What Is A Timeshare?
Why do so many people buy them?
I’ll admit. I’ve been tempted to look into a timeshare in the past when offered a free three-day two-night vacation including food and airfare. The catch? Sitting through a timeshare sales presentation. Yuck.
Before you decide whether or not a timeshare is right for you, Google “Timeshare horror stories.” Story after story is the same. People get lured into sitting through a sales presentation with free trips to popular destinations.
Once they’re locked into a room for hours, they realize that they’ve been duped. One couple claimed that after six hours of (torture), they had to resort to drinking the only thing available, alcohol.
They claimed it made them woozy and bought in just to get out of the room.
Most owners agree that timeshares are a scam and feel like they’re stuck in a black hole after buying.
Here’s the rub before purchasing: FEES
Whether or not you visit your timeshare each year, you’ll still owe maintenance and service fees. And just like inflation, those fees typically go up each year.
Knowing what you know now…
Why would someone pay thousands of dollars for a place with minimal square-footage that they might get the chance to visit for one week each year?
Add to that the fact that owners have:
- Zero equity
- Ongoing maintenance & service fees
Plus, selling is next to impossible. Sound like a good deal?
Hopefully, you’ve realized that these deals are scams and to avoid them like the plague.
What a timeshare is costing you
The average cost of a timeshare in the U.S. is $14,500.
Let’s see what would happen if that money was invested instead.
$14,500 put into an index fund earning 8% annually:
- In 10 years = $32,000
- In 20 years = $71,000
- In 40 years, you would have over $356.000.
It’s not quite a million but it’s still a ton of money!
I loved what Dave Ramsey said about timeshares:
“Throwing money at a timeshare is not an investment and will not generate money for you. An investment implies that you can eventually sell it and make money. With timeshares, you’re just pre-paying your hotel bill for the next 20 years whether or not you use it.”
But, if you’re one of the thousands each year that purchases one and want to get rid of it, here’s how to do it….
5 Easy Steps To Get Rid Of A Timeshare
1) Check your contract
You maybe in luck if your timeshare contract contains a recission or retraction period. This is also known as a “cooling off” period. It varies by state and ranges from three to 15 days.
It’s a period of time after the contract is signed in which you can cancel. No questions asked. After that, for most owners, there’s no easy way to get rid of a timeshare.
2) Sell it…if you can
Your best option to getting rid of your timeshare is to sell it outright and recoup some of the expenses you’ve already paid if possible. You could do this yourself or hire a company to do it for you.
If you do use someone else for help, make sure you never pay any upfront fees to sell it. No matter what they tell you, it’s not mandatory.
The first step to take is researching your local market to see what it’s worth. One group, The Timeshare Users Group (TUG), is an indispensable site for owners for advice.
They’ve produced a fantastic video on figuring out what your timeshare is worth on the retail market:
Once you’ve gotten an idea of what it’s worth, it’s now time to advertise.
TUG has its own Timeshare Marketplace where you can list it to sell.
Other options for listing your timeshare include:
- Newspaper classifieds
3) Ask the resort to take it back
4) Rent it out
Many owners discover they can rent their timeshares for enough to pay or at least significantly offset annual fees, Rogers says. The same sites that list timeshares for sale also list options to rent.
5) Use a timeshare exit company
If you are unable to give your timeshare back directly through a resort program, or if you are unable to sell your timeshare through a legitimate listing service, then consider contacting the Timeshare Exit Team which is endorsed by Dave Ramsey.
They offer free consultations to discuss the best exit options to pursue. One cool thing they offer is a 100% money-back guarantee. If they don’t get you out of your timeshare, you get a full refund.
The Bottom Line
Timeshares, on the other hand, are a depreciating asset. Similar to purchasing a new car, their value drops as soon as you buy one.
If you’d made the mistake and purchased one in the past and want to get out of it, try following the steps above.
The sooner its gone, the more money you’ll save. Remember, it’s unlikely you get much back from the sale price, but you’ll at least get out from under the annual fees.