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Why a timeshare is a BAD investment

Question:

That sales guy told me buying a timeshare is a smart move. I'd get a foot in the hot real estate market and could even make profit renting it out. I'll even imrove my credit history by making regular payments.

Answer:

The last part about building credit is true. The rest - in most cases - is not.

Facts:

  • The developer pays staff (on commission) to lure you into a sales presentation. Who pays that commission? Right, you, the buyer.
  • To entice you to listen to their 60 minute presentation, you get a GIFT. That can be a $50 - $150 value, typically some sort of coupons. I've once received $100 in casino money. Let's say 20 people come into that sales presentation - that's $2,000 in gifts. Who pays for that? The one person out of the 20 who signs the paper.
  • All the sales people at the presentation wear Armani outfits and drive big BMWs. Who pays for that again? Right, you, the buyer.
  • A good investment increases its value or at least holds its value. The sales people will tell you that the price of timeshares has steadily gone up. What they do not tell you is that there are web sites where people *desperately* try to sell their "used" timeshare - typically for 30%- 50% of the "new" price.
    I once brought the resale market up when I spoke to such a sales person and they dismissed it as "USED" (as if it was a 10 year old car).

Note:
On the right hand side you'll see some ads for timeshare resales at a fraction of what the developer asks for. Go check them out.
At those prices, a timeshare actually may make a lot of sense, depending on your personal situation.


Generated 20:00:47 on Jul 9, 2020