A timeshare, also known as a vacation or fractional ownership, is ownership in real estate where a residential property is split among many “owners” who bought the right to use the property for a specific period of time. Usually this is for one or two weeks per year.
Throwing money in to a timeshare is not a good investment as it will never generate money for you. With an investment also, you are typically able to sell it eventually for a profit. Timeshares are never a good investment, especially if you’re looking at it financially. An investment almost always is an income generator and/or appreciates in value. Timeshares do neither of those.
Timeshares have multiple negatives and should never be used as an investment. These include:
Paying upfront for something which you may not use annually and tying up your money that could be used for many other purposes, including paying off your house, and/or retirement savings.
Taxes, finance charges, closing costs, annual maintenance fees, broker commissions, and assessments are all mandatory expenses, even if you do not use the timeshare.
Owners often feel like they MUST have to use their timeshares even if the timing may not be good and convenient or money for travel is scant.
As mentioned above, timeshares do not usually appreciate in value. Most timeshares will typically sell for less than 50 percent of their original purchase price, if it can be resold at all. Timeshares are in a very crowded market. Therefore, selling for a profit is not typical since you would need to convince someone to pay more for a used unit as well as factor in all the fees you paid over the years you owned it. Just do a GOOGLE search on “timeshare exit” to get an idea of how many firms exist to help timeshare owners get out of their contracts.