timeshare Will Cost You $ 93,090 Over The Next 15 Years.
That comes to $6,206 each year that you must pay whether you use it or not! You’ll notice it’s more than three time the purchase price of $30,000 – which seems like a lot to me in the first place for a place to stay for a few weeks a year (and you still have to pay for the time you use in addition to the payments and maintenance!)
So, for the first 15 years, your ONE week vacation will cost:
+ $250 per week you use
+ $300 airfare
total = $7,500! for ONE week
Still wonder why they’re handing out free or very cheap vacations to try to lure you in? 😉
How to Purchase a Timeshare (the right way)
But a time share is a good investment, right? It’s real estate. It’s will-able and transferable. Yes, it is real estate, and you can transfer it and even will it. But, as you’ll see from this quick eBay search, your benefactors might not be thrilled to receive something with little or no value. The fact is, timeshares DO NOT retain their initial resort price “value”. You can’t resell them for the high price you paid.
If you’re genuinely interested in buying a timeshare, eBay and Craigslist can be a good way to go to buy one! I’ve also seen hundreds of timeshares for sale at charity auctions for next to nothing. Just remember, you will have to pay to transfer it and you’ll have to pay yearly maintenance fees plus all the fees associated with using it. If you’re buying from a private party, you’ll want to do your research to avoid getting scammed. It’s sometimes better to buy from reputable timeshare re-sale companies.
If you want to sell a timeshare you own, carefully and thoroughly research reputable companies to help you sell it. Or, if you do a for sale by owner ad, be careful! Scammers may see your ad and contact you. This could range from scams that promise to eliminate your maintenance fees to criminals who want to rip you off by “buying” your timeshare and avoiding giving you any money.
What to expect from the Timeshare Presentation
Expect to receive something in return for your time and interest, such as a free or very cheap vacation at their resort, which may or may not include free airfare, free ground transportation (to and from airport), free entertainment and activities, and even free meals and drinks. However, if a FREE or very low cost vacation lures you into a timeshare presentation, beware of all the hidden charges with the “Free or cheap” vacation itself! There may be per-person fees for airfare, even if airfare is provided free! I saw one just today that had a $198 airfare fee per person… but airfare was included “free” with the package! They called them “airport taxes” but that’s because they tax you on estimated value of a package deal, and if you’ve priced tickets to Vegas lately, $198 is more like the actual cost not the tax. Of course, that depends on where you’re coming from. There may also be resort fees and taxes that are your responsibility. Again, I’m not saying this is a bad deal! I want you to be aware of what you’re really buying.
You’ll be expected to join them for a “90 minute” presentation. (I put quotes around that, because I’ve NEVER been able to get out that quickly, it’s more like 3-4 hours.) Presentation, smesentation… it’s a sales pitch. You’ll probably meet at least two or three people during the sales pitch, each which has been strategically trained to do their part in selling you a timeshare. It’s a VERY HARD sales pitch too. They sell books to equip people to be able to say no after these things! They’re not going to just say, “okay, you don’t want it” and let you be on your way. First, someone will show you their gorgeous property. Then, someone may treat you to lunch or a snack. At some point you’ll join the main salesperson who will go over the details of the package they’re offering, including the cost. (Which may equate to something very small, such as a “cup of coffee.” lol) If necessary, you may also meet a supervisor, who may be willing to bend the rules for you on this one occasion to get you the deal you deserve. In case you couldn’t tell, I’m being a little sarcastic. I don’t really care for hidden agendas, but I understand everyone has a job to do, and not every timeshare will be like this. But, it’s best to be prepared.
Timeshare Q&A (Quotes & Answers)
The nice sales folks you meet may use language that suggests how much you deserve such a nice vacation destination. They’ll compare how much you spend on vacations, and show you how this will save you much more and be much better.
Here are some of my favorite quotes, which I have encountered in timeshare presentations, and my response to them:
I bought my first timeshare when I was 19. It’s paid in full and I can will it to my kids. We’ve enjoyed vacations every year together as a family. — Timeshare Salesman in Orlando, Fl
I don’t know if this person really bought a timeshare when they were a teenager, but I do know they were attempting to paint a picture to me of years of beloved family time, happiness and relaxation. Who wouldn’t want that? They’re hoping for an emotional reaction that will get you to grab your checkbook and take charge of your life! Looking at that huge number up above, I personally would have a very hard time relaxing and enjoying my family in a timeshare I knew we couldn’t afford.
I buy whatever I want because I’m dying, and I put it in only my name so it won’t burden my wife when I’m gone. — Timeshare Salesman in Orlando, Fl
This guy was extremely entertaining, but I didn’t believe most of what he was saying. It was a major attempt to get to the core of why everyone would love to have the freedom of unrestricted vacation. Sort of like a “bucket list” approach to timeshares.
I work so hard, I deserve a luxury vacation. — Timeshare Salesman in Las Vegas, NV
My response: I work hard too, and I deserve not to string myself out like this with an overpriced luxury that I cannot afford and will probably drive us to bankruptcy. He then said, “oh, I like her, she’s a tough cookie.” It was interesting that he still liked me after my response. But of course he did. He still wanted me to buy his timeshare. I like to think of myself as a level-headed person who likes to have fun, yet doesn’t want to wake up tomorrow with huge regrets.
And why not buy real estate as a smart investment where I can get a return on my money? — Timeshare Salesman in Cabo San Lucas, MX
As I mentioned above in the “How to Purchase a Timeshare” section, timeshares are selling on eBay for next to nothing because people buy them and can’t keep them. Whether they aren’t really using it, their situation changed and they can no longer afford it, or they couldn’t afford it in the first place, many people are looking to dump their timeshares. If you figure annual maintenance fees, paying on the big loan you probably took out to buy it, and then having to pay to actually use it, many find they can’t really enjoy a timeshare after all.
I shouldn’t be telling you this, but I can get you X, Y or Z if you buy today. – Three timeshare salespeople in Puerto Vallarta, MX
Funny thing was, of the three sales people encountered that day, all three of them said this – going so far as to say they could get fired for saying this, or offering such a great deal or whatever. Ummm… well, we wouldn’t want you to get fired. So, no thank you. 😉
If you’d like to buy a timeshare and feel your family can afford it, shop around and get a good price. Do your research to avoid getting scammed. Buying from a private party means you’ll help someone out who needs to sell and you’ll save yourself a bundle.
If a timeshare is not right for your family, you can still enjoy all the benefits offered from a timeshare presentation. When you sit through a presentation, they will give you free gifts (money, theme park tickets such as Disney World, Disneyland, Sea World, Universal Studios, Knotts Berry Farm, etc.)
Just make sure you stay true to your initial intentions. If you don’t want to buy, DON’T! Do not change your mind just because they’ve worn you down.