Timeshare ownership can seem like a really good deal because you are purchasing the use of a vacation home for just a fraction of the cost of paying for a hotel every year on vacation. Plus, it is yours to use for your whole life, and often longer. However, there are many hidden costs that timeshare companies try to downplay, but you should be aware of before you become a timeshare owner.
Timeshare Hidden Cost: Maintenance Fee
At the first timeshare presentation I attended, the sales lady did a wonderful job of pointing out that with hotel prices going up at 10% per year, if I paid for 7 nights in a hotel of the quality that now costs $100/night, I would pay for the entire cost of purchasing a timeshare in less than 10 years, and then have it to use for the rest of my life. It sounded like a great deal, until she tried to slip the maintenance fee by me.
The timeshare maintenance fee varies from place to place, but is typically hundreds of dollars per year, whether you use your week at the timeshare or not. As an owner, you are responsible for paying your share of the maintenance fees, plus the potentially costly insurance fees. Especially in tropical destinations where hurricanes are possible, these maintenance fees can be huge. In the example above, I was told that the fees are $700/year, which she didn’t mention is exactly the same as the cost of staying in a hotel at $100/night for a week, making the timeshare more expensive once you consider the purchase price.
Timeshare Hidden Cost: Taxes
Many parts of the world impose a timeshare tax on every night that you are staying in the timeshare. It varies, and can be anywhere from nothing to upwards of $20 per night. Ask about the tax on your potential timeshare before buying and getting stuck with an extra charge of over one hundred dollars per week.
Timeshare Hidden Cost: Utilities
Oddly enough, your basic maintenance fee does not cover your utilities. Many places will calculate how much electricity you use and bill you for it at the end of the week. This can get very expensive in tropical locations where you are running the air conditioning all week.
Timeshare Hidden Cost: Transportation
Another very large factor to consider is how far the timeshare is from your home, and how much it costs for you to get there. If roundtrip tickets are $800 apiece, whereas your typical vacation is located within driving distance, you will be spending a lot of money on airfare to get to your timeshare.
Timeshare Hidden Cost: Trading Fees
Many timeshares are part of a larger network that allows you to use your allocated week to trade into a different location. This may seem like a great deal, but you will often have to pay at least $100 to make the trade, plus potentially any extra maintenance fees, taxes, and utilities, as listed above.
Timeshare Hidden Cost: Summary
When you are looking into buying a timeshare, don’t be persuaded by the purchase price alone and the guarantee to be an owner for your whole life. Unfortunately, timeshares cost much more than the purchase price due to maintenance fees, taxes, utilities, transportation, and trading fees. And that’s not even looking at the cost of activities and food while you are at the resort. It is a good investment for some, but not necessarily something good to do if you are on a tight budget.
