A SWEET INVESTMENT

A timeshare is a form of ownership or right to the use of a property, or the term used to describe such properties. These properties are typically resort condominium units, in which multiple parties hold rights to use the property, and each sharer is allotted a period of time (typically one week, and almost always the same time every year) in which they may use the property. Units may be on a part-ownership or lease/"right to use" basis, in which the sharer holds no claim to ownership of the property.

The notion of the term "time-share" was originally created in Europe in the 1960 s.  A ski resort developer (Hapimag) in the French Alps marketed his resort by encouraging guests to "stop renting a room" and instead "buy the hotel". Subsequent success followed, and the concept was quickly embraced by developers worldwide, boosting sales of surplus condominium units at a time when the resort industry was depressed.

This concept has attracted many resort developers and prominent hoteliers, such as Starwood, Wyndham, Accor, Hyatt, Hilton, Marriott, and Disney. Vacation ownership has proven to be lucrative for stakeholders in these major resort families, due to its popularity with vacation-goers. This form of lodging has spawned a variety of products sold on similar occupancy schemes; cars, planes, boats, condo-hotel units and luxury fractional properties.

         Why Timeshares are Horrible Investments                          

•    1. Time value of money 

Investors should always be conscious of the time value of money. This is the basic assumption that money in hand today is better than the same amount tomorrow, or at any other time in the future. This assumption continues to be proven true thanks to inflation  and opportunity cost  (opportunity cost reflects the inability to pursue other opportunities because the funds are tied up).

• 2. Maintenance fees

All timeshares have maintenance fees. This means that every year, regardless of whether or not you actually use your week, you have to pay a fee. This maintenance fee goes up every year. The developers of these vacation properties have to charge enough in maintenance fees to not only cover the costs of running the resort, but also to cover the profit that the company doing the property management needs to make. Imagine if you bought a home and had to pay enough in maintenance fees to cover close to what you would have spent in rent.

•   3. A depreciating asset

Timeshares are like new cars: the second you drive them off the lot, they lose value. Timeshares lose 40 to 75 percent of their value once you purchase them. If cars depreciated that quickly, I doubt anyone would buy a new one without being subjected to timeshare-like sales tactics.

•   4. Rental rates are lower than you think

Have you ever visited Redweek, eBay  or other sites that offer timeshare rentals? Be sure to check these sites before buying a timeshare. You can often rent someone else’s timeshare week for less than they are paying in maintenance fees. There are many timeshare owners out there who are unable to use their weeks for the present or coming year and will rent them out to other people. In fact, there are so many that they generally end up going for much less than the original asking prices. This is not something you will find out from the salespeople at the resorts.

•   5. Exchanges

Vacation is supposed to be your time away from the stress and the rat race. Do you really want to feel tied to a specific property every year? Timeshare salespeople know that many people don't, so they fervently push the values of exchanging your units in order to travel anywhere in the world using an exchange company such as Resort Condominiums International.

So, final question... 
Are Timeshares a Good Investment?

Unfortunately, when people say "investment" and timeshare in the same sentence, it usually means they have a huge misconception about what a timeshare is and what it is for. Let's clarify!


Investments are "means" to an end, right? You invest money, for instance, to increasegoals you have in your life. The goals are the "end" purpose you intend to achieve. Are we on the same page here? Okay. that money, so you have it to use towards

So are timeshares a good investment? Relatively speaking, a timeshare should be an "end" not a "means." That is where the confusion comes in. A timeshare is something you buy, like a wedding ring is something you buy or a vacation is something you buy.

When you put it that way, it's easy to understand where timeshare fits in. Are timeshares a good investment? Do we ask if a wedding ring or a vacation is a good investment? No! You are not going to increase money from buying a wedding ring or a vacation, you are spending money, right?

Timeshare cannot be grouped in with stocks, mutual funds or investment real estate. It is notdifference between "means" and "ends." the same thing! This confuses the
Timeshare belongs in the group with the wedding ring and the vacation. These "end" purposes move the word "investment" into an emotional realm -- investing time with your family, investing love into a relationship. In the emotional realm the ROI is not interest, the ROI is quality of life, the ROI are your memories.

Do you see the difference? When I was doing financial planning for clients, and we focused on their financial goals, we focused, of course, on the kids education, retirement and inheritance, but I also loved moving my clients to open the treasure boxes in the attic of their minds and dream again! Vacations always came out! They weren't traveling like they'd dreamed of. Why not?! That needs to be a goal.