There’s a lot of conflicting information about buying a timeshare. Many call it the worst financial decision you could make. On this episode, we invite Allison Berger to discuss the pros and cons of buying a timeshare. If you’ve ever been roped into one of those high-pressure sales meetings you’ll want to listen to consider if you made the right decision. You can also watch our short YouTube video summary to get a brief synopsis of this episode and see Allison in her spooky attire.
Have you ever considered buying a timeshare?
If you have ever been on vacation at an upscale resort you may have sat in on a timeshare presentation. These high-pressure sales meetings are designed to quickly nugde you to purchase and they pull out all of the stops to get you to sign on the dotted line. They claim to only need 90 minutes of your time, but those 90 minutes can be pretty intense. According to the American Resort Development Corporation, 2018 was the 9th consecutive year of growth for timeshare sales. Out of 127 million households in America, 9 million own at least 1 shared vacation product. So around 7% of American families timeshare owners. Maybe they are not that bad of an investment, right? Let’s start with exploring exactly what you are buying? What is a timeshare?
Are the intensive sales tactics worth it?
Having attended timeshare sales meetings we know they can be quite intense. The meetings are often set up like a party atmosphere. Since you’re already on vacation, decision-making can be easily influenced by the euphoria of open schedules and relaxation. Typically you are sitting there because you’ve received a bonus of some sort. Free nights at the resort, maybe tickets to a show or a theme park. During the course of the meeting, salespeople try to regale you with even more incentives to buy. Before you consider buying a timeshare you’ll need to know the language. Find out more tips on timeshares by listening to this episode of Financial Symmetry.
Timeshare pros and cons
The positives
We all know about the incentives to get you to buy a timeshare (or even just to sit in on the sales meeting), but what other positive experiences can be had from buying a timeshare? You will guarantee yourself a vacation each year if you buy a timeshare. The accommodations are typically very nice and often include two-bedroom suites with a kitchen. This beats staying in a cramped hotel room. Typically the break-even point of buying a timeshare is between 8-14 years, so if you vacation every year for 20-30 years you’ll come out ahead.
The negatives
But there are many negatives that come along with timeshares. Even though the average maintenance fees are only about $1000 a year, the average sales price is $21,000. If you change your mind and wish to resell the timeshare you may be out of luck. There isn’t much of a market for timeshare resales. Timeshares are complicated and can be challenging to book. If you don’t know the jargon of the timeshare company you could be lost and stuck vacationing somewhere you never wanted to be. Tell us about your experiences with timeshares. Shoot us an email, we’d love to hear your stories.
Outline of This Episode
- [1:47] Some stats
- [3:03] Our experiences with timeshares
- [9:47] Some pros?
- [14:56] What are the cons of timeshares?
- [21:45] Some tips to make the best decision for you and your family
Resources & People Mentioned
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Why inheriting that beautiful timeshare can bust your wallet – https://www.cnbc.com/2018/02/05/how-to-offload-an-unwanted-timeshare.html
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Don’t Fall for Timeshare Exit Scams – https://www.kiplinger.com/article/retirement/T048-C000-S004-don-t-fall-for-timeshare-exit-scams.html
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Considering a Timeshare? Don’t You Ever – https://www.kiplinger.com/article/spending/T050-C032-S014-considering-a-timeshare-don-t-you-ever.html
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What is a timeshare and how does it work? – https://www.timesharesonly.com/blog/what-is-a-timeshare-and-how-does-it-work/
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https://www.mousesavers.com/other-disney-vacations/disney-vacation-club/#opportunity – nice breakdown of opportunity cost of buying one vs investing with a breakeven point based on a long list of specific and customized qualifiers
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