I won’t speak for all timeshares, but I have not found one that made financial sense to me. I’ve gone to about 6 pitches in my lifetime and they just don’t add up.
The biggest reason they don’t add up is all the fees. Sure, a $25K timeshare that you can use one week a year for 50 years makes sense in a vacuum. $500 per week is pretty sweet as far as resorts go.
However, make sure you bring a pen and paper with you to these meetings because you’ll want to start adding up the extra costs. They either forget or quickly disclose and never bring up again some of these fees:
“Maintenance Fees” are a fee you pay each time you want to use the place. They say it’s for things like renovations/cleaning and also mention that these fee’s only apply when you actually use your week. So if you never use your timeshare, you’ll never pay these fees. Or in other words, they’re going to charge you extra for using the thing you already paid to use in the first place. “Not a big deal I guess, the cleaning lady needs to get paid.” And then you see the amount. I’ve seen numbers between $500 – $750 (PER USE). That’s correct, double your investment right off the bat.
Your fee obviously doesn’t cover the taxes that you’ll have to pay. I cant recall the taxes off hand so I’ll ball-park it at $100 per use
Many timeshares are a part of exchange programs so you dont have to stay at the same resort everytime for the next 50 years (common ones include RCI and VI). There’s a yearly fee on that for being a member of the program. Let’s call it $50 per year.
If you actually plan on using the RCI/VI membership you enrolled in, be ready to pay a fee for that. Add another $100 for the ability to trade your room for another each time.
Exchanging rooms works on points. Your resort room in the month of April is worth X points, the resort for the room you want in the month of June is worth Y points. If X < Y, you have to pay the difference. If X > Y, oh well, you lose those points. I won’t count both the extra cost of you paying the difference (since it varies widely) NOR will I count the extra time you have to spend learning how this system works (and keep in mind that the rules change every year).
Can’t use the week you bought this year? Don’t worry, you can save it and just use two next year. Just give us $50 first.
You can only take one week next year? All good, pay us another $50 to stash that extra week again. Just don’t forget, we arbitrarily made a rule that says we won’t stash a week for more than 2 years. We also made a 2nd rule that says you can only use your stashed week after you used your actual week for that year. It’s ok, if you can’t take two weeks off this year, why don’t you let us try to sell the week FOR you so you can MAKE money off of this (this actually happened to my family).
Oh right, that’s going to be another $100 fee for us to sell it for you. Plus, we’re going to keep some of the profit. And because somebody technically used it, you still owe us the maintenance fee. Good news is that we were able to sell the room and we sold it for $1000 so we can give you half of that. Just enough to cover the maintenance fee! It’s almost as if you didn’t even lose money. Just the week itself (and the fee)!
Don’t forget all the tipping you’ll be doing for the cleaning staff (don’t worry, that isn’t covered in your maintenance fee like I said earlier), waiting staff, resort staff, etc. I won’t estimate this because that depends on your own personal preference and ultimately, is something you’ll experience even if you dont use a timeshare.
So ultimately, after you pay:
- $500-$750 Maintenance Fee
- $100 in taxes * $50 in RCI/VI membership fees
- $100 if you want to try a new place out this year
- $100 if you need to “bank” a week for next year
- $500 / year from the original contract
Your week can range from $1,250-$1,650 just for the room. That’s before any of the taxes, dinners, transportation, fun money, etc.
Plus, the headaches that come with learning a system that is designed to take advantage of you for not paying attention and is constantly changing without warning.
So when the folks there try to show you how this is a cost effective way to vacation, remember the details/games/gimmicks that these companies hide in order to convince you.
My family has been, unfortunately, sucked into a few (yes, more than one… my dad is frivolous) of these schemes. One tip is that when you return to your timeshare next year. Don’t be fooled by the “Owners Meetings” they try to get you to attend when you check-in. It’s the exact same thing. They’ll tell you “This is not a sales presentation, we just want you to know all of the amenities/offers available to you as an owner”. You can say no, but remember that they will keep asking. They will slip a note under your door the next morning. They will call you the day after. They will ask you again anytime you go up to the concierge to book an activity.
Just keep saying no. Don’t be fooled, it’s the same thing under a new mask.