If you’ve ever been to a timeshare presentation, heard Dave Ramsey rip it to shreds or read an online complaint, you know that there is a lot of negative buzz about timeshares. Often, this is because of a lack of understanding about what timeshares actually are and why they’re so controversial.
A timeshare is a vacation ownership product that allows you to use an allotted week at a particular resort or resorts for an annual fee. It can be a good option for families who don’t want to stay in hotels or pay for multiple vacations every year.
The upfront cost is usually based on location, unit size and amenities. A one-bedroom, two-bathroom unit with a kitchen averages about $20,000 in New York City and $24,990 in Florida, according to the American Resort Development Association (ARDA).
While salespeople may claim that timeshares are more cost-efficient than hotel rooms, this only applies when you’re comparing what you’ll have to spend on maintenance fees. And even then, the ARDA says that you should expect to pay around twice as much for a week in a timeshare than you would for the same vacation at a hotel.
You’ll have to pay for maintenance fees, property taxes, utilities and more — all of which will likely be bundled together with your upfront costs. And since you’re not paying for the time you use the property, those costs can quickly add up.
They’re costly and not tax-deductible, which means they can be a burden to your budget. They can also be difficult to sell or unload if you’d like to move on from your vacation home.
Most developers don’t allow heirs to gift their timeshare back for free, so they’ll keep collecting the yearly fees for as long as they own the property. This can be a huge financial strain for family members who may not be able to afford the maintenance fees or find someone else to buy their timeshare for them.
It’s easy to get overwhelmed by all of the choices and responsibilities that come with timeshare ownership. That’s why a large percentage of timeshare owners are dissatisfied with their experience.
The earliest known timeshare was in Europe, at the London’s Albert Hall in the late 19th century, where members subscribed to a building fund that gave them a right to a specific seat and tickets at regular intervals.
Today, there are about 1,580 timeshare resorts in the United States with 204,100 units. The average unit is more than 1,000 square feet and offers more space and amenities than a standard hotel room.
Many timeshares have fully-equipped kitchens, so you can cook your own meals without spending extra on food while you’re away from home. You’ll also have access to a laundry facility and other conveniences that can make your vacation easier.
You’ll have to pay yearly maintenance fees, which are typically not tax-deductible. They’ll increase each year and can be a big expense for people who don’t travel a lot, especially when they don’t get a lot of use out of their timeshare.
