Marriott’s Harbour Lake, Orlando, Florida/zzdtravel

While many of us would like to own a vacation home, the cost and year-round upkeep prevent us from turning that dream into a reality. If you’re set on the idea of having a home-away-from-home, owning a timeshare might be the best option. However, you need to do your homework. First, you’ll need to understand how timeshares work.

When you buy a timeshare, you are purchasing the right to use a specific unit at a resort for a designated time period every year -- usually one calendar week, though it can be longer. You own that right for the rest of your life, or a contracted number of years. You can sell it at any time. The timeshare is purchased upfront for a lump sum. Pricing will vary based on the property itself, as well as what the week you want is “worth.” Unsurprisingly, summertime and Christmas are going to cost more than less popular times.

In addition, you must pay maintenance fees (a yearly lump sum or monthly payments), plus your share of the property taxes on the resort. Those maintenance fees, which can range from approximately $500 to $1,200 a year, must be paid whether or not you use the unit. When you are staying in the unit, you’ll be charged a fee for housekeeping services.

A timeshare purchase is legally binding, not an arrangement you can opt out of, so consider the pros and cons carefully. The terms of owning a timeshare vary, so always read the fine print before making a decision. But, generally speaking, here are the potential perks and drawbacks of being a timeshare owner.

Hotels in this story

Price Dates

Marriott's Harbour Lake

Payday Condominiums

Carlsbad Seapointe Resort

Legacy Vacation Resorts

The Pros

The Two-Bedroom Condominium at Payday Condominiums by Wyndham Vacation Rentals, Utah/zzdtravel

A Homey Feel

A timeshare unit is like an apartment, with one bedroom and bath (at least), a kitchen, a living room, and laundry facilities. Owners get the conveniences and feel of home, plus the ability to save money by cooking their own meals. “With the kids, it has been great to always have a kitchen and laundry available, unlike at a hotel,” says Dawn Lynch, a mom of twins and a timeshare owner who lives in West Babylon, New York. “And there are always activities by the pool for the boys.”

Affordability

A timeshare vacation can be a money saver over the long haul, especially for large families. A group of five or more needs to book two rooms in a hotel — and then hope those rooms are close, if not adjoined. Even if you’re a family of four, sharing one hotel room can be less than comfortable. Opting for a timeshare can pay off. Darcy Falcone, a mom of two who lives in New Rochelle, New York, says buying a timeshare in Aruba was a great decision. “It sleeps eight, so the kids can bring friends if they like, and we all fit comfortably. And if you compare our per-vacation cost to what we pay for similar-sized accommodations of the same quality in the same area, we’re coming out way ahead,” she adds. Plus, if you’ve ever had to cancel a vacation at the last minute due to unexpected expenses, you may be able to avoid that disappointment in the future with a timeshare, which is essentially prepaid when your vacation week arrives.

Another point worth noting: High-end digs can be accessible to those without high-end finances. For example, buying a posh beachfront condo in Bermuda can cost a fortune. However, a one-week timeshare at the same property might be $20,000, plus fees.

Rental Income

If you know well in advance that you won’t be using your week, you can rent out your unit. The timeshare’s management company may be able to rent it out for you, but you’ll need to pay a fee. If you have a “lock-off” unit, you may be able to take your vacation and get a bit of rental income. Falcone has done this when only she and her husband visited Aruba. “I can rent out the front two bedrooms, lock the door connecting that part of the unit to the rear bedroom area, and just go in and out the rear door,” she explains. “Some people say timeshares are limiting, but I feel I do have options.”

Cons

Grounds at Carlsbad Seapointe Resort, California/zzdtravel

Unpredictable Costs

Maintenance fees can — and often do — go up each year. Before you sign, ask whether maintenance fees are capped, meaning they can’t rise above a set amount. In addition, one-off major upgrades, like replacing the carpeting or windows throughout the resort, may not be included in the regular maintenance fees, and you’ll have to pay your portion if they’re not. Keep transportation costs in mind, too. If getting to your timeshare requires flying, that expense can vary with fuel prices and other factors. And if it costs several thousand dollars to get your family to and from your timeshare, you may not wind up using it every year.

Use It or Lose It

In most cases, the week you pick at the outset is the only one you get, and your unit will simply sit empty if you don’t show. That means if you have a last-minute emergency, or a must-attend wedding lands during the same time, you’ll lose your vacation that year. Often, immediate family members are allowed to take your place, but if unforeseen circumstances prevent you from going, your immediate family may not be able to get there either.

Selling Challenges

A timeshare property can be hard to sell because you’ll be competing with many other timeshare resellers, as well as new timeshare resorts in the area. To further complicate matters, contracts may stipulate that the management company gets a commission on your sale, or places other conditions on reselling. Some timeshare owners wind up selling their unit on eBay for much less than what they paid. They’d rather let it go for very little than continue paying the maintenance fees. (Of course, this can be a boon for buyers.) Plus, if you do sell your timeshare for less than you paid, the IRS doesn’t let you claim a capital loss as you could with regular real estate.

No Increase in Value

While a regular piece of real estate can grow in value as time goes by, timeshares are almost never worth more than what they’re sold for — and often, are worth less. Much of the price of a timeshare goes to marketing and advertising, management company business costs, and other miscellaneous expenses, rather than being an actual investment in the property itself.

A Long-Term (or Lifetime) Commitment

Most timeshare contracts are perennial. That means you’re legally obligated to pay the maintenance fee and taxes indefinitely. If you don’t, the results are much like defaulting on any other debt: collection agencies could come after you, and your credit rating will take a hit. It’s hard for most of us to predict what our personal situations will be in a decade or longer. You may lose your job or your spouse. Or, perhaps you’ll move and traveling to your timeshare from your new home may be more than you bargained for. None of this is to say buying a timeshare is a bad decision. It’s just a big decision — one you have to think through to make sure it’s right for you. Those who buy a timeshare impulsively, or from a high-pressure salesperson waving a fancy gift as enticement, often wind up regretting it.

Pro or Con

Main Pool at Legacy Vacation Resorts, Florida/zzdtravel

The predictability of a timeshare vacation can be viewed as a positive or a negative, depending on your outlook. Some people love that aspect of owning a timeshare. Falcone is one of them. “We have week nine in the calendar year. We really like to go away at the same time of year, around our anniversary,” she says. “We enjoy having something to look forward to. We’re all beach people who love Aruba. Plus, I don’t have to worry about availability. We like the pool level and an ocean view. I don’t have to worry about getting what I want when I want it. I have it.”

On the other hand, some people grow bored of vacationing in the same place year after year. If you’re one of those folks, you may be able to exchange your timeshare week for one in a different destination. Many timeshare companies — but not all — own properties around the world. Still, exchanges are not a given, and are easiest to nab if you have a highly desirable week and location. Lynch, who has exchanged her timeshare in Kissimmee, Florida (which she bought on eBay) for ones in other states, cautions that planning is required. “The week we have is at the height of the summer season, so we’ve had to book our exchanges well in advance as the premier resorts fill up fast,” she says.

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