Timeshares Still Not An Investment? Simply Not True.

November 30th, 2010

An interesting article appeared in my RSS feed recently; making the claim that, according to “legal experts,” timeshares are still not an investment. Having spoken to thousands of owners about their timeshares, I have to take issue with this perspective. Timeshare itself can be hard for even experts to quantify, and the view that it is simply “not” an investment is not only an oversimplification; it can pose a danger to timeshare owners’ interests. At the core of this issue there are actually two separate arguments:

  1. In the past, timeshare developers have come under fire for allowing/ignoring sales reps who “pitch” investment potential to consumers. The idea being that buying timeshare is akin to buying whole ownership real estate, and that the owner should expect the timeshare’s value to rise dramatically over the years. These sort of “pitches” are clearly unethical, possible illegal, and damaging to the timeshare industry as a whole. Fortunately today, this practice has been largely eliminated (at least in the U.S), and developers now openly deny timeshares’ investment potential.
  2. The secondary argument is more subtle: Timeshare itself is not an investment, should not be considered real estate, and costs of ownership will soar unchecked in perpetuity. Sadly, this argument seems to be gaining ground with myriad disenchanted owners, who find selling at a fair price can be difficult in the current market. There exists a real danger that, if enough owners believe timeshare is not an investment and act accordingly, this idea could become a self-fulfilling prophecy; leaving timeshare in the “ash heap of history.” (Along with over $100 Billion of Americans’ hard-earned dollars.)

Just what constitutes an investment anyway? According to the Merriam-Webster Dictionary, an investment is

“the outlay of money usually for income or profit: capital outlay; also: the sum invested or the property purchased.”

Even the developers agree that timeshare should not be bought “for profit,” but timeshare does involve a “capital outlay” and is a “property purchased.” Thus, I think it safe to conclude objectively that timeshare is, by definition, an investment. As such, it carries with it both rights and responsibilities: You have a right to use your timeshare during the designated time period, and you have a responsibility to pay for the maintenance of your timeshare property. Beyond these basic concepts, you have a right to expect to recoup a “fair value” for your timeshare when you decide to sell, and you have the responsibility to ensure your resort is properly managed – including closely monitoring increases in your maintenance fees.

Ironically, the thing timeshare owners must do to protect their investment, is the very thing denying timeshare is an investment discourages: Take Ownership of Your Timeshare.

Like it or not, if you own timeshare, you have invested in real property. It will not go away; you will pay property taxes, you will pay maintenance fees, you will pay to insure your property, and you should attend HOA/POA meetings, you should take an active interest in the operations at your resort. Protect your timeshare investment as you would any other – and be leery of headlines that begin with “Legal Experts…”

Entry Filed under: ARDA,Resale Market,Timeshare Owners,Using Your HOA

3 Comments Add your own

  • 1. sportingbet bonus  |  December 29th, 2010 at 6:13 pm

    I came across your website, i think your site is interesting, keep us posting.

  • 2. Barbie Monroe  |  December 30th, 2013 at 12:02 pm

    Timeshares can be a terrific purchase for some families, as they also can be a giant rip off for others. 50 years ago, also known as Holiday Home Sharing or timeshare travel, timeshares were created with the idea of offering fully furnished accommodations for a lower price than a full-time ownership. Nowadays, timeshares have become a very popular vacation option, yet lots of people do not completely understand how timeshares operate.

  • 3. Charles Moranis  |  December 30th, 2014 at 5:54 pm

    First, I would like to thank you for this writing. I would then like to coment on a couple of points.

    1St. I would like to say, that the timeshare deception of it is an investment is still being bandied around, and is alive and well in 2014! Over the past few years, I have personally subjected myself to the grueling experience of numerous TS presentations, kind of as an evaluation, and discovered that in fact, these deceptive practices are still being practiced, in order to deceive their prospective buyers into signing. Also after having resisted, and with a bit of difficulty, being allowed to leave, I was able to see some of the contracts that some buyers had the misfortune to sign. This is when I noticed, in some cases, but not all, that at the end of the signing they were presented with a form which stated that none of the things which were expressed during the presentation, were ever said at all, and asked to initial, and sign that form. (Kind Of Shady If You Know What I Mean) No recourse at all if you know what i mean.

    2Nd. Until the Resorts, Developers, & Sales people are held accountable for these practices, and not allowed to turn a blind eye in order to save face (All For The Money Man, It’s All For The Money), then the TS isues are only going to worsen, and the Industry will continue to lose credibility. With all the $millions/billions$ of dollars spent on MEAT PUPPET LAW MAKERS, you would think they would realize this. But sadly GREED CONQUERS ALL in this dismal industry. The fall of Babylon is INEVITABLE, as it was in the past!

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