The Pros and Cons of Timeshares

Written by: Haley (she/her)

4 min read | Published: November 28, 2024

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Buying a timeshare is an expensive purchase. It’s important to think about why you want a timeshare and how it will fit into your lifestyle before moving forward with a purchase. In addition, considering the pros and cons of timeshares is critical to making the best choice for you. Read on to learn more so you can feel confident in your final decision of whether to buy a timeshare.

Types of Timeshares

There are four types of timeshares:

In a fixed-week timeshare, the buyer owns the rights to a particular unit for the same week every year for as long as the contract outlines.
With a floating timeshare, the buyer can reserve their own time during a given period of the year. This is more flexible than the first option, but there can be lots of competition for popular times of the year, so it may be tricky to get the exact time you were hoping for.
In a right-to-use timeshare, the buyer leases the property for a given amount of time each year for a set number of years. In this case, the developer owns the property.
Lastly, there are points club timeshares. This is like the floating timeshare, although buyers stay at various places depending on the number of points they have from buying into specific properties or purchasing points from the club. The points are used like currency, and time slots at the property are reserved on a first-come, first-served basis.

Mull over which type may be best for your lifestyle and travel goals, and then consider the general pros and cons of buying a timeshare.

Pros

One advantage of timeshares is you only pay for what you use. Another advantage is that if you love a particular destination, you can visit again and again. You can also trade times and locations with other timeshare owners if you want to change it up. Some timeshares also allow you to rent out your block of time if you can’t use it. Make sure to review your contract carefully before signing if this is a feature you want to have access to. Another perk of timeshares is you can often allow friends or family to use it too, either for free or for the same price you would normally pay to use it.

Cons

Although you aren’t in charge of regular maintenance for the timeshare you own, you will have to pay annual maintenance fees. These fees are subject to annual increases that you have no control over. According to Howard Nusbaum, CEO and president of the American Resort Development Association, the average annual maintenance fee for a timeshare is $660. You are required to pay the annual maintenance fee regardless of whether you use the timeshare. You may also be expected to pay special assessment fees, which are additional charges on top of annual maintenance fees to cover expenses like storm damage repairs, upgrade costs or other unforeseen expenses. If you don’t pay all the required fees, the developer can foreclose on your timeshare.

In addition, timeshares are difficult to sell, and used timeshares are typically sold for much less than you originally paid because there are so many on the market. It may be better to buy a used timeshare rather than buy a new one. If you’re buying a used timeshare or selling your timeshare, be mindful of fraud attempts such as timeshare reselling schemes, so you can protect your finances effectively.

It’s important to note that if you sell your timeshare at a loss, the IRS doesn’t let you claim a capital loss as you could with other investments and property. Another disadvantage of timeshares is there are different rules and regulations related to where you buy your timeshare. For example, if you buy a timeshare in another country such as Mexico, there are specific rules about foreigners holding the title based on where the property is located in relation to the coast and international borders. There are also different consumer protection laws depending on the country in which you purchase your timeshare.

Tips for Potential Timeshare Buyers

Before making your final decision, consider a few more tips for potential timeshare buyers:

First, it is important to think of buying a timeshare as a lifestyle purchase rather than an investment. The value of your timeshare will depreciate over time, there will be travel costs and maintenance fees involved, and you don’t know how much you’ll use it each year.
Next, look at your budget to ensure you can afford the initial purchase, annual fees and travel costs over time. If you must borrow money to buy a timeshare, you probably shouldn’t be buying a timeshare.
If your financing is squared away, the next step is to think about your vacations over the past few years to determine if buying a timeshare truly makes sense for your lifestyle. Have you traveled to the same place for most vacations, or have you traveled to a variety of places or gone on different kinds of trips like camping, skiing, flying to another state or country, going on a cruise, etc.?
Finally, if you are still considering buying a timeshare, pick the type that will work best for you and make sure to do a walkthrough if you’re buying a specific unit before paying any deposits. Also keep in mind that you will have more protection if your timeshare unit belongs to an owners’ club or association.

Buying a timeshare is an expensive purchase, and there are lots of pros and cons to consider before going through with it. Do your due diligence in researching the specific timeshare you’re interested in, touring the unit, if applicable, and carefully reviewing the contract before signing. Having the information you need will help prepare you to make the best decision based on your financial goals, and your lifestyle and travel aspirations.