Time Shares are a Purchase, Not an Investment

Truer words were never spoken:

Time shares are a purchase, not an investment.

A Bankrate reader recently asked about purchasing a time share for $20,000 for one week's worth of vacationing and wanted to know if this was a good investment. Here's what Bankrate said:

I don't think you should look at this purchase as an investment. Regardless of how you feel about fractional ownership or time shares, it's rare for them to perform well as investments. Take a look at the resale market for fractional ownership in your vacation spot and that should show you why these purchases aren't good investments and demonstrate a way to buy in without paying primary market prices for the weeks you want.

Don't forget to consider the maintenance fees, property taxes and other annual costs associated with this purchase. You also have to place a lot of trust in the property manager to keep up the place and protect the value of your purchase.

My advice is to be very cautious before buying.

My advice is don't buy! Unless you really, really, really love doing the same thing in the same place and you really, really, really know/trust the owners/managers of the property and you really, really, really have more money than you know what to do with, then I'd say you should pass on the time share idea.

We have friends who recently bought into the Disney time shares and seem to like them. Disney may be an exception to the rule, but even with their time share, like others, the cost is very high for what you get.

Anyone out there own a time share or know someone who does (or did?) Any stories to share? I'd love to hear if anyone bought a time share and then sold it some time later for a profit.

Comments

[Eric G.]

I have family friends, that purchased a timeshare at the Mayan Palace in Nueva Vallarta and it has been an absolute nightmare.
But I have another pair of family friends that bought a time share in Colorado with Hilton, and have absolutely loved it. They have been able to trade weeks consistently and have used their points to travel to Las Vegas, Hawaii, and Orlando. No complaints from them whatsoever.

I for one, would never, ever buy a timeshare.

[GeckoGirl]

Timeshares rarely (if not, never) appreciate in value. That said, buying a timeshare works for some people. The first rule would be to NEVER buy new, no matter what they offer you. You can buy that same timeshare on the resale market for less than 50% of retail. Also, the old-fashioned fixed week timeshares have put a bad taste in everyone's mouth. However, the newer point-based timeshares (i.e. Hilton, Marriott) that the previous commenter mentioned are much better. You are not locked into a particular week or location. However, even then, timeshares really only make sense for people who travel extensively.

[Matt Wolfe]

My parents actually bought a timeshare in Cabo San Lucas and they actually love it. They bought it probably 8 years ago and have traded it all over the place. They've used it in Hawaii, Florida, Boston, and a few other places. I wouldn't personally ever get one, but they seem to love it.

[Blaine Moore]

My folks have a time share that they can use pretty much anywhere in the world, although they need to reserve the weeks they want well in advance for most places. They have been happy with it, and on years that they can't use them (they get two weeks each year) they have been able to give them to others for weddings and such.

[Ryan]

One of my coworkers has 2, not by choice, but because his wife bought them before they were married. The maintenance fees alone are $800 for the 2 of them. He'd dump them, but the selling a used timeshare is alwasy a loss.

[Bronco]

OK, here's a story: 2 years ago I stayed at the Mayan Palace in Puerto Vallarta (friends timeshare). The whole town is crawling with people trying to sell you a timeshare-- it became a bad joke. Needless to say I was able to resist the "temptation."

A month later my neighbor was just about to take a trip to PV and I told her, "make sure you don't buy a timeshare!" Well, the first thing she tells me upon returning from the trip is that she bought a timeshare at Mayan Palace.

A couple of days later the buyers remorse kicked in and she tried to back out. She even got a lawyer involved. Ultimately she was not able to get out of the contract...$17 grand... what a waste.

OH COME ON NOW!!! TIMESHARES ARE THE BEST INVESTMENT YOU CAN BUY!!! THEY ARE JUST GREAT FOR THE SELLER!!! LOOK AT ALL THE MONEY THEY ARE MAKING!!! HAHAHA YOU STUPID PEOPLE, GO ON A TRIP AND THINK YOU HAVE TO HAVE EVERYTHING, THEN YOU CRY WHEN YOU GET HOME AND SPEND MORE MONEY ON A LAWYER. OH BOY, WHAT A GRAND VACATION THAT WAS!!! STUPID, STUPID, STUPID...TO BUY A TIMESHARE NEXT TO AN OCEAN AND THEN BUY A SHARK (LAWYER, EXCUSE ME) TO PUT IN THE OCEAN...SORRY, ALL I CAN DO IS LAUGH AT THE STUPIDITY HERE!!!

[stacey]

My partner got stuck with a timeshare that her ex-husband purchased before their divorce. We've been trying to sell it for near peanuts for more than 2 years. We don't use it, we never will. My advice would be, only buy one if you're really going to use it and it's going to save you money on lodging. We spend $400/year on maintenance fees--it's like putting the money through a paper-shredder since we don't use the timeshare.

[kitty]

I've always thought time shares is a way for you to go to a presentation about buying them, get the reward for showing up and then say "no, thanks". I'd only do it if the reward is worth it though: a discount on tour tickets in Hawaii wasn't worth my time, but a couple hundred dollars that a couple of friends of mine got in Las Vegas might be. My friends were honest, told right away that they weren't planning to buy and were only there to get the reward for showing up. The sellers said OK - I guess they were confident of their power of convincing. I wonder what percentage of people who show up to get the reward actually buys.

Personally, I've never understood the attraction. Why would I want to be restricted in vacation choices? I don't know what I would want to do next weekend, how can I be sure how I'd want to spend my vacation 5 years from now?

[Rob]

My parents bought one about ten years ago. They certainly aren't for everyone because of all the fees and such. Basically, if you aren't going to use it every year, it probably isn't worth it. But my family did use it every single year and my parents would do the trade thing - use their "points" or however it is figured out and go somewhere else other than where they bought. We had some great family vacations because of it. But they certainly didn't buy it as an investment.

[Harrison]

I have a friend bought this timeshare from a local famous travel company in my country. The travel company is famous and reliable. However, I found that the list of hotel he can choose is limited and the list seems like doesn't grow at all from the last 3 years. I think you are right that only buy the timeshare if you really really really really want to go to the same place same hotel again again and again. Huh....