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When you hear about some “opportunities”—reverse mortgages, car leases, quick profit, good debt—you should automatically run away as far and as fast as you can. Here’s another one to add to your flight reflex: timeshares. I know, all the commercials and presentations make timeshares sound like a great investment. But they’re not. They’re a horrible waste of your money.

What Are Timeshares, Exactly?

A timeshare is a vacation property (think really tiny apartment) that you share with other people who have also forked over the big bucks to participate. With the money you “invest,” you get to spend a week (or more) at that property each year. They’re usually found around popular resort spots (think Disney, Mexico, Virgin Islands, etc.). The average timeshare costs approximately $20,000 for about 20 years of use. On top of that, you’ll pay around $650 in maintenance fees every year—even years you don’t use the unit.

It Sounds Good . . .

If the deal sounds good, the sales rep has done a great job. You probably heard things like “investment” and “prime location” and “all the amenities” and a bunch of other jargon. And you probably saw amazing pictures of the property and of people having a delightful time. But that’s all part of the marketing. The timeshare industry is an $8 billion machine, so they know how to pull you in!

But It’s Not Good

You’ll hear lots of garbage about a timeshare being a real estate investment. And that’s what it is—garbage. If you pay $20,000 for a timeshare, it’s immediately worth about $10,000–12,000. That’s a bad investment in my book—and my checking account. An investment is supposed to make money for you.

With a timeshare, you are prepaying your hotel bill—for the next 20 years! And that’s assuming you take a vacation every year and that you want to go to the same place every year. Every stinking year. You’d better love that place. And you’d better hope your entire family loves that place as much as you do. Oh, and forget about selling it. They rank up there with crocheted toilet bowl covers.

After those 20 years, what can you do with that timeshare? Sell it? Nope. Rent it out? Nope. Your contract just expired. You have zero equity built up. Money gone with nothing to show for it but pictures and cheap souvenirs you unloaded at a white elephant Christmas party.

The Alternative

If you kept your money in a mutual fund that earned you 10% over 10 years, you’d have over $50,000. Keep it in there for 20 years and you’d top $130,000. If you stick to your retirement dream and leave that money alone for 40 years, you’d have over $900,000. That’s a lot of money! Now imagine adding that with all of the other money you’ve saved for retirement in those 40 years. You could go anywhere you wanted—no strings attached!

Now do you see why timeshares are just a terrible, horrible, no good, very bad idea?

If You’ve Already Been Caught

If a sales rep has already hooked you into a timeshare, my advice is to get out—as soon as possible. It’s better to cut your losses now and recoup some of the money. Don’t live with this mistake for the next 20 years.

Let me be clear: You’re going to lose money on this deal. Timeshares lose value quicker than cars. The goal isn’t a profit. The goal is freedom from the noose of the property itself, the annual fees and upkeep, and the blackout dates. And the list goes on.


  • Doubtno78

    As someone who owns a timeshare I’d have to politely disagree with you on some points. I don’t disagree with the hefty price tag. But there are some ways around it. I bought my timeshare at a very high end resort in Orlando about 15 years ago. But I bought it as a resale for $1500. I do pay maintenance fees every year but it’s not on a really tiny apartment. It’s on a two bedroom two bath condo that’s roughly 1200 square feet with a full kitchen and balcony. As a family who travels every year we have saved thousands of dollars. Because we not only can stay in a place like this for less than the cost of a two star hotel for the week but we can also exchange our week through RCI or interval international which sometimes gives us two or three trips for the value of our one week in Orlando. In addition the exchange networks frequently offer extra vacations to go stay at 5 star resorts for sometimes just a couple hundred dollars. So minus my initial investment my family of six can take one or two vacations a year for around $1000 including food and entertainment (not including travel which we normally drive). We can eat in our condo and save money as well. So depending on your research and choices it can save you a lot of money and make family vacations affordable.

  • Christina LoNigro

    I’m sorry, but I think the author has no idea how much timeshare has evolved. I love my timeshare, and I go to many many places that I would not normally would have been able to afford to go.

  • Jeremy89

    My parents purchased a time share through Disney and it was a wonderful investment since we continue to go there year after year. Running the numbers, it saves them about 70 percent over paying the regular room rates at those properties. Particularly now that the US dollar has jumped way up compared to some other currencies, they’ve really been able lock in affordable vacations in Disney for years to come. They have also had ZERO trouble renting out the points at a profit to others and there is quite a bit of flexibility built into that program. I agree not all time shares are great deal and if you aren’t absolutely sure you want to return to that spot year after year, it’s not worth committing so much cash up front. But it truly can be a win-win for certain families and not an irresponsible decision.

  • Brian Murphy

    If anyone is considering buying into one of these deals, please research very carefully. I have dealt with this problem on behalf of someone else and it is a nightmare that only ended when I threatened litigation. Ethically, many of the salespeople are below used car salespeople. In fact, a number of former salespeople have started a cottage industry where they have you pay them to take the timeshare off your hands. Great product if you have to pay someone to take it. I have seen a number of very skilled people who buy up the points for next to nothing and can practically live for free in these places. They have it figured out. There are those who will defend timeshares to the end, and boast about how much they are saving by spending. To each his own. But never think you will save money or that you are “investing” with one of these.

  • Amy Kovach

    I think this should be rewritten to say that buying a timeshare NEW is a trap. I bought one on eBay for $300. It is an alternate year unit, so the annual fee is half, but the unit banks as a double so we can use it every year. We have traded to places we otherwise could not have afforded and save a ton by cooking in the unit rather than dining out. I have given weeks to my parents and children as well. In my estate I am going to gift it to my children with an investment account whose interest will pay all fees. I love Dave and generally agree with everything, but this has been very good for our family.

  • Terrie Runnels

    Chris, I would like to find out how to GET OUT of a timeshare that we have had for 15 years.

  • jbooninbucksco

    I would also like to respectfully disagree. Perhaps some are schemes and horrible investments, but we are with Marriott and have absolutely loved ours. No, it is not cheap, but for two type A people who do a great job of saving and investing, it has forced us to take vacations, go places, and plant memories that will last forever. Marriott does an excellent job and we have no regrets. Deal me in.