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Real Estate

Are Timeshares a Smart Investment? 

Are Timeshares a Smart Investment?

The timeshare concept sounds awesome – a guaranteed vacation every year in a spot that you love! And they’re undoubtedly popular. Around 9.9 million American households own one.

Ask any timeshare salesperson, and they’ll tell you they’re the best thing money can buy. But the question is, can you ever really consider a timeshare a smart investment? 

Let’s take a closer look at the answer together.

What Is A Timeshare?

A timeshare is a scheme that allows you to either share ownership of a vacation property or buy rights to use it each year.

You’ll pay an upfront fee to purchase the timeshare and annual fees for maintenance. You may also have to pay additional fees if major maintenance is needed in the future.

Is A Timeshare An Investment?

Simply put, no, it isn’t.

An investment should either generate income or appreciate in value. A good investment will do both. A timeshare will usually do neither.

Most timeshares sold on the secondary market sell for a fraction of their face value. Some owners are so keen to get rid of them, they’ll sell them for a nominal fee. 

Timeshares are also not a good investment opportunity for people looking to generate a passive income. While you can often rent your timeshare to a third party, lots of other owners do the same. That means that you’re unlikely to make a meaningful profit.

However, timeshares do work for some people. If you know that you want to visit the same place each year and can afford the payments, they can save you money. Some also allow you to stay at other resorts within the same group.

But even in these cases, a timeshare should not be seen as an investment.

Benefits Of Renting A Timeshare

Timeshares are not a great way to make money. But for the savvy traveler, they can be a great way to save money!

Owners who cannot use their timeshares are often keen to recoup some of their expenses by renting them out. This can allow you to rent a high-quality, condo-style apartment on a resort for a much lower cost than booking a hotel room.

Timeshares are designed to be a home away from home. Their amenities are usually excellent. 

When you rent a timeshare, you can expect:

  • More spacious units
  • Multi-bedroom units available
  • Kitchen
  • Private balcony

When you own a timeshare, you can often only visit it at a set time each year. But when you rent a timeshare, you are not tied down at all.

You can rent a different timeshare at a different resort each year. You choose the dates that work for you. 

The Verdict: Smart Investment Or Money Down The Drain?

For most people, a timeshare is not a smart investment. Although some people make them work, many people come to regret buying them.

Treat it like any major financial decision. Do your homework, and you won’t have any regrets.

Have you enjoyed this article? We’ve got lots more investment tips and hints for you. Head over to our Money section today!

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