Read this before you go to a timeshare sales presentation

Sitting through a hard-sell timeshare presentation can be emotionally draining and hazardous to your checkbook. If you’re not careful, you can find yourself spending a lot of money and locked into a long-term financial obligation that can be very hard or even impossible to get out of.

There are many problems to be aware of before buying a timeshare. The Federal Trade Commission has a web page of timeshare warnings. You also can read discussions of those problems in the timeshare section of our forum.

While those and other sources describe the problems, let me share with you what helped my wife and me resist the hard sell and get away without buying.

We recently attended a sales presentation at a timeshare resort in Hawaii. While the salesman went through his pitch, a large, high-definition display behind his desk continuously showed all of the wonderful resorts and hotels we could stay at if we just said yes. He caught me looking at the screen and asked me if those locations were on our vacation bucket list.

There’s an old marketing saying that you don’t sell the steak, you sell the sizzle. Timeshare salespeople are selling the sizzling dream of a lifetime of annual vacations on tropical beaches, or lounging around infinity pools or soaking in hot tubs after a day of skiing. They are trained to understand that our emotions and wishes are powerful buying motivators. Emotional and irrational responses are exactly what they prey on.

In case you’re wondering, we went to the presentation because we were curious about that resort and were considering staying there. They also offered us attractive incentives to attend. Depending on the resort and the developer, the inducements can range from a modest gift card or free meals to lodging discounts or piles of loyalty points you can use at their other properties. In our case, the incentives they offered for attending made us feel it would be worth not only our time but also the energy it would take to resist.

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What helped us the most was knowing that you don’t have to be a timeshare owner to stay at those resorts. When you realize that very important point, it frees your mind to think rationally about the critical element of cost.

So let’s look at the numbers and then at how to stay there without buying.

First, consider the buy-in price – what you have to pay up front to become an owner. For the property we toured, they wanted $50,000 for the rights to one week in a two-bedroom unit with a partial ocean view. It started out at $56,000 but was reduced by special discounts that the salesman and his manager claimed would only apply if we committed that day.

If you’ve read anything at all about timeshares, you know that the cost doesn’t end with the upfront payment. You also sign a contract to pay an annual maintenance fee. In this case it would be about $5,000 a year, every year. If we wanted a one-bedroom unit, it would cost $32,000 up front with a $2,800 annual maintenance fee.

That maintenance fee can go up each year and have add-ons such as your share of property taxes or special assessments. The contract saddles you with a liability – money that you owe and will owe every year even if you can’t take a vacation.

The salesperson will tell you the timeshare is an investment. But it is not. Most dictionaries define an investment as money that you put to work with the intent of earning a profit or generating additional wealth. Buying a timeshare won’t do either.

Since they try to call it an investment, think about how you could actually invest the money instead of using it for the buy-in.

As I write this, a number of banks are offering insured, one-year certificates of deposit paying 1.62 percent interest. That’s not much, but it’s absolutely safe. If you put that $50,000 in such a CD, after one year, your vacation fund would have another $810 in interest to add to the $5,000 you did not have to pay as a maintenance fee and you would still have your original $50,000. You can do the same year after year, spend $5,000 on vacation lodging, and be far better off financially than if you gave the money to the developer.

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What if you invested it in a no-load, low-cost, mutual fund that tracks the S&P 500 Index? Depending on which metric is used, the long-term annualized return on the stock market is about nine percent. I used a financial calculator to compute what that $50,000 might be worth in the future if invested.

Since the salesman suggested we think about that payment as amortized over 20 or 30 years of vacations, I used those as the time periods in the calculations. Instead of the market’s historic return, I used a more conservative figure of seven percent. The calculator says that after 20 years, the initial $50,000 would grow to more than $193,000.

So, would I rather have $193,000 or nothing but an annual obligation for $5,000? Would that really be a hard decision for you?

Those investment calculations assume that you actually have the cash for the buy-in. However, if you have to borrow that money, you definitely should not do it. It will cost you a lot more because of the interest you’ll have to pay and in almost all cases you will owe more than it’s worth.

The fellow trying to sell us offered financing with $6,000 down and monthly payments of $784 for 10 years, making the real purchase price about $100,000 plus the annual maintenance fee.

Don’t let the salesperson arrange financing and don’t put it on your credit card. If you have to borrow money to buy in, you will have two expensive, ongoing financial obligations. What if your circumstances change, say because of a job loss or major unexpected expenses?

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If you voice that concern, the salesperson may tell you that you can just sell your interest. But the reality is that your timeshare ownership is unlikely to ever be worth as much as you initially paid. Owners who try to sell have a hard time doing so, generally taking a steep discount if they can sell at all. You can verify this for yourself by looking at the websites where owners go to try to unload their timeshares.

Here is something to think about: If they are such good investments, why are so many timeshare owners trying to sell and willing to take a loss?

And why are so many willing to rent you their units, sometimes for less than the annual maintenance fee?

As I mentioned above, and what the salespeople won’t tell you, is that you don’t have to be an owner to stay at many of the nicest timeshare properties. There are websites where you can find timeshare owners trying to rent out their weeks. I know because we have utilized those several times.

