This week’s article is written by a guest, Van from A Word About Wealth, an entertaining financial podcast.  They go over a variety of topics and it is a fun listen, so check them out.  Below is Van shares about his experience with timeshares…


I’ve made two major financial mistakes in my life. The first was purchasing a
universal life insurance (which I’ve since cancelled) and the other was purchasing a
timeshare (which I still regrettably own today). Some may see their timeshares as a
blessing, but I do not share that sentiment. Sure, the idea of traveling the world and
visiting new sites will always be appealing. But there are much better ways to go on
your dream vacation (as Mr. Ten Bucks has shown) than to own a timeshare.

What exactly are timeshares?

Simply put, timeshares are a way for you to own a piece of vacation property.
Instead forking out massive funds to buy a vacation home outright, you have the
option to purchase a “share” of the property for a specific amount of “time” within a
year, hence the term “timeshare”. The timeshares are typically held in resort
properties that are located all over the world.
There are several different flavors of timeshares and these are the 3 most common

  • Fixed – You can purchase a fixed week(s) that will only be reserved for
    you. This exact time period is locked for you every single year, so you
    always know that the timeshare is always available for you.
  • Floating – Instead of being limited to the same week every single year,
    you can make the reservations anytime. The only problem is that you run
    the risk of unavailability especially during peak holiday season.
  • Points – The points plan allows buyers to use points as a currency to
    reserve your vacation needs. With the previous 2 plans, if you don’t use
    your week, you lose it. However, with the points plan, many timeshare
    contracts allow you to roll over unused points, thereby minimizing any
    loss time with the timeshare.

How does one buy a timeshare?

Usually, promoters are sent to special events like concerts or sporting venues where
they entice you to a free gift for attending a 90-minute presentation. This free gift is
usually a theme park ticket, a gift card, or a free night stay at their resort. Often
enough, these gifts are very tempting and it gets many people into the door into this
90-minute sales pitch. More often than not though, this 90-minute meeting becomes
closer to a 2-3 hour endeavor and in the end, you either leave the premises with
your gift after being berated by the salesman, or you come out of there with the
biggest sense of buyer’s remorse as a new timeshare owner.

How much do time shares cost?

Like real estate, the timeshare costs vary greatly depending on location and
demand. In addition, like hotel chains, the majority of the timeshares are part of a
network of resorts under an umbrella timeshare company. Even within the
timeshare company each property are placed in tier based on their value (i.e. bronze
level, silver level, gold level, platinum level, etc). The prices are dependent on this tier structure, but in general, expect to spend an average of around $20,000 for a
decent property. Not to mention, the annual maintenance fees, that range from
$300-$800 per year depending on the number of weeks/points that are purchased.
Plus any booking fees that the timeshare charges when making any reservations.

What are the Advantages of timeshares ownership?

The majority of timeshare properties are much better than your typical hotel room.
The timeshare units, at least all of the ones I’ve been to, offer a kitchen, a full sized
fridge and much larger living spaces. It actually feels more like staying in a decent
sized condo rather than staying in a dinky hotel room.
Another benefit is the fact that you are not restricted to only the resort that you
purchased from. Especially if your timeshare company has a large network of
vacation properties, you can easily visit one of the other resorts instead and it’s
usually pretty painless.
Lastly, you can also generate income (or more like recoup some of the costs) by
renting out your timeshare. Many timeshare companies allow you to sublet your
timeshare to others without any issues.

What are the Cons of timeshares ownership?

Ugh… where do I start? First off, that maintenance fee is a real pain. When I first
purchased the timeshare about 10 years ago, my maintenance fee was only ~$150
per year. Now, that fee is closer to ~$400 per year, which is only an increase of
166%. Isn’t that lovely?
Secondly, many folks buy timeshare products that are not beneficial for them in the
future. Case in point, the timeshare that I currently own is wonderful for last minute
vacations that are booked within 45 days. This was great when it was just my wife
and myself, but adding kids to the mix, we’re lucky if we can even get out of the
house. Which basically means that our timeshare goes unused year after year.
Finally, this last reason is the most egregious of all. Your timeshare contract does
not end when you die. Instead, your inheritors will not only be burdened with this
timeshare, but they will also forever be burdened with all of the fees associated with
it as well. When you pass on, the timeshare becomes part of your estate, and when
that estate gets transferred to your heirs, so will the timeshare. If they refuse to pay
the maintenance fee, then the timeshare company has every legal right go garnish
the estate. All of that is written in your timeshare contract in fine print.


Today, there are so many options that you have to book your vacation. With
services like Airbnb and hotel rewards credit card hacking, there really isn’t any
need to even consider timeshares in this digital age. If you ever are invited to a timeshare presentation, just make sure they don’t waste more than 90 minutes of
your time, take the free gifts, and get the heck out of there.

My Conclusion

I think Van has clearly shown that time shares aren’t a good deal.  It is only a small time away that all the enticing reasons for buying change and you are stuck paying growing annual maintenance fees.  Since there are so many negatives people are often willing to give away their properties for free.  The only clever use I’ve heard of timeshares was a retiree who bought was able buy a bunch nearly free units to live in all year and pay less than $5,000 a year in maintenance fees.  Thanks again to Van for writing and here is an episode I like.


One comment

  1. Van says:

    Thanks again Mr. Ten Bucks for allowing me to post this article on your blog. Much appreciated!

    For your readers, if you’re interested in learning about the principles of building wealth, come check us out at awordaboutwealth.com. We release weekly podcasts and provide our podcast recaps, news articles, and financial tools on our website.

    You can find our podcast on Apple Podcast, Google Play Music, SoundCloud, Stitcher, or anywhere else you typically get your podcasts from.

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