Hearing from disgruntled timeshare owners is no longer surprising. Timeshare woes are a familiar cry for help in today's society as more and more people continuously fall victim to the timeshare industry. But why? Why are we still falling for the same ol' sales shtick?
Perhaps it is due to some vacation properties' immoral presentation tactics used on the consumer. Once stuck in a room with timeshare sales representatives, the pressure and intimidation can ramp up. The salespeople aim to make you forget how flawed timeshares are so the resort can easily convince you to purchase one.
I'm here to let you know that no matter how they persuade you, most timeshare weeks are simply a bad deal through and through for many people. How so, you ask? Keep on reading and find out below!
Before jumping into the downsides of owning a timeshare, you must first understand how they operate. To do that, let's take a look back at their history. Timeshare companies took the U.S. vacation industry by storm in the 1970s and 1980s. At the time, these resorts offered something new to vacation goers, which was fractional ownership of a vacation house.
Here's how a typical one-week timeshare works: you pay an upfront cost for the initial purchase and then take responsibility for future incurring fees. You are granted access to the vacation property for a specified time, typically the same week each year. Sounds promising, right? Since then, the average timeshare price has risen dramatically while the resorts have seemingly become less accommodating.
According to the American Resort Development Association (ARDA), today, timeshare resorts are a billion-dollar industry. Alas, they make their money by entrapping unsuspecting clients into unfair arrangements that lead to fear, humiliation, and debt.
Are timeshares a rip-off? Now, if you are like most other owners out there, then you probably want to know precisely why timeshares are not a good investment. Not to worry, as we have compiled five of the most common issues that timeshare buyers eventually encounter. Here are the top reasons timeshares are a bad investment:
Did you know most timeshare agreements never end? You are likely signing a lifelong financial arrangement that will take thousands of dollars from you on an annual basis indefinitely. You cannot escape this burden even when you pass away, as the responsibility falls onto your heirs or descendants.
I doubt many owners would have gone through with their original purchase if they knew their agreement was in perpetuity.
Remember how great an investment the salespeople told you a timeshare would be? Buyers soon realize it is nothing like any other real estate property because it lacks real value. Calling a timeshare a bad investment would be an understatement.
Despite how salespeople paint the picture, the truth is these properties are not investments. There is no monetary return from timeshare ownership. The main person that benefits from a timeshare transaction is the seller. That's correct; when the transaction goes through, the seller benefits while the buyer is left oblivious to what is truly happening. Furthermore, timeshares lose value from day one. Take a look at the market for timeshares now, and you'll see how little resale value they have.
When you initially purchased your timeshare, salespeople might have led you to believe it would generate extra income for you. Unfortunately, this is rarely true. The only way to personally rent out the property is if you have deeded ownership. Even then, don't expect much. Considering how expensive the average timeshare is, it's challenging to recoup one's annual cost of ownership through renting - nevertheless, turn a profit.
Many owners attempt to sell their property units but rarely succeed. Unfortunately, timeshares lack resale value, making the secondary market a disaster. Wildly, the resale market gets flooded by timeshares selling for pennies on the dollar.
Timeshare resorts are expensive. The purchase comes with a hefty price tag, no matter how much the sales representatives sugarcoat it. Add on the fact that there are other costs besides the upfront price. Quickly, timeshare ownership becomes a financial burden.
According to ARDA, the average sticker price for a timeshare is more than $20,000. Timeshare salespeople attempt to downplay this expense by encouraging buyers to take out a loan. Furthermore, timeshares have additional costs beyond their initial purchase price. These unexpected costs can equate to thousands of dollars. Find out the actual price of a timeshare here:
Unbeknownst to the buyer, these agreements typically include an annual maintenance fee. These fees vary widely but go towards regular resort upkeep - such as cleaning and maintenance repairs. The downside to these fees is that they rise each year. Making matters worse, they never end. So while you may eventually pay off your timeshare mortgage, the maintenance fee bills will keep coming. The average cost for annual maintenance fees is currently $1,000 and rising.
Another cost that often gets included with a timeshare purchase is a property tax fee. Depending on the property tax laws in the state of the resort, you could end up paying quite a bit in taxes alone. Unfortunately, timeshares are seen as real estate when it benefits the resort company. Sadly, those benefits rarely get passed along to the actual owner.
Remember, visiting your favorite vacation destination is not cheap. Even with a timeshare unit, many other unexpected expenses go into planning vacation time. Extra commodity and commuting costs are standard at timeshare properties, and several other miscellaneous expenses such as exchange fees only hamper an owner's experience. Furthermore, additional expenses come with selling the property if you go that route.
There are many poor components to timeshare ownership. And, to make matters worse, resort companies often exaggerate or lie during their sales presentation. Do you remember that first timeshare presentation where salespeople urged you to purchase a timeshare? Those salespeople most likely promised you immense savings by using a timeshare versus a hotel. Have you seen those savings materialize over the years? Probably not. Once you account for the actual cost of a timeshare, they are not the financial investment salespeople tout them as.
With everything on the table, it's clear a timeshare is a bad deal. Some even call them timeshare scams. While it can bring convenience and stability to vacation goers, it cannot be taken seriously as an investment. If you are looking for a money-saving route for a lifetime of vacations, look elsewhere. If you have already gotten entrapped in a timeshare deal, consider canceling your agreement with the timeshare developer.
Wesley Financial Group, LLC ("WFG")* is a pioneer of the timeshare cancellation industry and one of the leading exit options for those misled into owning a timeshare. With a team of experts and a rigorous qualification process, finding a more trusted and reliable company in the industry is challenging. Reach out to us today to see if we can help you exit your agreement.
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 and not intended to substitute for professional advice, legal or otherwise.