I wrote this post a few years ago and finally found it! In response to a Facebook question about The 5 Worst Financial Tips I’ve Followed (So Far), I’m sharing this give further details about my Tango with a Timeshare.
In my previous post – Tango with a Timeshare, I outlined the timeshare process and my unreasonable fascination with attending timeshare presentations. I’m not proud. This time I want to talk you out of buying timeshares or at least provide alternatives to free yourself if you’ve already taken the plunge.
Personally, I’ve had a so-so experience with the timeshare industry. I love to travel and do travel often. I also love to bring along guests. So the larger accommodations have come in handy. Seven years later, if I had it to do all over again, I would have taken my free excursion and run. When you decide to tango with a timeshare, you can expect the following:
- The average sale in 2009 for a vacation plan was just over $20,000. If you finance the balance, get ready for 18-21% interest rates. Regardless of the purchase location, many companies are US brands and they will initiate foreclosure proceedings if you default. This will negatively impact your credit report.
- Fees, fees, and more fees. The average annual maintenance fee is $646. In addition to your annual maintenance fees which increase every year, you can be charged special assessments with no warning or say-so. You will also pay a “transaction fee” to book each stay which is now $139 for RCI. Each resort property can also impose their fee – anything from mandatory all-inclusive fees to weekly maid service fee. If you book without reading all the details, you could be in for a costly surprise upon checkout.
- Exchange program treadmill. For an extra annual fee, you can exchange your weeks or points and travel to another location in the exchange network. Large network companies like RCI or Interval International host thousands of properties world wide. I’m paying $150 through RCI. The catch is popular destinations like the Bahamas, Jamaica, or Aruba rarely have desirable space available unless you can book 6-12 months in advance.
- These costs only relate to accommodations. You still have to travel and need ground transportation. Unless you work for an airline company, you can generally find comparable packaged deals with recognizable brands and not hook yourself into an ongoing relationship with a questionable timeshare group.
- Quality is not guaranteed. I spend many hours researching potential timeshare properties before we book. It becomes a part time job. I’ve read horror stories from people who’ve visited our timeshare resort. The exchange ratings can be misleading. As a resort begins to slide down the quality scale, many complaints have to be lodged before the rating is adjusted. Do you really want to spend your vacation in a sub par property? Even though the property has been downgraded and receives horrible reviews, we still owe the annual fee. We are literally paying for our mistake – every year.
If you’ve taken the plunge, like 48 million other US households and want out – there are not many options. You can try selling it on eBay. However, don’t expect to recoup your original investment. You can also try donating. Some charities will attempt to sell the property and apply the proceeds to a charitable cause. However, you must have paid the initial up front fee in full and have no outstanding maintenance fees to be considered.
Avoid timeshare resellers. Most charge a ridiculous upfront fee – $400 – $1500 and up – just to list the product. This industry is also rife with scam artist who charge you with no intention of selling your timeshare. Many resellers just use eBay; a task you can do yourself.
If you are not already debt free and/or do not have the cash to pay for it outright, avoid the subject all together. You can apply any vacation ownership fee to your outstanding debts and pay cash for any future vacation plans. Stay away from high pressure sales tactics designed to separate you from your money. That always makes good cents!
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