The appeal of a guaranteed vacation spot every year is tempting. However, it’s important to look beyond the surface. Discover why potential buyers should proceed with caution.
What’s a Timeshare?
A timeshare is a vacation property arrangement where multiple people who are typically unrelated share ownership or usage rights to a resort condo or vacation home. Normally, each timeshare purchaser can use the property for one or two weeks per year as specified in their contract. Though costs and obligations are divided among users, each timeshare consumer typically pays:
- A one-time upfront purchase fee
- Maintenance fees
- Special assessments
- Yearly increases (typically 3 to 8% annually based on 10-year timeshare ownership)
- Exchange company dues (if applicable)
- Reservation, booking, and transaction fees (if applicable)
Typical Purchase Cost
The American Resort Development Association (ARDA) states that U.S. timeshares averaged $23,160 in 2024, though prices vary by location, property size, and amenities. Owners also pay for maintenance, repairs, assessments, and extra fees, making timeshares an ongoing financial commitment that only ends if sold or relinquished.
Skyrocketing Maintenance Fees
Forbes says that getting out of a timeshare in 2026 will be harder than ever as maintenance fees skyrocket. They explain, “The timeshare industry is booming. The worldwide timeshare vacation ownership industry is projected to reach $19.23 billion this year, a 7 percent increase over 2024. But now, during what’s commonly called Timeshare Maintenance Fee Season, owners are getting hit with higher maintenance fees. The average maintenance fee rose 17 percent last year, to $1,480.”
A Couple’s Story
Ned and Faye purchased a deeded timeshare near a Massachusetts ski resort, securing a fixed week in July for vacations. Due to Ned’s health problems and increasing medical bills, they can’t use the timeshare and struggle to pay the rising annual maintenance fees – which are required even when unused. Not only did the couple lose money upfront on the purchase, but they are having trouble selling it. Their efforts to give it away are also unsuccessful as their heirs have no interest in the property. Now they may be forced to “surrender” the deed for a fee or pay a lawyer or exit company to get out of it. Ned and Faye fear that keeping the timeshare will deplete their savings and complicate estate planning, as the timeshare deed gets passed on through the estate if they keep it.
Underscoring Complications
Per Rocket Mortgage, nearly 10 million American families own a timeshare allowing them to return to the same vacation spot year after year. Rather than searching for hotels or new vacation destinations each vacation period, timeshares provide guaranteed vacation destinations, a bonus for people who enjoy vacationing at the same time and place each year. Frequently, timeshares provide access to premier resort amenities such as pools, spas, fitness centers or golf courses. However, as great as they sound, it’s important to recognize that they can be a lifelong financial burden, as in the case of Ned and Faye where maintenance fees became a trap.
Timeshares – Incorporating Various Types of Real Estate Ownership
Timeshares are a special form of real estate ownership. Two main types exist: deeded or non-deeded. Let’s examine these popular types of timeshares:
Deeded: In a deeded timeshare plan, buyers purchase a fractional ownership interest in a specific unit. Therefore, they can rent, sell, donate or bequeath their ownership interest. Deeded timeshares are generally structured in two possible ways, a specific fixed week or floating week arrangement.
Non-deeded: In a non-deeded timeshare plan, also called a right-to-use ownership, the developer remains the original owner. Buyers essentially lease, license, or buy a club membership that gives them specific rights to use the property at a specific time for a set number of years per contract arrangement.
Other Types of Timeshares
Besides deeded and non-deeded timeshares, there are also vacation exchange programs for swapping weeks, point-based systems using vacation credits, and vacation clubs that let members reserve timeshares at different club-owned properties.
Appeal of Timeshares
Owning a timeshare offers guaranteed vacations, resort-style amenities, and the potential to build family traditions, as some are inheritable. Many timeshares are located near attractions like ski resorts or amusement parks and provide exceptional amenities. While high upfront fees are common, owners expect savings compared to hotels. However, it may end up being costly as timeshares can involve significant financial commitments. Timeshares may also be subject to limited flexibility, complex rules, and ongoing maintenance costs. Persistent dishonesty in the industry adds further complications, including pushy presentations, failure to disclose information, and timeshare property scams.
A Poor Investment?
