Why Are Timeshares Not Good?

Timeshares offer partial ownership of exotic resort properties.

Developers often pitch timeshare resorts as an ideal vacation investment, and partial property ownership may carry some benefits. A string of issues with timeshare properties that range from high maintenance fees to rapid depreciation, though, make the properties a dangerous investment.

Maintenance Fees

Each year, timeshare owners must pay a maintenance fee that ranges from several hundred to several thousand dollars depending on the property and contract. These annual expenses, which help cover the cost of maintaining the timeshare property, apply regardless of whether the owner actually uses the property or not. In addition, maintenance fees can quickly amount to more than the cost of renting a comparable hotel room for the same amount of time.

Depreciation

Timeshare units, according to the investment resource, Nuwire Investor, quickly depreciate by a significant amount. In extreme cases, timeshare owners may lose as much as 75 percent of the purchase cost due to depreciation.

Restrictions

Many timeshare properties allow the owner access to the resort during a given week each year. If the owner can not vacation during the given week and can not sublet the property for the week, the allocated time can go to waste.

References

• Timeshare Trap: Timeshare Investments
• NuWire Investor: Top 5 Reasons Why Timeshares are Horrible Investments