Are Timeshares a Good Investment?

If you’ve ever been to Las Vegas, Orlando or Branson, you’ve likely seen an advertisement for a timeshare at some point or another. Usually these advertisements offer something like free Disney tickets, a gift card or even free nights at a hotel in exchange for touring a timeshare resort. If you take the bait and decide to go on a tour for the gift, make sure you know what you’re getting into because purchasing a timeshare could be the worst financial decision you ever make in your life.

When you buy a timeshare, you are buying vacation time in a resort that can be used for one or two weeks per year or every other year, depending on what you purchased. All timeshares are different. Some timeshares like Bluegreen offer points based programs that allow you to break up the timeshare week throughout the year and travel to different resorts within the brand’s network. Other timeshares only allow you to vacation at one single resort for your designated week each year. All timeshares can be exchanged through services like RCI and II that allow you to vacation at a different resort somewhere else in the world instead of the resort you originally purchased at though.

So now that you know what a timeshare is, you might be wondering if it’s a good investment. The answer is a resounding NO! Almost all timeshares purchased directly through a resort lose at least 50% of their value the second they are purchased. There is a reason timeshare resorts offer extravagant gifts in exchange for your attendance at one of their tours. They’re luring you in because you’d never be interested in their product otherwise.

When you buy a timeshare directly through a resort, you’re paying for all the overhead the resort endures to sell the timeshare. This includes the free gifts, advertisements, sales staff and their commissions, the sales facility itself and much more.

Sometimes, a timeshare purchase can make sense if purchased on the resale market. Timeshare resales are just about the same thing as retail timeshares, but are often significantly cheaper because they’re sold by existing timeshare owners rather than resorts. When a timeshare owner no longer wants to own their timeshare, he or she will typically come online and advertise it for sale at a heavily discounted price. Even if purchased on the resale market though, a timeshare is very rarely an investment.

Timeshare resales can be a good value if your family likes to vacation to the same spot each year as sort of a family reunion. Many timeshares come equipped with kitchens and private bedrooms, which can save you money on dining costs and the need to rent additional rooms at the resort to accommodate the whole family.

In general, don’t buy a timeshare thinking It’s an investment opportunity. Think of it as a way to force yourself and your family if you have one to go on yearly vacations. It is a fact that Americans do not vacation as often as they should. Timeshares can help change that. Let us know of any questions in the comments below!