Timeshare ownership can seem like a great deal because you get the use of a vacation home for a fraction of the amount of money you pay each year for a hotel vacation. Plus, it’s yours to use all your life, and often already. But there are many hidden costs that timeshare companies try to play, but you need to know before you become a timeshare owner.
Hidden Cost: Maintenance Fee
I went to the first time of the presentation, the sales lady wonderful job indicating with hotel prices going up to 10% per year if paid 7 nights in a quality hotel that now costs $100/night, I would have paid the entire cost of buying it in less than 10 years, then I would have used it instead. the rest of my life. It sounded like a lot until he tried to slip the maintenance fee from me.
The maintenance fee for timeshares varies from place to place, but is typically in the hundreds of thousands of dollars a year, whether you use your timeshare weekly or not. As the owner, you are responsible for paying your share of maintenance fees, plus potentially expensive insurance premiums. Especially in tropical destinations where hurricanes can occur, these maintenance fees can be huge. In the above example, I was told that the tax is $700/year, which he did not mention, which is exactly the same as the cost of staying in a hotel at $100/night per week, which is expensive once you consider the purchase price of a timeshare.
Hidden Price: Taxes
Many parts of the world impose a tax on every night you stay on time. It varies, and can be anywhere from nothing to upwards of $20 per night. Ask about the tax on your potential timeshare before you buy and get stuck with an extra charge of over a hundred dollars a week.
The Hidden Cost of Time: Utility
Interestingly enough, the basic maintenance fee does not cover your utilities. Many places will calculate how much electricity you use and bill you for it at the end of the week. This can be very expensive in tropical areas where you run air conditioning all week.
Hidden cost: Transportation
Another important factor to consider is how much time you are away from home and how much it costs you to get there. If round trip tickets are $800 each, with a typical vacation located within driving distance, you’ll be getting a lot of money in the air for your time.
The Hidden Cost of Timeshare: Trading Fees
Many times they are part of a larger network that allows you to use a distributed trading week on another site. This may seem like a lot, but you’ll often have to pay at least $100 to trade in, plus potentially any extra maintenance fees, taxes, and utilities as mentioned above.
Hidden Price: Summary
When you’re looking to buy cash, don’t just be convinced by the purchase price and the commitment to be a lifetime owner. Unfortunately, timeshares cost much more than the purchase price due to maintenance fees, taxes, utilities, transportation, and marketing fees. And that doesn’t even take into account the costs of activities and food while you’re on vacation. Some targeting is good, but not necessarily something good to do if you’re on a tight budget.
