Time Share: The Vacation Dream or Financial Nightmare

Are you considering a time share? Here’s what you need to know before you buy.

Time shares, or timeshares, are a popular way of owning a vacation property without paying the full price. They allow you to use a resort unit for a certain period of time each year, usually one week, in exchange for a fee. You can also exchange your time share with other owners to visit different destinations.

Sounds like a great deal, right? Well, not so fast. Time shares are not as simple or as cheap as they seem.

In fact, they can be a financial trap that costs you more than you bargained for.

In this article, we will explain why time shares are bad, what are time share points, how much do time share points cost, and the pros and cons of time shares.

We will also show you how time shares can affect your financial independence and what are some better alternatives to enjoy your vacations.

Key Takeaways

Why Time Shares are Bad

Time shares are bad for many reasons. Here are some of the main ones:

• High upfront and ongoing costs. Buying a time share is not a one-time purchase. You have to pay a large initial fee, which can range from $10,000 to $50,000 or more, depending on the location, size, and quality of the unit. You also have to pay annual maintenance fees, which can average $1,000 per year, according to ARDA, the trade association for the time share industry. These fees can increase over time due to inflation, repairs, or special assessments. Additionally, you may have to pay other fees, such as taxes, utilities, insurance, exchange fees, reservation fees, or membership fees. These fees can add up to thousands of dollars per year, regardless of whether you use your time share or not.

• Hard to sell or cancel. Selling a time share is not easy. The resale market is saturated with unwanted time shares, and the demand is low. You may have to sell your time share for a fraction of what you paid for it, or even pay someone to take it off your hands. You may also have to deal with scams, frauds, or high-pressure tactics from brokers or companies that claim to help you sell your time share. Cancelling a time share is also difficult. You may have to face legal hurdles, penalties, or lawsuits from the time share company or the lender. You may also have to hire a lawyer or a specialized service to help you get out of your contract, which can cost you more money and time.

• Limited availability and flexibility. Using a time share is not as simple as booking a hotel. You have to plan your vacation well in advance, usually a year or more, to secure your desired unit, location, and season. You also have to abide by the rules and restrictions of your time share contract, such as the length of stay, the check-in and check-out dates, the exchange options, and the cancellation policies. If you want to change your plans, you may have to pay extra fees, lose your points, or forfeit your week. You may also have to compete with other owners or members for the same units or destinations, especially during peak seasons or holidays. Moreover, you may have to deal with poor customer service, low-quality maintenance, or outdated facilities.

• Hidden risks and fees. Buying a time share is not a risk-free investment. You may have to face some unexpected problems, such as:
  • Foreclosure. If you finance your time share purchase with a loan, you have to make monthly payments, plus interest, for several years. If you fail to make your payments, you may lose your time share to foreclosure, which can damage your credit score and your financial future.
  • Bankruptcy. If the time share company or the resort goes bankrupt, you may lose your time share or your rights to use it. You may also have to pay more fees or face legal issues to protect your interests.
  • Fraud. If the time share company or the salesperson misrepresents or omits important information about the time share, such as the costs, the benefits, the risks, or the contract terms, you may end up buying a time share that does not meet your expectations or needs. You may also have to deal with false or misleading advertising, high-pressure sales tactics, or bait-and-switch schemes.
  • Liability. If you or your guests cause any damage or injury to the time share property or to other people, you may be liable for the costs or the consequences. You may also have to pay for any repairs or replacements that are not covered by the maintenance fees or the insurance.

These are some of the reasons why time shares are bad and why you should avoid them.

In the next part of the article, we will explain what are time share points, how much do time share points cost, and the pros and cons of time shares.

We will also show you how time shares can affect your financial independence and what are some better alternatives to enjoy your vacations. Stay tuned!

Time Share Points: What They Are and How They Work

Time share points are a form of currency that you can use to book different units, locations, and seasons within a time share network. They are supposed to give you more choice and value, but they also have drawbacks. Here is how they work:

• You buy a certain number of points. When you buy a time share, you can choose to buy a fixed week, a floating week, or a certain number of points. The number of points you buy determines how much time and where you can use your time share. For example, if you buy 10,000 points, you can use them to book a one-bedroom unit for one week in a low-demand resort, or a studio unit for two weeks in a high-demand resort, or any other combination that matches your points.

• You pay an annual fee for your points. Just like a fixed or a floating week, you have to pay an annual maintenance fee for your points. The fee depends on the number of points you own, the time share company, and the resort. On average, a time share point costs about $9 per year, according to ARDA. This means that if you own 10,000 points, you have to pay $90,000 per year in maintenance fees, regardless of whether you use your points or not.

