For people who want a vacation home without the expense of buying a home they'll only use for a few weeks or months of the year, a timeshare can seem like a good option. A timeshare is a property, usually a condominium in a resort community or a group of resort communities, that is sold to multiple owners, each of whom owns a share, or time period, of the property. As with any investment, a timeshare comes with benefits and risks that any potential buyer should be aware of.
Types
There are two types of timeshares. When you buy into a deeded timeshare, you're buying a partial ownership in a specific unit that you can use for a certain time period every year. You're the owner of your share of the property and can sell it, rent it, use it or share it as you choose. With a right-to-use timeshare, you buy a certain amount of time in a property or group of properties for a defined period of time, so you may not stay in the same unit, the same resort or even the same country each time you use your time share.
Costs
In addition to the purchase price of your timeshare, which may be one upfront fee or a down payment plus a monthly mortgage payment, timeshare owners are usually responsible for a monthly or annual maintenance fee for the property. Timeshare owners also pay taxes for their timeshare property. According to the Georgia Governor's Office of Consumer Affairs, the average timeshare cost for a one-week timeshare ownership is $15,789, excluding fees and taxes.
Geography
Timeshare properties tend to be in popular vacation destinations. According to the Georgia Governor's Office of Consumer Affairs, about 22 percent of all the timeshare properties in the U.S. are in the state of Florida.
Considerations
Buying a timeshare is a significant financial commitment, and just because you like a particular destination right now doesn't mean you'll like it in 15 or 20 years, when you still own the timeshare. If you purchase a timeshare that lets you choose from several different destinations for your allotted time, make certain you understand the requirements for making requests. If you're considering a timeshare, compare your annual vacation costs to the cost of the timeshare property to decide if you'll be getting the most value for your money.
Expert Insight
If you're considering purchasing a timeshare, do it because you're looking for a vacation destination and not for an investment, according to the Federal Trade Commission (FTC). Because there are so many timeshares available, it's unlikely that you'll make money selling a timeshare property. In fact, the FTC says you should expect the resale value to be lower than the price you paid for the property.
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