Almost 10 million people in America own a timeshare. Investing in a timeshare gives you a stable holiday home to visit each year at a fraction of the cost—or so it would seem!
Understanding how much you’ll actually pay for a timeshare can help you figure out whether or not it is a sound investment. So how much are timeshares?
Read on to find out everything you need to know when comparing timeshare costs.
Understanding Different Timeshare Systems
Owning a timeshare gives you access to property throughout the year without you having to buy it outright.
One timeshare property will have multiple owners who have access to it throughout the year. As a result, you only have to pay a fraction of the price that you would pay to buy a vacation home.
For example, you may have access to your timeshare for the same week every year (a fixed-week contract). Or you may be able to book it for one week each year at a time that suits you (a floating-week contract).
There is also a timeshare points system, which some companies use instead. This gives you a number of booking points every year. You can then use these to book different properties each year, depending on where and when you want to vacation.
So who actually owns a timeshare property? Let’s take a closer look.
Types of Timeshare Ownership
There are two different types of timeshare ownership that you need to know about. These can dictate the value of timeshares and how much you pay for them.
Shared deeded ownership gives the holder a percentage share of the property itself.
For example, ownership may be sold in week units, so there will be 52 property deeds in total. Each of these gives the owner around 1.9% of property ownership. So if you or a relative buys a three-week share, they will have around 5.7% ownership interest.
This ownership can then be passed on in a will or gifted.
In contrast, the timeshare company owns the title deeds in shared lease ownership contracts. Shared lease ownership gives you the right to use a property for a set number of years. This depends on how long the lease is for.
This may be a shorter period (five to ten years) or it could be a long-term lease (fifty to one hundred years.) Lease contracts can also be passed on in a will. However, the company will maintain ownership of the property once the lease is up.
How Much Are Timeshares?
The cost of timeshares can vary depending on a number of factors. This can include:
- How many weeks you want to use for the property each year
- The size of the property
- Whether you choose a fixed or floating contract
- The type of ownership you choose
Most timeshare companies charge per interval (one week) and the average price of a timeshare for one week per year is $24,140. So if you want to buy a timeshare for two weeks each year, you can expect to spend around $50,000.
Lease ownership contracts tend to be much cheaper than deeded ownership contracts, especially if the lease is short. This, of course, also means that you won’t get access to the property for as long though.
On top of the initial price of your timeshare, you will also need to cover maintenance costs for the property. These are split between all of the property owners or renters.
Most timeshare owners pay around $1,000 each year for basic maintenance. Again, this depends a little on how big your timeshare property is.
Your maintenance fees can also increase each year and you cannot decide when certain maintenance work takes place. So the timeshare company could present you with a big bill that you have no control over at the end of the year.
What Happens After You’ve Paid Your Timeshare Home Equity Loan Off?
When it comes to financing for timeshares, a lot of people use their own savings. However, you can also take out a home equity loan to cover your initial costs.
It is important to note that paying off your loan won’t affect how much you have to pay the timeshare company each year. You will have to continue making maintenance payments after you’ve covered your initial costs.
This can seriously add up over the years so it is important to get your finances in order if you are going to manage them properly.
Getting Out of a Timeshare Contract
As you have probably noticed by now, timeshares can be very expensive. You also have to continue covering ownership costs long after you’ve bought or rented one. Fortunately, if you have bought or inherited a timeshare, there are ways to get out of it.
- Sell your timeshare to another buyer
- Cancel your ownership (if you are still within the recession period)
- Contact the resort about canceling your contract
- Use a timeshare exit company
When getting out of a timeshare, it is a good idea to speak to an expert about your options. They will be able to discuss your options with you to help you find the best deal possible.
For example, more timeshares resell for between 30% and 50% of their original value. Listing them properly will help you get as much of your money back as possible. Or, if you want to cancel your contract with the company directly, an expert will make sure you don’t get drawn into an “upgrade deal” instead.
Get Help Leaving Your Timeshare Contract
If you’ve been wondering “how much are timeshares?” the answer is it depends on the size of your property, how much you use it, and the type of contract that you have.
However, in general, you can expect to pay over $24,000 upfront and around $1,000 each year for maintenance. So a timeshare is not a small investment, even if it does sound like a good deal at the time!
If you are looking to get out of your timeshare contract then help is at hand. Get in touch with Lonestar Transfer today for help canceling your timeshare contract.