With inflation on the rise and job security in greater peril than ever, things are getting expensive. Once upon a time, your yearly two-week trip to Disneyland was well within the budget. These days, the average vacation sets you back approximately $1,578–and that’s accounting for one person only.
That’s where timeshares come in, salesmen will say. They say it’s important that every vacationer understand how timeshares work since they’ll save you money. The sad reality is that there are far too many myths and half-truths floating around about how timeshare ownership works.
We’re here to help. Read on for your definitive myth-busting guide on timeshares–what they are, and what they aren’t.
How Timeshares Work
Before we get into the meat, let’s brush up on what timeshares are. Timeshares are almost like a form of real estate investment–though don’t mistake them as one.
When you purchase a timeshare, you are signing a contract to pay a lump sum to a singular resort. It may also be to a chain of resorts or hotels. In return, you get exclusive access to these properties over the course of the timeshare’s lifespan.
How long that timeshare lasts depends on the sort of contract that you sign. On the lower end, it could only be for 20 years. In the case of deeded ownership, though, you are on the hook for life–and perhaps in perpetuity.
Timeshare ownership is a form of fractional ownership. Think of it as owning a second summer home. You get partial access to the home without the full obligation of owning it.
That said, timeshares require you to contribute to some upkeep and maintenance–even when you aren’t using them. And they allot to you only a certain number of points per year. Once you use the points up, that’s it.
Many treat this as a vacation rental opportunity. Make no mistake, a timeshare is not for making a profit. It’s for vacation use only, and won’t be easy to sell.
Benefits of Timeshares
A timeshare is for someone who can’t afford a vacation home–or doesn’t want one. So, this is not a form of real estate investment. In fact, timeshares do not appreciate over time.
The primary benefit of timeshares is savings in select cases. If you are easy to please, and love a particular resort (or resort family) then this is for you. It benefits people most if they have regular yearly vacations on a consistent, unchanging schedule.
Hotel costs are often the primary expense on the average vacationer’s budget. Timeshares may ease that burden in the long term. In essence, you could be securing an affordable hotel for the life of the timeshare contract.
Timeshares serve you best when there is joint ownership. For this reason, many people purchase them together. They make an informal agreement to split the cost and share their points throughout the year.
Of course, the financial burden may be considerable for a single person or family. It’s often easier, in the long run, to transfer it to a family member or friend.
Naturally, there are a slim few cases where buying a timeshare makes sense. Resorts and hotels do a great job of upselling them and skipping over their flaws. Let’s discuss some of the harsh realities of buying a timeshare.
Downsides of Timeshares
Of course, it’s not all sunshine and rainbows like a resort tries to paint it. Timeshares can be a great benefit for a select few people. For the rest, they are a heavy burden.
First, the initial purchase alone is extremely expensive. Many people spend upwards of $20,000 for a single timeshare. When doing the math and budgeting for future vacations, that may not be worth it.
Timeshare Costs with Upkeep
Second, the maintenance and upkeep costs of the property are your responsibility. After purchasing a timeshare, many people pay maintenance fees, repair fees, and so on. Resorts tend to shift more of the financial burden over time to timeshare owners.
The Challenge to Cancel a Timeshare
Unfortunately, there is no straightforward way to leave a timeshare. You cannot simply cancel your contract with the resort–at least, not easily. It lasts until the end of the contract, at which point you are free.
You are able to sell your timeshare. But as we’ve said before, a timeshare depreciates in value quickly over time. Many people sell their timeshare at a considerable loss on online timeshare-selling marketplaces.
Exiting a Timeshare
The best option available is to cancel it with specialized timeshare cancellation services. They help you to get rid of an unwanted timeshare and recoup much of the prorated worth. It’s an excellent way to reverse what you discover to be a bad deal.
Debunking Timeshare Myths
Don’t let a hotel or resort be your only source of information when evaluating timeshare costs and so on. There are a ton of times or myths that the vacation industry loves to perpetuate. Let’s debunk just a few of them.
Myth #1: Timeshare Owners Usually Don’t Regret Their Purchase
Again, be careful who you get your information from. Someone who has a vested interest in selling a timeshare is likely not interested in hard truths. Therefore, they may not give you the full picture of timeshare ownership.
If you’ve been to a timeshare meeting, you’ve likely heard one common statistic: most timeshare owners are satisfied. You’ve likely heard through the grapevine of people who regret their timeshare. According to that salesman, though, instances of dissatisfaction are rare.
It’s hard not to believe this when timeshares get so much organic traction. Travel blogs will often vouch for them. Celebrities may even endorse them, too.
Reality: Most Owners Regret Their Timeshare
Approximately 85% of people regret their timeshare purchases. That is a startling number. In any other industry, that should be a clear sign for you to run.
