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Timeshare Facts Guide

Timeshare Facts Guide

What Exactly Is a Timeshare and How Does It Work?

If you ask a timeshare salesperson, “What’s a timeshare?” they’re likely to tell you it’s a piece of paradise. Many timeshares are located in beachside resorts or popular tourist destinations, but they usually are not a dream come true once reality sets in. For plenty of owners, a timeshare seemed like a good idea at first but quickly became a burden for various reasons. Some timeshare owners felt pressured into buying their unit and feel trapped with something they didn’t really want in the first place.

Before we discuss the reality of owning a timeshare and the challenges owners face, it’s important to know what a timeshare is exactly. Simply said, a timeshare is an agreement in which you own part of a vacation property for a certain amount of days — often a week. Usually, timeshare owners have access to their units during the same time slot every year. How does this work? Typically, you’ll pay a certain amount upfront in addition to ongoing maintenance fees. But that’s not all. There are many expenses involved in owning a timeshare, which you’re required to pay whether you use the property or not. These may include taxes, special assessment fees and a mortgage.

Besides the cost of owning a property that you share with others, there are several other disadvantages of being a timeshare holder. For example, timeshares are difficult to get rid of and may even feel impossible to unload. In addition, there are crowds of con artists waiting to take advantage of timeshare owners through fraudulent resale schemes.

Despite the challenges, legitimate help is available to owners who feel frustrated and stuck. The first step to making a decision about a timeshare is to know the facts, which is what this guide is all about. In this guide, we’ll answer questions such as:

  • Why are timeshares bad?
  • Is owning a timeshare worth it?
  • What are common timeshare frauds?
  • How do you get rid of a timeshare?

If you’re considering buying a timeshare, or own a unit you want to get rid of but don’t know where to turn for help, you’re not alone. According to the American Resort Development Association (ARDA), the U.S. timeshare business is a $10 billion industry — larger than Major League Baseball and the music industry. Despite the industry’s immensity, there are ways to stand up against timeshare companies and set yourself free. Keep reading to learn more about timeshares and how to sell your timeshare without getting scammed. At EZ Exit Now, we’re happy to share our knowledge about timeshare cancellation and assist you however we can.

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Cons of Owning a Timeshare

According to ARDA, 9.6 million households in the U.S. own one or more timeshare products. Many timeshare owners purchased their piece of property after attending a high-pressure presentation and later regret their decision to buy. If this happened to you, we understand entirely. It’s very easy for anyone to fall into the timeshare trap.

Timeshare representatives will not hesitate to manipulate potential buyers

Timeshare representatives will not hesitate to manipulate potential buyers emotionally and use various tricks to make a sale. They also often target those who are on vacation, knowing that vacationers have their guards down and tend to spend more. Plus, vacationers may not know the risks of buying a timeshare at the time of the presentation and might make a decision before they can think things through and do their own research. Some people attend timeshare presentations for the promise of a free gift, not knowing the pressure they’ll face to buy.

With all the false promises you’ll hear and pretty pictures you’ll see during a presentation, it can be hard to realize the cons of timeshare ownership until it’s too late. In this chapter, we’ll bring the disadvantages of owning a timeshare to light, and we’ll ultimately answer the question — is it worth it? If you’ve realized it’s not worth it to you, reach out to us at EZ Exit Now to learn about our timeshare cancellation process.

Timeshare Cons

During an hours-long presentation, you can expect to see photos of sunny beaches and smiling vacationers, but don’t plan to hear what it really means to own a timeshare. A salesperson may not even call their property a timeshare, but instead, say it’s a “vacation club” to make it sound better.

If you’re weighing the pros and cons of owning a timeshare, know that the list of drawbacks is much longer than the rewards.

Disadvantages of Owning a Timeshare

The disadvantages of owning a timeshare include:

