A timeshare is an arrangement where people join up to split the costs and ownership of a vacation property.  Usually, this is done through a timeshare company where you “own” a week or two per year at a property and sometimes you can trade in those weeks for time at other affiliated properties. We love to travel, so do we love timeshares? Should you buy a timeshare? Should you invest in a timeshare?

Timeshares are a popular vacation tool, with a lot of big companies pouring a lot of money into developing and selling timeshare properties.  The problem is, we have never found one that works out to be a good deal.  Here are the major pitfalls with a timeshare:

Maintenance Fees
The biggest problem, in our opinion, with a timeshare is the maintenance fees.  There are fees that you pay on a regular basis (usually monthly or annually) for the general upkeep of the property.  These fees are above and beyond the price you pay to buy in to the timeshare.  Often, the maintenance fees add up to more than it would cost to stay at a good hotel if you are a bargain hunter and found a good deal.  Also, maintenance fees increase on a regular basis.

Flexibility with timing
When someone is trying to sell you a timeshare they will tell you all about the properties that you can stay at all around the world and talk about the flexibility that they give you.  But in reality, using timeshare points can be as difficult as the notorious task of using frequent flyer miles.  In reality, you get close to the flexibility of not owning a timeshare and being able to book a trip when you want and where you want, and following the best deals there based on airfare costs and hotel costs.

Flexibility with location
For some destinations it’s best to stay in a few different hotels.  One example is when going to the Big Island of Hawaii.  The island is so big and there is so much to see on every side of the island, we think you should stay at least a few nights in Kona and a few nights in Hilo.  With a timeshare that won’t work, you’ll be in one city for your entire stay.

Flexibility with type of vacation
What if one year you want to go on a cruise?  A timeshare company will tell you that you can use your points for a cruise, but if you compare the cost of the points to what it would cost you to book a cruise then you will realize that booking a cruise on your own will save hundreds of dollars.

In economics there is a concept known as the Time Value of Money.  This is essentially saying that a dollar in your hand today is worth more than a dollar in your hand tomorrow.  A timeshare salesman ignores this principle and tells you that you are investing in your future vacations.  But we don’t even think getting into the cost of the timeshare is worth the time, because the maintenance fees alone are reason enough not to ever consider a timeshare.  Maybe if the maintenance fees locked in for life then you’d eventually catch up to where it would become a good deal, but instead the maintenance fees increase regularly.

About the only benefit to a timeshare that we can see is if you are not disciplined enough to go on vacations every year, a timeshare may help with that.  Since you are already paying for a place to stay it might motivate you to go and use what you are paying for.