Timeshares are often promoted by sellers as great investments. In fact, many sellers use high-pressure, manipulative tactics to sell without disclosing the long-term costs. While most timeshares can be enjoyed as vacation destinations, timeshares rarely make worthwhile financial investment endeavors. Per Investopedia, “Timeshares usually lose value over time and can be hard to resell, so they’re not true investments.” Most do not generate income for owners and the maintenance fees and assessments can grow. They caution that before buying in, it’s worth “weighing the convenience against the long-term commitment.”
Timeshares & Senior Citizens
New retirees may find themselves with newfound time for vacationing and a timeshare may be a consideration. Most experts warn senior citizens on fixed incomes to refrain from purchasing timeshares. They explain: Like automobiles, timeshares do not typically constitute financial investments with potential for appreciation in value. Experts note that timeshares are expensive and come with growing financial commitments. Additionally, declines in physical abilities associated with aging can reduce capacity to travel and fully enjoy a timeshare or gain full benefits from property trades. While renting out a timeshare you own and can’t use might be doable depending on contract details, finding a decent renter can be a hassle due to location, season, and demand.
Complications Exist
Timeshare experiences vary significantly. Despite this, it is not uncommon for people to find themselves in similar difficult circumstances like Ned and Faye. Sometimes, people grow frustrated and stop paying the maintenance fees to get out of the contract. However, not paying is ill-advised as non-payments can lead to foreclosure and damage credit. Folks who are “stuck” can seek legal representation or contact the timeshare company for hardship resolution.
Do Your Research and Gain Support
If you buy a timeshare that was misrepresented, or you were coerced, laws help but the burden of proof is likely upon you. In any case, legal representation is advised.
Taking these steps can help prevent a purchase mistake:
- Get educated on the types of timeshares available and compare them to get the best fit.
- Read and fully understand all details of the contract. This includes your right to use the property, your personal obligations, the developer’s obligations, maintenance and repairs, transfer and sale terms, etc.
- Because you are entering a legal contract and spending money, lean on professional legal and financial advice.
A Lawyer Can Help You Understand:
- Contract law: This describes the relationship between the timeshare owner and the resort developer, detailing the rights and responsibilities of each party. Contracts can be complicated and may include resale or rental restrictions, for example, that make the contract rigid and inflexible.
- Property law: This addresses property ownership. Sometimes, in timeshares, the developer retains ownership of the common elements of the property and manages them, or the owner gives back the rights.
- Consumer protection laws: These laws are designed to protect consumers of timeshares who have been misled or deceived or treated unfairly.
A Financial Advisor/CPA Can Help You Understand:
- Investment potential: A financial expert can help clients understand a timeshare’s true value as a depreciating lifestyle expense. Note that Timeshares typically have a poor return on investment or ROI.
- Financial risks: Here, experts can discuss the financial risks associated with the purchase of the timeshare and ongoing fees. They can also help analyze resale market data, usage flexibility, and other related factors.
- Tax laws: A financial advisor or tax planner can help clients understand the tax implications of timeshare ownership. Vacation homes can be tax-deductible, but rules apply depending upon usage. For instance, if rented, specific IRS rules apply based on personal vs. rental days.
A Word About Exit Companies
Timeshare exit companies are mainly third-party services that help timeshare owners legally terminate their contracts. While some provide legitimate legal counsel, many operate at high fees and behave unscrupulously by performing tasks owners can do themselves. Since there are many fraudulent companies out there and the industry is highly associated with scams, people need to exercise caution. If you wish to exit your timeshare, talk to your resort directly to inquire about options and seek the advice of a specialized timeshare attorney who can legally direct you or make recommendations. Also seek legal advice if you feel you’ve been taken advantage of, are experiencing financial hardship and need to unload the timeshare fast, or if misrepresentation of the property or your rights has occurred.
Timeshares: Dream Vacations or Hidden Pitfalls?
Living the American dream often involves balancing work and leisure, with timeshares offering resort-style experiences for pleasure. Timeshares deliver regular vacations at the same location or through exchanges, providing spacious accommodations and low-maintenance living. However, they typically lose value after purchase, come with high upfront and ongoing fees, and may not be suitable for seniors or those on fixed incomes. Though purchasing on the secondary market can reduce costs, professional evaluation is recommended due to variable values and rising fees. Some timeshares sellers are pushy, so don’t rush into anything you might later regret. Rather, do your homework, lean on professionals you trust for their best advice, and carefully weigh your options with the understanding that timeshares are generally not solid investments.
Disclosure: This independently written article is informational only; consult a lawyer or financial advisor for specific advice.
