Timeshare - is it Ever a Good Idea?

By: Neil Robertson

The timeshare industry is still going even after years of scandals and negative publicity. Does it deserve its bad reputation or does it ever work for people? Amazingly I found someone (not a timeshare salesman) who says it does work.

Timeshare - a Word Forever Tarnished

At the mention of timeshare, do you think of carefree holidays in delightful locations achieved at a reasonable cost? Do you think of saving money and boasting to your friends and relatives about how wise your investment in timeshare was? I suspect not! If you're anything like me the word timeshare immediately brings to mind the following:

  • High pressure sales
  • Being hassled when on holiday by touts
  • Losing money
  • High maintenance fees

A Unique Event!

Whilst enjoying a pre-Christmas dinner with friends one of them mentioned their recent break which, they unwisely told us, they had arranged using the timeshare that they had owned for 10 years. After having endured the usual amount of joking about their naivety they explained that, for them, this had been a good arrangement. They had enjoyed holidays at a number of quality UK locations over the years that they had owned the timeshare. They were happy with the annual maintenance fees. They had no reason to sell it and were perfectly happy with owning it. The normal rules of social behavior meant that I was unable to check the details (purchase price, annual fee etc.) but I think the fact that someone I know claimed to be happy with a timeshare was momentous enough to justify writing about it!

Can You Make Timeshare Work For You?

The most important point to note here is that my friends did not buy their timeshare new from a developer, but on the timeshare resale market. This is the only possible way that a timeshare can (sometimes) make financial sense. Timeshares are often sold for a tiny fraction of their new cost on the resale market. I once knew someone with connections with the timeshare industry who would quite happily market new timeshares to people. Of course the timeshare that he owned he had bought on the resale market.

Summary

The main things to consider when buying a timeshare are:

  • If you are thinking of buying new - DON'T. You will always be able to get it cheaper resale.
  • Check that the timeshare you are buying entitles you to swap it for stays at resorts in other locations of a suitable standard.
  • Check how much the annual fee is. Frequently if timeshares are on the resale market for a very low price it means that the annual fee is very high. Also check what the arrangements are for increasing the annual fee.

Do a sensible calculation of how much you holiday costs for the remaining period of the timeshare would be. Compare this against the capital cost of the timeshare (and don't forget to include the investment returns that you could get from this money) and the annual fee.

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