Is timesharing right for me?

The purpose of this article is to establish what we consider to be a few hard and fast rules to live by when attempting to determine conceptually if timeshare ownership is a good match to meet your vacation style.

If you’ve done any searching on the internet about timeshare ownership, you already know that there is a LOT of negative feedback out there from a subset of timeshare owners that are collectively very unhappy, and very vocal about their collective unhappiness. Often you’ll literally see replies to posts from people who are considering a timeshare purchase, or people who are brand new timeshare owners, saying “run the other way!!!!” or “rescind while you can!!!!” or “worst decision we’ve ever made!!!!” when it comes to timeshare ownership. These types of posts are chock full of sordid details and nightmare stories that, to be frank, can be quite scary to read.

Why are there so many people out there who are unhappy with their timeshare ownership?

First off, it’s important to remember that oftentimes those who are unhappy tend to be much more vocal than those who are happy, as a generalization. So, the reality is that there is a minority of timeshare owners who are in fact unhappy – and this subset of owners is very vocal about their collective unhappiness and are very willing to share their strong opinions on timeshare internet forums.

The timeshare ownership rules to live by that we outline in this article are designed to help ensure that you don’t end up becoming yet another unhappy timeshare owner. They are designed to ensure that you are a happy timeshare owner, both in the short term and over the long term.

Rule #1: THE GOLDEN TIMESHARE RULE: Never finance a timeshare purchase!

Many a timeshare sales person will do pretty much anything in their power, including employing outright lies and half truths, to get you to finance a very large dollar amount to purchase what by every definition is a luxury purchase. The timeshare sales model is also geared toward encouraging people to make a very large impulse buy without performing any substantive due diligence.

Whether you are a prospective purchaser who accepted a cheap weekend getaway, renting from an existing timeshare owner or directly from the timeshare company, or are even a current timeshare owner, people are either required or somehow convinced, oftentimes via free gifts, to attend timeshare sales pitches. These sales pitches are disguised as “vacation consultations” or “owner updates” or other types of meetings, but trust us when we say, they are simply sales pitches in disguise. How do we know these meetings are in fact sales pitches? We simply look at the roles of the people who are running these meetings. If these were really meetings about “owner updates” and weren’t sales pitches, then the meetings would be run by customer service representatives or those from “Owner care.” ALL of the people who run these meetings are employed by the sales and marketing organizations – NONE of the employees are from the customer service organizations in comparison. The sales and marketing organization has one primary goal – to sell the product – in this case – to sell timeshares! This is the simple truth of the matter.

This sales pitch, in which someone is essentially trying to get you to spend thousands or even tens of thousands of dollars as an impulse buy, is all done via back of the napkin handwritten fuzzy mathematics. If you are actually pressured into making a purchase, you are rushed through a contract signature process that is, with some level of intention, designed specifically to discourage people from performing any real due diligence or applying simple best practices for financial decision making. There’s no legally required cooling off period like with most other large financial transactions for instance. If the back of the napkin impromptu approach to timeshare sales isn’t a red flag in and of itself – we honestly don’t know what is. The entire industry sales model is ripe for regulation and change in our opinion. But, we digress…at least for now.

Simply put, timeshares are not investments, they aren’t a need, they are a luxury purchase plain and simple. If you were to speak to any financial advisor – every single one of them will confirm this fact. Those same financial advisors will tell you never to finance luxury purchases, especially timeshares, since timeshares are not secured debts. They have no inherent value. Timeshares, especially the modernized points based systems in place today, are simply forms of paying in advance for vacations rather than paying for vacations over time. The concept being that paying in advance locks in a lifetime of vacations at today’s prices, at least that’s the theory.

If you cannot afford to pay cash up front for your timeshare purchase, don’t buy a timeshare. Because most timeshares are essentially worthless from a resale standpoint, it is especially risky to even consider financing a timeshare purchase. If, Heaven forbid, you experience a job loss or any one of a number of unforeseen life changes that result in financial distress – because timeshares hold no inherent value – it’s all but impossible to recover your initial investment. This is why it is critical to follow our first golden rule.

Violation of rule number one is responsible for the vast majority of timeshare complaints and for the very negative reputations that most timeshare companies enjoy on the internet forums. This is because the timeshare sales practices actually encourage people to finance a luxury purchase. Many people fall for the misleading sales tactics, and end up financing their timeshare purchase – often at very high credit card interest rates, which when combined with the maintenance fees due every month, makes for a huge monthly financial commitment – often equivalent to another mortgage payment! As a result, people who finance their retail timeshare purchases then cannot actually afford to fund an actual vacation – even without having to pay for the accommodations. And there’s nothing that breeds contempt more than paying for something every single month that you can’t ever actually use in life.

This is also in large part why we wholeheartedly recommend obtaining your timeshare on the resale market. Since modern timeshares are not in fact real estate financial assets with any inherent value, you can generally obtain timeshares for little to nothing on the resale market – especially when compared to their original retail sale price from the timeshare company. This eliminates the steep cost of buying directly from the timeshare company – which bypasses the need to finance your timeshare purchase.

Rule #2: You must have enough vacation time to use your timeshare ownership

The second most important rule is that you must have sufficient vacation time to actually dedicate to your timeshare ownership. If you only have one or two weeks of vacation annually, and you also have other vacation commitments that you want to enjoy in addition to your timeshare ownership – timeshare ownership probably isn’t a good match. In these cases, you’d be much better off renting from an existing timeshare owner.

For example, let’s assume you have two weeks of vacation in any one year. Let’s also assume you own a boat or an RV and want to have at least one vacation centered around your pleasure vehicles. This leaves you with only one week left for a possible timeshare vacation at a resort. Yes, there are some exceptions in that there are some timeshare resorts that can accommodate RVs and pleasure craft – but they are few and far between. If you fall into this category – chances are timeshare ownership is not a good match.

