So you’re thinking about buying (or selling) a timeshare resale. Perhaps you’ve been daydreaming about annual vacations (guaranteed!) to exotic places that are already booked on the calendar, year after year. Maybe you’ve seen a glossy advertisement at a travel agent’s office (are travel agents still a thing?) and can practically taste that sweet Pina Colada.
To decide if a timeshare resale is worth it for you, you have to know your goals, your values and what you hope to get out of the property in the long run.
If you’re a timeshare reseller or thinking of buying a vacation club membership on the secondhand market, read on.
What is a Timeshare Resale?
A timeshare resale is sold by a person instead of the resort. If you purchase from a timeshare reseller, you’ll typically pay 50 to70% less than if you were to buy directly from the resort.
Are Timeshare Resales Really Worth the Money?
Is it worth it to buy a timeshare resale?
Paul Moyer, Finance blogger at SavingFreak.com flat out says, “Buying a timeshare directly is never worth the cost.” This is because you can save boatloads of money by purchasing secondhand/resale timeshares.
If the idea of a predictable, luxurious vacation appeals to you, buying a vacation club resale may be the way to go. Of course, only if you think you won’t get bored of going to the same place every year for the next 40 years or so. Some resorts allow you to rent out your share if you’re not going to use it, so this could help alleviate the boredom factor.
But if you’re considering purchasing a timeshare resale as an “investment,” think again.
Resellers, unfortunately, get the short end of the stick because the supply of second-hand timeshares is so high, that they are forced to sell at rock bottom prices.
Resellers are likely to lose money when selling their timeshares (Disneyland Vacation Club is the exception to the rule), and these losses are not tax-deductible.
Timeshares are Not Investments
If you’re considering purchasing a timeshare as a way to make money, this is not a wise choice. Timeshares are shared, meaning you “own” a fraction of the property, while paying annual membership fees for maintenance (that could cost you thousands of dollars each year).
Robert Kiyosaki, the author of the acclaimed book, Rich Dad, Poor Dad, asserts that you have to know the difference between liabilities and assets in order to succeed with investing. He states,
“An asset is something that puts money in my pocket. A liability is something that takes money out of my pocket.”
Timeshares are most definitely a liability! A timeshare property will typically NEVER go up in value. However, Disney Vacation Club has continued to be in high demand, so resellers will have a much easier time selling and recouping their initial investment.
Who Shouldn’t Buy a Timeshare Resale?
Advantages of Timeshares
While there are many disadvantages of owning a timeshare, these are the perks:
- The accommodations are top-notch
- Luxury amenities may include hot tubs, washer/dryer, entertainment centers and more
- Typically located near excellent attractions
However, If any of the following applies, you should probably think twice before buying:
- You don’t want to pay annual fees for the life of your membership
- You don’t want to go on the same vacation year after year
- You don’t want your offspring to be stuck with an unwanted timeshare
- You don’t want to pay hidden fees