• You use your points to book your vacation. To use your points, you have to log into your time share account and search for the available units, locations, and seasons that match your points. You can also exchange your points with other owners or members within the same network or with an external exchange company, such as RCI or Interval International. However, you may have to pay extra fees, such as exchange fees, reservation fees, or membership fees, to use this option. You also have to follow the rules and restrictions of your time share contract, such as the booking window, the cancellation policy, the expiration date, and the rollover limit of your points.

• You enjoy your vacation. Once you book your vacation with your points, you can enjoy your time share unit and the amenities and services of the resort. You can also create family memories and explore new destinations.

Pros and Cons of Timeshares

Time shares, or timeshares, have some advantages and disadvantages. Here are some of the pros and cons of time shares:

Pros of Timeshares

• Sense of ownership. Some people like the idea of owning a vacation property, even if it is only for a fraction of the time. They feel more comfortable and familiar with their time share unit and resort, and they can personalize it to their liking. They also feel more committed and motivated to take vacations and use their time share.

• Amenities and services. Time share resorts usually offer some amenities and services that can enhance your vacation experience, such as pools, spas, gyms, restaurants, bars, entertainment, activities, concierge, housekeeping, and more. You can also access the amenities and services of other resorts within the same network or exchange company, if you use your points or exchange options.

• Family memories. Time shares can provide an opportunity to create family memories and traditions, especially if you visit the same resort or destination every year. You can also share your time share with your friends or relatives, or gift it to them, as long as you follow the rules and restrictions of your time share contract.

Cons of Timeshares

• Expensive. Time shares are expensive, both upfront and ongoing. You have to pay a large initial fee, which can range from $10,000 to $50,000 or more, depending on the location, size, and quality of the unit. You also have to pay annual maintenance fees, which can average $1,000 per year, according to ARDA. These fees can increase over time due to inflation, repairs, or special assessments. Additionally, you may have to pay other fees, such as taxes, utilities, insurance, exchange fees, reservation fees, or membership fees. These fees can add up to thousands of dollars per year, regardless of whether you use your time share or not.

• Restrictive. Time shares are restrictive, both in terms of availability and flexibility. You have to plan your vacation well in advance, usually a year or more, to secure your desired unit, location, and season. You also have to abide by the rules and restrictions of your time share contract, such as the length of stay, the check-in and check-out dates, the exchange options, and the cancellation policies. If you want to change your plans, you may have to pay extra fees, lose your points, or forfeit your week. You may also have to compete with other owners or members for the same units or destinations, especially during peak seasons or holidays. Moreover, you may have to deal with poor customer service, low-quality maintenance, or outdated facilities.

• Risky. Time shares are risky, both financially and legally. You may have to face some unexpected problems, such as foreclosure, bankruptcy, fraud, or liability, as we explained in the previous section. You may also have to deal with scams, frauds, or high-pressure tactics from brokers or companies that claim to help you sell or cancel your time share. You may also have to hire a lawyer or a specialized service to help you get out of your contract, which can cost you more money and time.

• Stressful. Time shares can be stressful, both emotionally and mentally. You may have to deal with the guilt, regret, or frustration of buying a time share that does not meet your expectations or needs. You may also have to deal with the hassle, anxiety, or pressure of booking, using, or exchanging your time share. You may also have to deal with the conflict, resentment, or disappointment of sharing or gifting your time share with your friends or relatives, especially if they do not appreciate it or use it properly.

These are some of the pros and cons of time shares. As you can see, the cons outweigh the pros, and the benefits are not worth the costs.

In the next section, we will show you how time shares can affect your financial independence and what are some better alternatives to enjoy your vacations.

How Time Shares Affect Financial Independence

Financial independence is the state of having enough income to cover your living expenses without having to work. It is achieved by saving and investing your money wisely and living below your means. Time shares affect financial independence negatively by reducing your cash flow, increasing your debt, lowering your net worth, and limiting your investment opportunities. Here is how:

• Reducing your cash flow. Cash flow is the amount of money that you have left after paying your expenses. It is important for financial independence because it allows you to save and invest more money, or to spend it on things that matter to you. Time shares reduce your cash flow by requiring you to pay high upfront and ongoing fees, regardless of whether you use your time share or not. These fees can eat up a large portion of your income and leave you with less money to save, invest, or spend on other things.

• Increasing your debt. Debt is the amount of money that you owe to others. It is detrimental for financial independence because it reduces your cash flow, increases your interest payments, and lowers your credit score. Time shares increase your debt by requiring you to finance your purchase with a loan, which can have high interest rates, long repayment terms, and unfavorable conditions. These loans can add to your existing debt and make it harder for you to pay off your debt or to borrow money for other purposes.