We generally recommend you have at least three to four weeks of vacation, and that you can dedicate at least two weeks of vacation entirely to your timeshare ownership. Why? Because paying for something every month that we cannot use very often, is not a recipe for happy ownership of said something. That brings us to our third rule…

Rule #3: You must be flexible with your timeshare vacation plans

Timeshare ownership, and especially the points based timeshare ownership plans being sold and resold for the most part today, all work best for those who can exercise flexibility when scheduling vacations.

If you are the type that wants to take vacation on specific days of one specific week, at a specific resort, in a specific room of that resort, every single year with no exceptions, chances are timeshare ownership is not a good match.

The one caveat to this rule is that there are still some weeks based timeshares out there – so if you want a specific week, at a specific resort, in a specific room or building – then it’s possible you might find what you’re looking for – but the majority of timeshare ownership sold today is based on a demand points based system – whereby all of the timeshare owners are essentially competing for the same available inventory – especially for prime season demand resort locations.

If you are the type that can say “we want to vacation on a beach, sometime over the summer or the shoulder seasons, somewhere in the southeast,” then timeshare ownership may work for you. In this example, you could end up on the gulf coast of Florida, the Atlantic coast of Florida, somewhere in the Caribbean, or perhaps even Myrtle Beach or the Outer Banks in the Carolinas. Flexibility is key here.

This is not to say you won’t necessarily get what you want at a specific resort – but the more specific your vacation requirements become, the farther in advance you will have to plan…which brings us to our 4th rule…

Rule #4: Chance Favors the Prepared Mind – Timeshares work best for those who plan further ahead

If you are not the type to plan ahead and prefer to make plans last minute for vacation, or if your personal and/or work or school responsibilities don’t allow for you and/or your family members to plan ahead, then timeshare ownership is usually not a good match. This is particularly the case if you want to take your vacations during prime seasons at demand resorts, just like the majority of other timeshare owners also want. This is also the case if you typically require larger rooms, such as three or four bedroom units, as these larger units typically go very quickly as far in advance as is possible – at least ten months out.

The internet forums are chock full of timeshare owners who are very vocal about not being able to ever book their vacations when they want, where they want to book them. What often goes unsaid is that these timeshare owners are trying to book vacations within 90 days, during prime or shoulder seasons, at the most popular resorts. If you cannot plan at least 10 months in advance, even as far out as 13 months in advance, then timeshare ownership may not be a good match for you.

That said, there are a few caveats to this rule. If you don’t require a larger room, you do have a better chance of finding some availability, like a studio or a one bedroom unit, without having to book as far out. If you can follow rule #3 and be flexible, you’ll also be more likely to find better availability.

Looking for more advice on best practices for booking reservations? Click here to read our article on this topic.

Rule #5: Vacations at popular upscale resort areas are appealing and you have the disposal income to fund these types of vacations

Most timeshare locations are built in or around popular resort areas. Unless you happen to live within driving distance of a few nice resort areas that have timeshare locations, most likely you will have to take flights to/from your vacation resort. Flights are expensive – especially if multiple family members are going. Travel costs can often add hundreds or even thousands of dollars to your vacation plans very quickly.

While many resort rooms do have nice kitchen areas – oftentimes you will end up eating out while on vacation. Who among us really wants to cook constantly while on vacation? Again if you have multiple family members with you, eating out often adds hundreds of dollars, if not more, to your vacation expenditures.

Purchasing tickets to local theme parks or other local attractions? Even more money. Vacations at many timeshare locations can get expensive. For these reasons, make sure you have the disposable income to fund nice vacations. If you can barely afford your timeshare ownership, and have to skimp on everything else every time you go on a vacation, chances are timeshare ownership is not a good match.

Rule #6: Timeshare maintenance fees will always rise over time

Recognize up front that, as a general rule, timeshare maintenance fees are going to rise either at or slightly over annual inflation rates every year. There are always exceptions that may rise less or more than these rates, for various legitimate reasons, but this is a good rule of thumb to go by with respect to maintenance fee increases especially over the long term.

Oftentimes you will see folks that state that their maintenance fees have doubled over time. Again, this is to be expected roughly every 20 years as a general rule of thumb, at least provided U.S. inflation rates stay between 1-2% annually. A 20 year doubling rate assumes an annual maintenance fee increase of 3.5% every year.

Please note that there are always exceptions to this rule. For example there could be special tax assessments that need to be funded from time to time that may increase maintenance fees beyond the normal expected annual increases. If you ever want to know why your maintenance fees increased – you can contact the resort HOA for more detailed information.

Rule #7: The value of timeshare ownership is realized over the long term

Since timeshare ownership is really about prepaid vacations, the longer you own and the more you use your timeshare ownership – the cheaper your net investment on a per vacation basis over time.

When you spread out the costs of your timeshare ownership over the long term – you are essentially able to enjoy luxury accommodations for the cost of hotel stays. That’s a pretty good deal when you think about it.

Final Rule: Some rules are made to be broken

It’s worth noting that for every one of the above listed rules, there’s always a valid exception. If you happen to be a valid exception to any of these rules, then good for you. Everyone has their own rules to live by, their own timeshare ownership experiences, and what works specifically for them may not work well for the masses.

That said, following these rules will protect the vast majority of people considering a timeshare purchase from making big mistakes that will cause heartache and result in unhappy timeshare ownership. Do you think we’re missing an important rule? Please respond below in the comments area!

Lastly, there’s also some good advice in our ‘Did I do the right thing?’ article along similar lines to the article you just read, please check it out for more great information on how to evaluate timesharing as it relates to your vacation styles.

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