Should You Invest in a Timeshare?

Timeshares are vacation plans that have been around in the U.S. since 1969. Today, it’s a $9.2 billion industry, according to the American Resort Development Association (ARDA). That’s actually quite sizeable when compared to the nearly $8 billion music industry or Major League Baseball’s $9 billion in annual revenue. In 2016, there were 1,558 timeshare resorts just in the U.S., with an average of 132 units per resort.

A timeshare gives you a partial ownership in a vacation property. You can even think of it as owning shares of stock in the vacation rental. You pay an upfront price to purchase your unit and then an annual maintenance fee. This gives you access to the property for a certain period of time, which is usually the same time slot each year. When you are not using the timeshare, others with a similar interest are.

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The average sales price for a one-week timeshare today is approximately $20,940, with an average annual maintenance fee of $880, according to the ARDA. Most timeshare agreements are indefinite contracts, meaning that you’re obligated to pay the maintenance fee indefinitely, which is a big financial commitment.

If you want to use your unit on another week, you must “bank” your week and exchange it for another time or location. In the sales pitch (I had the misfortune of attending one), the resort mentioned it’s no longer doing week-based timeshares. It’s now a points-based system. You get X number of points per year when you buy a unit and can then use it any way you choose.

These days, timeshares increasingly operate on a points system, which gives users more flexibility with where and when they travel. For example, the Hilton Grand Vacation Club program gives you points that can be used any time during the calendar year at a Hilton Grand Vacation Club property, a Hilton brand hotel, or through RCI.com, a vacation exchange network. The club also recently added cruise and camping options in exchange for points. Members can roll over points from the previous year or dip into points from the year ahead.

Joyce Baki, a tourism specialist in Southern Maryland, and her husband bought a timeshare in Las Vegas through the club about eight years ago. Since the purchase, they have used points to stay at Hilton hotels throughout the country. “In the past nine months, we spent five days in Orlando and four days in Vegas, and brought friends with us both times,” Baku says.

Thinking about purchasing a timeshare? U.S. News spoke to timeshare owners, financial advisers, and industry representatives to help you identify the costs, benefits, and drawbacks of owning a timeshare.

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Pro: Save on travel expenses. Marilyn Belleghem, a marriage and family therapist from Ontario, Canada, appreciates that her timeshares come equipped with a full kitchen and laundry facilities. She says she saves by cutting out extra expenses, like paying for a coin-operated washer-dryer. Access to a full kitchen also enables timeshare owners to stay in more often to make home-cooked meals.

Moreover, most timeshares come fully furnished, which will save you a lot of money you’d otherwise spend on decor and furnishings if you were to purchase a vacation property.

Con: Timeshares can be difficult to unload. Jill Etesse, owner of a mobile app development firm outside of Washington, D.C., inherited her parents’ Vail, Colo., timeshare in the 1980s. The timeshare seemed like a good idea at the time of purchase, but when the family moved to Washington, D.C., in 1986, they found it difficult to make the trek back to Vail each year. Etesse has tried to exchange the property online over the years, but she hasn’t had much luck. She doesn’t think she would get much for selling the timeshare, so for now, she’s saddled with a $300 annual maintenance fee.