Just $120 a week for Myrtle Beach, Cancun, Oahu or Rio de Janeiro?! Who wouldn't want to vacation for a great price like that? Timeshare sellers offer deals like these (and seemingly better!), promising "flexibility, affordability and convenience" to their prospective customers. It almost sounds too good to be true. Unfortunately, as many customers have found out, the dangers and downsides of timeshare purchases far outweigh the promised benefits.
Take for example, a recent timeshare purchase: 7 nights for two at El Dorado Royale Swim-Up Casita in Cancun. Beautiful accommodations, all the amenities, Caribbean view and much more… a timeshare may seem like a great way to save money on that dream vacation! This trip could have been booked through Legacy Travel/wildtraveldeals.com for $5,400 including airfare, resort, and taxes. So, how much is saved with the "great deal" from the timeshare purchase? Once I added in the mandatory "food and beverage" surcharge (they don't advertise that on their websites and fliers), the trip was up to nearly $4,000 for the 7-night stay. Add in the plane tickets from Dallas to Cancun and the vacation’s cost exceeds $5,200! So, the timeshare’s fabulous savings turned out to be only $160.
Now, I have no objections to saving $160, and to be perfectly truthful, you would save $160 that week by purchasing a timeshare. But that's not the whole story. Timeshares aren't sold one week at a time. You are offered a 50-100 week package priced somewhere in the ballpark of $10,000-$40,000, depending on the property. Even if you can afford to take two weeks of vacation each year, you'd be putting quite a large sum of money into a 25-50 year investment that only returns a couple hundred dollars a year.
In addition to this large up-front cost, timeshare owners are typically assessed yearly maintenance fees for the property. These maintenance fees can range from $100-$500 per year. If it were all out in the open at the beginning, prospective timeshare purchasers would see a much larger cost than "a few hundred dollars a week for 5-star resorts."
Not only do timeshares offer minimal savings (at best!), they also carry a fair amount of risk. Search the internet for time share reviews. You will find numerous stories of people who bought a timeshare that offered them several 4- and 5-star resorts, only to be informed after a few years, that those top-rated hotels had been sold and had either dropped in quality or been removed from their timeshare options.
Another potential hidden cost is airfare. A few years ago, you could find a non-stop charter flight to vacation spots around the Caribbean without paying an arm and a leg. Today, rising airfare costs have pushed many of those charters out of business, forcing timeshare customers to spend more money and more time on one- or two-stop flights to their destinations.
Of course, another timeshare pitfall is so obvious it hardly needs mentioning. You'd have to be unbelievably in love with a resort (or a handful of resorts) to want to vacation there every year for the rest of your life! Timeshare sellers promise that it's easy to swap a week of your resort for a week at someone else's resort. It's not. Resorts, like nearly every other luxury we buy, go through popular phases. Your "hot spot of the year" may be well below the vacation radar in just four or five years. And then you're trapped with maintenance fees on a resort that's past its prime.
Timeshares usually only bring small savings to their owners, they are a very pricey high-risk investment, and to top it off, there are several facts about timeshares that would actually frighten away a careful buyer! First, there's the loss of money in a large initial investment. Some people are foolish enough to take out a loan or second mortgage to buy timeshare properties. Second, the proliferation of timeshare resellers online stands as a caveat to those who are thinking about purchasing. If timeshares are such a great investment, why are there over 1,500 of them available on eBay now, over half of them selling at less than $50? Many people who feel trapped by a useless or costly timeshare are reselling them at a loss. Third, if timeshares are truly exceptional deals, why are the sales representatives offering you free gifts to listen to a very high-pressure sales pitch? You'd think a great bargain could sell itself without bribery!
Timeshares are advertised as a great way to save money on a posh vacation, but the hidden costs, multiple uncertainties and serious red-flags should warn the potential buyer to proceed with caution, if at all. I've researched timeshares thoroughly and can pass along a word of advice: consider whether you'd be better off spending $15,000 on a risky long-term package, or putting that money into a savings account or a CD and visiting a reliable local travel agent to book your next get-away.