  • They’re expensive: Timeshares are expensive. According to ARDA, the average cost of a timeshare is $21,455. That’s the price you must pay upfront to own the property for an allotted amount of time each year. If you can’t readily hand over cash, you’ll need to get a mortgage and pay interest. In addition, you’ll need to pay yearly maintenance fees, special assessment fees, property taxes, utilities and the cost of traveling to the timeshare. Maintenance fees tend to increase over time, often faster than inflation.
  • They’re binding: Many timeshares have a lifetime agreement and will be inherited by family, even if they can’t afford it. This means family members might get stuck paying sky-high yearly maintenance fees whether they use the unit or not and will also face the challenge of selling the timeshare. Most developers won’t let heirs give a timeshare back for free because they could no longer collect maintenance fees then, and they know they wouldn’t be able to find another buyer.
  • They’re boring: Owning a timeshare often means you’ll visit the same place over and over, which may not be fun or interesting after time. Why tie yourself down to the same location when you’re free to explore the world without a timeshare? Considering a hotel room costs around $132 a night on average in the U.S., or $924 a week, but doesn’t involve any long-term commitment or yearly fees, it just doesn’t make much sense to buy a timeshare in most cases.
  • You have to pay no matter what: You’ll still have to pay for your timeshare even if you face financial hardship in the future or your physical condition changes, and you’re unable to travel. This means if you can no longer afford to take vacations, you have to pay yearly maintenance fees and other required costs — no exceptions. Timeshare owners have no say regarding the maintenance fee amount.
  • You can’t change the date: If you have a fixed-week timeshare, which typically means you have access to the property during the same week every year, you can’t reschedule your vacation for a different week if needed. What if you can’t visit the property during the allotted time due to an unforeseen health issue, for example, or have a new inflexible job schedule? Owning a timeshare is equivalent to paying for a vacation in advance. There’s no way of knowing if you’ll be able to vacation at a specific time every year in the future. To timeshare developers, it doesn’t matter what life circumstances you may be facing, so you’ll have to pay for nothing if you can’t make your trip.
  • Scammers abound: The industry is flooded with scammers trying to rip off individuals who are desperate to get rid of their timeshares. Con artists commonly promise to sell a timeshare for an exorbitant fee upfront, only to disappear once the “brokerage fee” is paid.
  • They depreciate: Timeshares depreciate, so they are not a good investment. Even timeshares located in desirable areas lose value the moment they’re sold and continue to drop in price over time. Many old properties have no value at all but maintain expensive yearly fees.
  • They’re hard to rent: You can only rent your timeshare during your allotted time — if the developer allows. Trying to locate renters to take over your vacation year after year can be a difficult and time-consuming process, and you may not be able to find anyone at all. Usually, there are more timeshares for rent than people who want to rent them.
  • They’re nearly impossible to sell: Unloading a timeshare can be a stressful, frustrating experience. Some owners find it impossible to sell their timeshare. The market is saturated with timeshares, so the supply far outweighs the demand. Also, since you share the property with dozens of other people, you can’t make any changes to increase its value or attractiveness. It’s not hard to find timeshares on sale for one dollar, and some owners willingly give their timeshares away so that they can stop paying fees.

Timeshare Facts

If you attend a timeshare presentation, you’ll likely hear everything but the facts. Here are some timeshare facts from 2019 to help paint a clear picture of the industry:

  • 2019 was the ninth straight year of growth in the timeshare industry, bringing in over $10 billion in sales.
  • There are 1,580 U.S. resorts and 204,100 units.
  • The average maintenance fee increased by 2% over 2017 and is $1,000.
  • Timeshare owners and guests spend an average of $2,439 per vacation on items such as airfare, entertainment, rental cars and restaurants.
  • The average age of timeshare owners is 47.
  • Nearly one in four (22%) of timeshare owners rented or gave their timeshare to others in 2015.
  • More than two-thirds (68%) of timeshare owners are married.

Is Owning a Timeshare Worth It?

First, it’s important to understand that a timeshare is not an investment. An investment is something that appreciates over time or produces income, and a timeshare is highly unlikely to do either, no matter what a salesperson says. A timeshare’s only value is the enjoyment you get out of it.

It's important to understand that a timeshare is not an investment

Would you be happy visiting the same place every year for decades and staying in a home that’s not completely yours? Or paying rising fees whether you’re able to vacation or not? Remember — a timeshare is nothing more than paying for a vacation in advance. No one can see what the future holds, so it’s important to consider if you’d want to pay continually for something you may not even use.

If timeshares are a bad idea, why do people buy them? Many people who buy timeshares do so out of fear, pressure, intimidation and confusion. They may have gone to a presentation never intending to buy a timeshare and left with a heavy burden on their hands. It’s not uncommon for timeshare owners to have made the purchase with a credit card or by borrowing from a retirement plan, only to add to financial hardship. If you take out a loan to pay for a timeshare, you can expect to pay high-interest rates.

A better option may be to invest in a vacation home that’s entirely yours or stay in a hotel. In either case, you’d have much more flexibility and freedom. Owning a timeshare is a huge financial commitment, and more often than not, a money pit.

With all things considered, it’s likely not worth buying a timeshare. However, to determine if a timeshare is worth it to you, it’s best to carefully weigh the pros and cons and make a decision only after you’ve thought about it and not in front of a pushy salesperson.

Chapter 2: Common Timeshare Scams