Were timeshares ever popular? Affirmative. And one could argue they still are. Today, the timeshare industry is worth more than ten billion dollars. Almost ten million U.S. households own at least one timeshare. That means more than 7 percent of households!
Indeed, timeshare ownership is still popular, but the cracks in this system become more apparent with each passing year. While timeshares continue to reach new heights on the business side, they face more criticism in the public eye. Find out why a timeshare may no longer be worth your time or money below.
Timeshare companies first appeared in the U.S. during the late 1960s, offering a new type of vacation ownership. Shared ownership of a vacation property. Instead of buying a vacation home and bearing the year-round costs, you could buy a week to spend at the same property every year. A niche market initially, timeshares would soon flourish.
By the 1980s and 1990s, timeshares had skyrocketed thanks to added benefits and several large hospitality chains getting involved. The inclusion of larger corporations helped verify the credibility of timeshares for many. And the new benefits opened up the timeshare experience to new customers by providing more flexible options. Timeshares haven’t looked back since.
Here's how buying a timeshare works. You pay an upfront cost and annual fees to a timeshare company. In return, you receive access to a specified property at a specified time of year, often the same week each year. They later added benefits that made it possible to choose different locations and weeks. It sounds good in theory, but timeshare properties have not appeared to progress since. At least according to the timeshare owners.
Many timeshare owners are pleased with such a purchase. However, more stories abound about buyers feeling pressured by timeshare salespeople and now trapped in a bad deal. Everything announced in timeshare sales pitches might not be accurate. Below are a few examples of why timeshares have been waning in popularity:
Nothing is worse than a bad first impression. That's what a timeshare presentation does, though. These sales presentations are how the timeshare industry lures innocent people into timeshare purchases. Timeshare vendors are well-known for using deceptive tactics and misleading information to boost sales. Sitting through one of these multi-hour-long presentations and being pressured non-stop is not an ideal way for anyone to purchase a vacation home.
Buying a timeshare isn't easy. The salespeople push hard for sales, and they start by asking for lofty prices. According to the American Resort Development Association (ARDA), the average price for timeshares has grown by over $22,000. It got so expensive that many timeshare purchases require financing.
The issue with that is you're not buying an actual piece of property, so qualifying for a traditional mortgage is likely out of the question. Since banks and mortgage lenders don't finance timeshares, you have two options. Take out a loan from the timeshare developers or use a credit card. Either way, you face atrocious interest rates that could double the initial cost.
The cost of timeshare ownership doesn't end there. Paying off a timeshare never ends when considering the annual fees. Every timeshare owner must pay maintenance fees as long as they retain ownership or risk foreclosure. The fees go toward regular cleaning and upkeep.
Not maintaining the property yourself has often been deemed a perk, but that's without the cost of annual fees. ARDA studies show the average annual maintenance fee for timeshares is $1,000. The worst part is these fees increase by around 5% or more each year. Many longtime owners get to the point where they can no longer afford these costs and suffer the financial consequences.
Timeshares fancy themselves as real estate, but they fail to deliver on a critical component—the timeshare's worth. Buying real estate is often seen as an investment. Therefore, having resale value is pivotal for any real estate purchase. With timeshares, that's not the case.
If you're looking for real estate to serve as a financial investment and generate income, timeshares shouldn't be on your radar. A timeshares value depreciates the moment you sign the dotted line. With terrible financing options and fees increasing, timeshares often become the opposite of an investment.
Points-based timeshares are more popular than ever. The idea for a points system is to give owners more scheduling flexibility. Gone are the days of timeshares being on a fixed week at the same resort every year. Points can be exchanged at different locations and at any time of the year, but there's a catch. These points sometimes defeat the purpose of timeshares.
Timeshares began as a way to combat the rising inflation of hotel expenses. And what points-based timeshares suffer from? Inflation! It may cost 100 points to visit your favorite location this year, but next year it could be 200 points. The timeshare developers control the annual point quotas, yet they continue to allow inflation to cause their clientele the same problems that hotels do. So how are timeshares better than hotels?
Stepping away from a timeshare agreement is not as easy as stepping into one. More times than not, timeshares are lifetime agreements that are difficult to escape from. Why? Because as long as you remain a timeshare owner, the resort can continue to collect fees off you every year. That is why a timeshare purchase has such a short rescission period and why the resorts are reluctant to help clients get out.
The two most common timeshare exit options are selling or renting it. Neither are too promising or profitable. Rental income from timeshares is minuscule compared to what you still have to pay. And the timeshare resale market is a nightmare with properties listed as low as $1 and filled to the brim with scam opportunists. If getting rid of a timeshare was as easy as buying one, there'd be fewer owners remaining.
Timeshares shook up the travel industry when they first appeared. However, in recent years, timeshare resorts no longer have that unique mystique that brought them into the spotlight. There are plenty of alternatives to choose from:
While getting rid of your timeshare is difficult, it doesn't have to be impossible. Sometimes, you just need a little help! That's where timeshare cancellation companies come in. The timeshare cancellation industry started due to many unhappy owners looking for a way out. Now, breaking free from your timeshare company is easier than ever.
Wesley Financial Group, LLC (WFG) is a pioneer and leader in timeshare cancellation. WFG helps those who have been lied to or misled into purchasing. With over ten years of experience, they’ve canceled over 16,000 timeshares and eliminated nearly $300,000,000 in mortgage debt. To learn more about timeshare cancellation, schedule a free consultation with WFG today!
*Wesley Financial Group, LLC, and its affiliates, successors, or assigns are not lawyers or a law firm and do not engage in the practice of law or provide legal advice or legal representation. All information, software, services, and comments provided on this site are for informational and self-help purposes only and not intended to substitute for professional advice, legal or otherwise.