Why Timeshares Are Bad ‘Investments’


Please keep in mind that timeshares should NEVER be considered as investments.  The reason for the title of the blog post is to give credit to the article of which this post is based on: http://www.nuwireinvestor.com/article.aspx?id=227

Here’s a quick outline of the article…

1. Time Value of Money
The money that you pay upfront could have gone to use elsewhere now instead of paying for future vacations you may or may not take.

2. Maintenance Fees
You pay every year for your timeshare regardless if you go or not.  Maintenance fees typically go up every year.

3. Depreciating Asset
Timeshares are worse than cars.  The second that you purchase a timeshare, it loses 40 to 75 percent of its value.  There are certainly areas where the resale value can go to zero.

4. Rental Rates are Lower Than You Think
The flood of timeshares for sale creates a large rental market that forces down rental rates.  Also, developers offer incredible incentives to renters in order to entice them to the resort as potential buyers.  They pass none of the proceeds to owners.

5. Exchanges
Timeshare exchange companies require fees to be part of their program.  Over time, your timeshare loses its “newness” factor and the value of your exchange decreases.

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