Timeshares are a Purchase and Not an Investment

published on December 1, 2009 by

When you buy a timeshare, you’re making a significant upfront investment guaranteeing an annual vacation with your family. Because of the additional space and amenities, timeshares are a great way to vacation. You can build family bonds and memories in home-like accommodations and unlike your typical rental home, there’s no need to pack sheets and towels. But, as a wise buyer, you must realize that you should not buy timeshare with the sole intent of reselling it or that it will be a financial investment.

Timeshares are simply pre-paid vacations at wonderful resorts you love and want to visit every year. They do not appreciate in value. While many timeshares are considered deeded real estate, they should not be thought of as a money-making investment. If the timeshare you’ve chosen to buy is deeded, you are buying real property, with the option to treat this property in a variety of ways: give it away, will it to your heirs, rent it out, resell it, and so on, but this is not the same as buying a home which most likely will appreciate in value over the years.

Due to the upfront costs, and the fact that the majority of timeshares do not appreciate like normal real estate, the cost savings is in future vacations. You pay a one-time purchase fee that entitles you to a one week vacation every year at a resort. The savings come when you calculate how much you would have spent renting hotels for the same amount of time every year, considering hotel room rates increase every year. With timeshare ownership, you experience long term savings and guaranteed vacations and that is the reason timeshares are a vacation purchase and not an investment.