The reasons for this are varied, but it’s safe to say the statistic encompasses a large group. Whether for financial reasons or otherwise, most folks wish they had never bought it.
Now imagine being in their shoes. You are stuck with a 20+ year contract with no easy way out. Regardless of what happens, you are going to lose money.
If you are part of the 85% of people who regret their purchase, don’t lose hope. There are still options. Many people testify that with the right company, they can relieve themselves entirely of that burden.
Myth #2: Timeshares Don’t Have That Many Upkeep Costs
Timeshare salesmen will often lure you into purchasing one based on one thing: it’s a one-time cost. They invite you to do the math. In the long run, all things considered, it’s a steal.
The general sales pitch does mention your obligation to handle maintenance costs. But it downplays them. It suggests that on the whole, they are minimal.
For many people, it’s easy enough to break down the cost and justify the purchase. You can divide the cost of your timeshare from the average per night cost of the same room. Assuming you use all your points every year, it ends up being cheaper.
Unfortunately, the reality is not so convenient.
Reality: There Are Tons of Hidden Fees
It’s important to understand that with a timeshare you have fractional ownership. Ownership implies an obligation to care for a property. In other words, you are responsible for your room more than the resort would have you believe.
What tends to happen is that the resort dumps all the financial burdens on timeshare owners piecemeal. They pass off everyday repairs, maintenance, and even sometimes landscaping and renovations to you. Truth be told, they try to get you on the hook for as much as they possibly can.
Unfortunately, the contract allows them to do this. In essence, you are helping the resort care for their property so they can make money off of other people.
Sure, you get your guaranteed a few weeks each year. But those additional hidden fees are being enjoyed by customers who don’t have a timeshare.
If a couple comes through and trashes a room, you may just be paying for their enjoyment. And worst of all, you’re getting no benefit from that money.
Myth #3: Your Timeshare Debt Is Your Own
Perhaps the only good thing about debt is that it doesn’t pass on. Your children and grandchildren aren’t responsible for your financial burdens when you die.
Creditors and debt collectors often try to convince us that this isn’t the case. They terrorize the children of a deceased debtor with threats that they owe money. Thanks to our legal structure, debts usually only belong to one person and do not transfer.
That would appear to be the case with timeshares, right? If an elderly parent purchases a timeshare and passes away before paying it off, the debt dies with them. Timeshares, as you can already imagine, aren’t that straightforward.
Reality: Many Timeshares Are “In Perpetuity”
The sad reality is that many timeshares are inherited. In some rare cases, this could mean a child inheriting a paid-for timeshare with their only obligation being upkeep fees. But in most cases, this means a child inheriting their parents’ debt.
This will depend on the legal architecture of your contract. Many contracts function “in perpetuity,” or in other words, forever. Whether the timeshare is 20 years or continual, that burden falls to the children.
This is bad news for the children as much as the parents. Parents don’t want to saddle their kids with unnecessary debt. And kids do not want responsibility for the financial mistakes their parents made.
This is why it’s important to read the contract stipulations before signing. The sneaky “in perpetuity” clause could make it very difficult for one to unshackle themselves from paying for it.
Myth #4: It’s Next to Impossible to Cancel or Transfer a Timeshare
The worst news of all is that exiting a timeshare, some say, is a nightmare. It’s a contract, after all. Contracts cannot be broken, and require both parties to agree to them–and cancel them.
The timeshare issuer has no incentive whatsoever to cancel your contract if you are unhappy. They have a guaranteed revenue stream from your timeshare. Even if somebody else purchases it, they know that their revenue will continue uninterrupted.
Further, it’s in the resort’s best interest if you don’t use it. Many of the people who are unhappy with a timeshare are unhappy because they dislike the limitations. So, they don’t use it to its full effect–freeing up rooms for the hotel to sell.
There are many misconceptions about canceling a timeshare. Some say you have to sell it on a marketplace at a massive loss. Others say that you cannot leave a timeshare without the help of a timeshare lawyer.
Luckily, this is one of the realities that work in your favor.
Reality: You Can Cancel or Transfer Easy
Good news: it’s well within your ability to cancel a timeshare. And you won’t be selling it for pennies, either.
A timeshare exit company is the best method to get rid of or transfer a timeshare. These are companies that know the tricks that resorts tend to play. They know how to get you the best bang for your buck, regardless of what timeshare you have.
Cancel Your Timeshare with Lonestar Transfer
Once you know how timeshares work, it’s pretty obvious they are only worth it in a select few cases. 85% of timeshare owners regret them after quickly recognizing their many disadvantages. Luckily, with the help of a timeshare exit company, you can relieve yourself of this absurd burden.
Lonestar Transfer has helped hundreds of people trapped in a timeshare to exit it. Contact us to request a free consultation and get rid of your timeshare.