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Are Timeshares Worth It?

Owning a piece of a vacation home sounds perfect, doesn’t it? A place to call home and visit again and again. And you might think about buying a timeshare to make this dream a reality.

Press pause on that purchase for a moment. Maybe you’re wondering to yourself, are timeshares worth it? Is this contract a good idea? Well, we’ve got six very good reasons to avoid this real estate trap.

What Is a Timeshare?

First off, here’s a quick definition: A timeshare is a vacation home you buy the right to use for a set period of time each year (called an “interval” and usually five nights) over a set period of years (sometimes five, but usually way longer—as in 20 to 99 years!).

Yes, 99 years. Aka you’re saying you want to vacation to the same place for five nights once a year for the rest of your life. (Unless you sign up for the more complicated timeshares that allow you to try different destinations in that resort’s participating locations. But you’re still locked into that approved list.)

This is already feeling off, but let’s talk about those six reasons timeshares really aren’t worth it.

1. Timeshares Have No Investment Value

So the average price of buying into a timeshare is a whopping $24,140.1 You’d think for that much money you’d get something substantial in return (besides one week a year away from it all), right?

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Well, here’s the deal: The timeshare has no real value to you, because you don’t own anything in the normal sense of the word. You “own” the ability to vacation in this spot for a week. But the property isn’t actually yours. It’s not like your regular home, which likely has some equity built up, making it a great investment.

In fact, a timeshare goes down in value from the moment you sign the contract. This is not an investment strategy

2. It’s Nearly Impossible to Resell Timeshares

Remember, this property is really worth nothing to you, other than a secured spot for your vacation, which makes timeshares difficult to sell. Seriously—eBay is full of timeshares on sale for as little as one dollar! A one dollar return on a $24,140 purchase? Hmm. Sometime doesn’t add up here. Literally.

It’s all because you’re trying to sell something that comes with a lot of baggage. And we don’t mean the cool, full-of-souvenirs-to-bring-home-from-your-vacay kind of baggage. We mean junk like rising annual fees (yeah, that’s the next point we’ll get to).  

So, when that timeshare salesperson tries to convince you that you’re buying a little piece of this home, remember they’re conveniently skipping the fact that you’ll most likely be stuck with it for life. And if you do manage to get rid of your timeshare, you’ll probably lose thousands of dollars in the process.

3. Timeshares Come With Rising Annual Maintenance Fees

Once you’ve bought a timeshare, the payments don’t stop there. You’ve still got annual timeshare maintenance fees to pay (to cover the operating costs for the resort). Because your $24,140 wasn’t enough, obviously.

In 2021, annual maintenance fees averaged $1,120 a year.2 For fees. (Um, you could just rent a place for a week for about that same price. Just saying. No $24,140 involved.)

And that maintenance fee cost isn’t fixed. Nope. It went up 2% from 2017 to 2018, and then there was a 12% hike from 2018 to 2021.3, 4 If that 12% hike happened again, you’d be paying $1,250 a year in fees by 2024.

So, the value of your timeshare doesn’t rise, but the cost of maintaining it does? No, thank you.

4. You’re Paying for Timeshares When You’re Not Using Them

Let’s say, for whatever reason, you don’t plan on using your timeshare this year. Maybe money’s tight—because you still have to drive or fly there, after all. (That’s not covered under maintenance fees.)

Or maybe you hear about a new vacation spot you want to visit—instead of the same place you go every year for 99 years.

The thing is, you have to pay for those pesky maintenance fees whether you use the space or not. That’s a thousand dollars or so that could have gone toward booking your trip elsewhere—or whatever else you want your money to be doing instead this year.

If you do decide to travel somewhere else, you’re basically getting one vacation for the price of two. Again—no, thank you.

5. Timeshares Are Not Easy to Rent

What if you want to skip your week at the timeshare this year and try renting it out instead? Good luck.

Many companies simply don’t allow it. And if they do, there are rules and restrictions in place. You’ll pay a fee, and the company might take a commission from you.

Why? Because they’re your competition. They don’t want someone renting your timeshare. They want someone purchasing a different timeshare from them!

Also, you’ll have to pay a cleaning fee once your guest has left. And you might be charged a fee if the guest causes damage to the property.

The costs just keep rising.  

6. Don’t Forget Those Timeshare Loan Interest Rates

Most people don’t just throw down $24,140 in cash for their timeshares. And the salespeople know that, so they’re at the ready to help you get into debt to make the sale. So kind, right? (Um, no.)

They might encourage a short-term personal loan. That’ll come with an average interest rate of 8.73% over two years, though.5 Or they might work for a company that offers financing, but those are typically even higher.

The deeper you look, the more expensive this gets.  

Timeshares Don’t Add Up

Okay, let’s look back at all these numbers now. You take out a two-year personal loan with an 8.73% interest rate to buy a $24,140 timeshare that you have to go to every year. For 99 years.

You pay $1,120 in maintenance fees the first year, and that number increases each year. But to make math easy, let’s pretend that fee never goes up. You’d still be out $37,596 after ten years.

Ten years of going to the same vacation spot without the ability to build equity and sell the dang thing with a profit. And that doesn’t count the travel, food and fun expenses for the week either.

The person pitching you this “deal” isn’t going to mention any of that to you. It’ll be spun up as a steal—because that’s what sneaky sales tactics do.  

Timeshares are a scam. For so many reasons. Stay far, far away from signing that dotted line.

And while you’re at it, stay far, far away from other money traps too! Check out the new lesson in Financial Peace University called Wise Spending, where you can learn how to avoid the schemes of marketers and salespeople—and then watch all the other lessons to learn how to make the best decisions for your money.

Because you work hard for your money, and you should be able to play hard too—but not at the expense of your financial future.

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Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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