• Lowering your net worth. Net worth is the difference between your assets and your liabilities. It is a measure of your wealth and your financial health. It is essential for financial independence because it represents the amount of money that you have available to support your lifestyle. Time shares lower your net worth by being a depreciating asset, which means that they lose value over time. Time shares also have low resale value, which means that you may not be able to recover your initial investment or even sell your time share at all. Time shares also have high opportunity costs, which means that you miss out on the potential returns that you could have earned by investing your money elsewhere.

• Limiting your investment opportunities. Investment opportunities are the chances that you have to grow your money by putting it into different assets, such as stocks, bonds, real estate, or businesses. They are crucial for financial independence because they allow you to increase your income, diversify your portfolio, and achieve your financial goals. Time shares limit your investment opportunities by locking up your money in a non-liquid, non-productive, and non-diversified asset. Time shares also expose you to more risks, such as market fluctuations, legal issues, or frauds.

These are some of the ways that time shares affect your financial independence. As you can see, time shares are not a good investment, and they can hinder your progress towards financial independence. In the final section, we will show you some better alternatives to enjoy your vacations.

Better Alternatives to Time Shares

Time shares are not the only way to enjoy your vacations. There are many better alternatives that can offer you more flexibility, variety, and value, without the high costs, risks, and hassles of time shares. Here are some of them:

• Renting a vacation property. Renting a vacation property is a simple and convenient way to enjoy your vacations. You can use online platforms, such as Airbnb, VRBO, or Booking.com, to find and book a vacation property that suits your preferences, budget, and schedule. You can choose from a wide range of options, such as apartments, houses, cabins, cottages, or villas, in different locations, such as cities, beaches, mountains, or islands in different locations, such as cities, beaches, mountains, or islands. You can also enjoy the amenities and services of the property, such as kitchen, laundry, wifi, parking, or pool. You can also cancel or modify your reservation without paying high fees or penalties. Renting a vacation property can save you money, give you more flexibility, and offer you more variety than a time share.

• Joining a travel club. Joining a travel club, like AAA Club Alliance, is another way to enjoy your vacations. A travel club is a membership-based service that gives you access to discounted rates on travel products, such as flights, hotels, cruises, car rentals, or tours. You can use online platforms, such as Expedia, Priceline, or Travelocity, to find and book a travel deal that suits your preferences, budget, and schedule. You can choose from a wide range of options, such as destinations, dates, durations, or activities. You can also cancel or modify your reservation without paying high fees or penalties. Joining a travel club can save you money, give you more flexibility, and offer you more variety than a time share.

• Using a home exchange service. Using a home exchange service is another way to enjoy your vacations. A home exchange service is a platform that allows you to swap your home with another person for a certain period of time. You can use online platforms, such as HomeExchange, to find and book a home exchange that suits your preferences, budget, and schedule. You can choose from a wide range of options, such as types, sizes, and locations of homes, in different countries, regions, or cities. You can also enjoy the amenities and services of the home, such as kitchen, laundry, wifi, parking, or pool. You can also cancel or modify your exchange without paying high fees or penalties. Using a home exchange service can save you money, give you more flexibility, and offer you more variety than a time share.

• Saving and investing your money. Saving and investing your money is the best way to enjoy your vacations. By saving and investing your money wisely and living below your means, you can achieve financial independence and have enough income to cover your living expenses without having to work. This means that you can take vacations whenever you want, wherever you want, and however you want, without worrying about the costs, risks, or hassles of time shares. You can also use your money to pursue your passions, hobbies, or goals, or to support your family, friends, or causes that matter to you. Saving and investing your money can give you more freedom, happiness, and fulfillment than a time share.

Final Thoughts about that Time Share

Time shares are a bad way of owning a vacation property. They have high upfront and ongoing costs, they are hard to sell or cancel, they have limited availability and flexibility, and they have hidden risks and fees.

They also affect your financial independence negatively by reducing your cash flow, increasing your debt, lowering your net worth, and limiting your investment opportunities. There are better alternatives to enjoy your vacations, such as renting a vacation property, joining a travel club, using a home exchange service, or saving and investing your money.

These alternatives can offer you more flexibility, variety, and value, without the high costs, risks, and hassles of time shares. Therefore, we recommend that you avoid time shares and choose one of these alternatives instead. You will be happier, wealthier, and more independent.

Thank you for reading this article. We hope that you found it informative and helpful. Have a great day and happy travels!