Mention the word timeshare and many people will be looking for the nearest exit. Timeshare sales stir up memories of encounters disguised as free breakfasts in Mexico or presentations that were an unwelcome part of a discounted resort stay.
I have owned a timeshare for 11 years. My ownership is deeded at one location, but I own as part of a group that pools members’ deeds and awards annual points based on their value. My partial ownership of a unit in Vancouver nets me points for about 10 days accommodation during ski season in Whistler, the occasional overnight in Vancouver, plus a week or so at another location, which I have used in Mexico, the U.S. and on Vancouver Island.
I purchased on the resale market for about 10 to 15 per cent of its original price. Resales most often come on the market because buyers did not fully consider the implications of their purchase. Some ended up with timeshares that have little value or have annual fees that have skyrocketed, or due to life changes, that they simply do not use. Luxury items like timeshares fetch only a portion of their original value on resale. It is much easier to buy one than to resell, and it can take years to find a buyer. As the owner is required to keep up on their fees, if they are not using their timeshare, they can be motivated to resell at a firesale price.
Timeshares aren’t the ideal vacation option for all. Daily housekeeping, room service or expansive amenities are not included. Space is not always available and popular times like spring break need to be booked far in advance. Bookings are not as flexible as with hotels and often cannot be refunded.
With a low buy-in cost, I consider that I have received the full value of my timeshare purchase price back after enjoying it over 10 years. Allocating my annual fees over the nights I get, it costs me about $60/night to use my timeshare, less than half the price of a hotel stay. My group’s units have kitchens, room for extra guests, free parking, WiFi and laundry facilities, making vacations more affordable.
Things to consider before buying a timeshare:
Do your homework. Lots of websites offer timeshare sales, resales and advice. Consult other owners.
If you like going to a specific location every year, single resort ownership may work. Single resort units may be exchangeable for a stay somewhere else, but this usually requires additional fees. A timeshare group allows a choice of locations. To figure out what type of timeshare suits you, try renting one first. Lots of online options offer rentals.
Recognize that there will be ongoing fees. These cover building maintenance, property taxes, utilities and operating costs. Know what the fees are and how these have changed over time. Understand that fees will likely increase moving forward. Factor this in to any purchase decision.
Along with timeshare costs, consider the costs of vacation travel, activities, etc. when calculating what you can afford. There is no point owning, if you can’t afford to go! Locations that you can drive to are usually the most affordable to access.
A timeshare is an extra in life. Only buy what you can afford and afford to lose if something goes wrong. Think about what to do when you no longer want your timeshare. Most units are transferable, but reselling can be difficult. Some timeshare groups allow you to surrender your unit. You may lose all or most of your purchase price, but can be relieved of the maintenance costs.
Consider buying on the resale market. You miss out on perks provided to direct sales, but resales are usually heavily discounted.
Timeshare ownership can be an asset, but it is not an investment. Timeshares do not, as a rule, increase in value like most other real estate investments. Although you can generate revenue renting out your timeshare, rents are based on supply and demand. With Airbnb, discount hotel sites and lots of timeshare owners not using their units, there is ample vacation rental supply and rates reflect that. Renting is also fraught with complexities like securing payment, marketing, recovering for damages, etc.
Use a broker or transfer company. The additional cost is worth it to ensure your interests are protected. Read the purchase contract. Ask your representative about anything you are unclear on.