• September 28, 2021

Is a Timeshare a Good Investment?

If you have ever been invited to attend a timeshare presentation (possibly with the incentive of a free hotel stay or dinner discount), it might be that you have considered this form of vacation accommodation.

With a timeshare, you are buying into a property that will give you a place to stay at certain points throughout the year, which is ideal if the property is based at a desirable vacation resort. So, making the decision to purchase a timeshare might seem look a good idea.

But is a timeshare a good investment? Well, while there are certainly benefits to having a timeshare, it isn’t actually a good investment at all. This isn’t to say you shouldn’t consider the possibility but there are a few things you need to know.

What Is a Timeshare?

A timeshare is a vacation property with a shared ownership model. So, rather than buying a holiday home outright, you are only paying for your rights to use the property at certain times throughout the year.

Why Isn’t a Timeshare a Good Investment?

If you’re thinking about buying real estate as an investment, you want to choose a property that you can rent out as a landlord or sell for a profit. You can buy real estate at an auction or from any property seller online or on the high street. Such properties, if chosen well, can be considered good investments.

But What About Timeshare Properties?

Well, as we said, you aren’t buying it outright. That means you won’t own the property. You will have the right to use it every year but you won’t have the right to rent it out to others as long-term living accommodation and you won’t be able to add value to it.

So, don’t be fooled by marketing speak. Timeshare sellers often use the term ‘vacation ownership’ at presentation meetings but the truth is, you are only owning your right to use it for vacation purposes. You can still make money back by renting out your allotted time slot if you decide not to go on vacation one year but it’s not a long-term investment property.

Is a Timeshare Worth It?

A timeshare isn’t an investment in the traditional sense, but if you want accommodation for your annual vacations, then it is worth paying for. You are basically investing in your leisure time rather than profiting your finances, although you can save money with a timeshare as you won’t need to pay for hotels. This is assuming you want to go on vacation to the same place year after year.

However, there are drawbacks.

For starters, timeshares are expensive. If you think you will make vacation savings then fair enough, but you shouldn’t pay for property that you don’t intend to use every year. There have also been cases where people have been scammed, so always check the fine print before signing your rights to a timeshare. Timeshares are also hard to resell although, with the services of the best timeshare exit companies, the process can be made easier.

So, be mindful before attending any timeshare presentations. Salespeople can be very pushy and you don’t want to purchase something you can’t afford or don’t need. You don’t want to become the victim of a scam either.

Think carefully before you sign any contract but know that, if you want to invest in property for profit, a timeshare isn’t a good investment. Consider buying a rental property of a fixer-upper instead.

A pretty interesting post, huh?

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