I’ve heard this question many times, particularly when friends have just returned from vacation: “Are Timeshares Good Buy?” In more than a few occasions, my friends had already purchased the timeshare and were just looking for positive re-enforcement for their impulsive purchase! Their are options to taking cheap family vacations that should be looked at before you find yourself sipping a daiquiri at a timeshare presentation.
I guess the answer is that is really depends. First of all, a typical timeshare is going to cost you between $10,000 – $20,000 upfront which can be financed at a pretty high interest rate (and the interest is no longer tax deductible). You will also need to pay an annual maintenance fee of between $500 – $1000. Lastly, you had better like the resort where you purchased your timeshare because finding available timeshares at more exotic timeshares at the dates that you want can be very difficult and may cost you more money. If your kids have grown and you would rather go to Maui instead of Disney World, prepare to be flexible and patient!
Another option that we are seeing more and more, particularly in the poor economy, are discount vacation clubs. They typically charge an upfront fee of anywhere between $1000 – $10,000 but you never have to pay again and you have the membership for life. In addition, the attraction of the discount vacation club over the timeshare is that you are not limited to certain weeks each year, or certain resorts. The world is your vacation option, and you have the option of cruises and all-inclusive resorts as well. Plus, you don’t need to feel stressed if you miss a year because your membership is already paid for in full. The last advantage that I see with the discount vacation clubs is that they have re-sale value. In fact, their value will at least remain at what you paid for it should you decide to sell.
In my opinion, timeshares are no longer a great buy. You have options that are much better. I know that it’s tempting when you are on vacation and get an offer for a free breakfast and round of golf if you attend the timeshare presentation. You are not obligated to purchase anything. Well, I know 2 different couples who own 2 timeshares each in the same areas in Florida. Those presentations can be very persuasive while you’re relaxed and enjoying your vacation. It’s not so relaxing when you’re back home making those monthly timeshare payments wondering what you got yourself into!