And the property we toured? As I write this, travel websites are showing units there for a week priced at not much more than the maintenance fees we were quoted. If you or I can stay there anyway, why pay the buy-in?

Vacationing at a beachfront timeshare resort can be wonderful. But it’s even better when you do it without giving the developer a big upfront payment. As you wouldn’t buy a restaurant just to have a great steak, don’t fall for the pitch that you must buy a timeshare to have a great vacation or that it’s a good deal if you do.

Abe Wischnia

Abe started his working career as a television news reporter and newscaster before moving to corporate communications and investor relations. Now retired and having learned useful tips from, one of his volunteer activities is writing for us.

  • Ben

    You’ve done a great job describing why timeshares are an awful value for almost everyone. Everyone should absolutely read this before going to a timeshare pitch.

    I love going on timeshare tours and have gotten a bunch of great stuff over the years. My practical tips are:

    1. Don’t expect to get out early, just relax and enjoy the tour and food. You expect them to hold up their end of the bargain, you have to hold up yours.
    2. At the sales pitch, just say “no, thanks”, politely, firmly, and repeatedly. If you try to argue why it’s a bad deal, you’re just giving them an invitation to keep you there longer. It can feel rude, but the sales people are trained to keep working on you until you’ve said no a ridiculous number of times.
    3. Don’t even try to make sense of their nonsense numbers, timeshare sales folks are worse than car dealers at manipulating numbers and facts to make you think you’re getting a great value. After attending a couple of these I learned to spot the tricks, or at least some of them, and I couldn’t believe the dishonesty.
    4. If you don’t think you can handle saying no to high-pressure sales tactics, don’t go

  • Hanope

    If you really want to buy a timeshare, find someone selling theirs, especially if they’ve already paid it off and it’s just the maintenance fees. I bet you can buy it from them for $100 or less. They probably want to unload it. And find a cheaper place. My timeshare is $900 a year, my niece took over another one I owned at $700 a year. Both places can be deposited with RCI for points to exchange for thousands of other resorts.

  • Charles

    There’s one simple bit of math you can do that makes timeshares look really bad. At a price of $50,000 for one week, they are selling that 2-bedroom condo for $50,000 * 50 = $2.5million (I’ve generously assumed they keep two weeks open for maintenance). Is that really a $2.5million condo? And, the maintenance? Multiply that by 50 as well. Does it really cost $250,000 a year to maintain that one property? There’s a reason for the hard sell. The margins here are massive!

    And be sure to go to any of the many resale sites online and see how much your investment may be worth resale. Don’t be surprised to find the same property for sale for $0.

  • RichardII

    hmmm. maintenance fees alone… $5,000/7 = $714 per night. I can find a LOT of REALLY nice hotels at that rate AND I can change locations or hotels whenever I want.

  • Patrica

    And if I might add: Look up the time share on TripAdvisor or search ‘negative reviews —-name of place—” on the internet. You may and will carefully review the comments,looking at both extremes and make your decision as to what is right about the place for you. A golf course is NOT a positive for us, nor are 5 kiddy pools. Quiet, luxury, HELPFUL and KIND STAFF are the biggest positives for us.

  • Annie M

    Love this article – truly shows just how much these rip offs really do rip you off. I’d rather take that maintenance money and be able to travel ALL OVER the world instead of being tied to a time share.

  • andi330

    One thing you left out is that they will try to tell you that you can will your timeshare to your family when you die. Thanks mom and dad, for leaving me a financial obligation in your will. We had one place that tried to bill my grandmother’s estate at least 2 years after she died, even though all the beneficiaries had refused the timeshare as an inheritance. The guy who called the executor was advised that the estate had been settled, and at that point he indicated that he would stop attempting payment. But seriously?

  • Bruce Burger

    Amen — and there’s another problem with timeshares: they limit your options for where you go, what property you stay at, what time of year you go, how long you stay, what size unit you have, what dates you stay (e.g., Saturday-Saturday, when flights are most expensive). Your needs and preferences will surely change from year to year. Some timeshares give some flexibility on some of these factors, but nowhere near as much flexibility as if you just booked a hotel/condo on your own.

  • James Dworak

    From Hawaii to the Bahamas. We have 2 timeshares I bought on the secondary market.
    In Hawaii as others stated, they wanted $60k for a week and $3500 a year. I met people who bought 6….
    My timeshare base is in Florida . I never book that location as I can call and rent it for less than the annual maintenance costs. The difference? Your home resort you can book 12 months out. The other 23 locations you can book , if available, 8 months out. ( I can also book at a cost rci)
    Why do it? I book a $600 a night plus taxes service fees ( that’s $5000/week) for my $1000 maintenance cost.
    A recent visit in the Bahamas we went to a presentation, they won’t let you use a computer to check out their company. ( a $40k one bedroom, $1800 a year fees)Buy now, save. But if a USA company you have 3 days to cancel.
    Online the Same unit I saw for $500. Others try to sell their unit for $35k, never will happen.
    The company says their always getting low on units to sell ( in reality their rebuying the $500 ones being sold online and taking over the other ones that people just stop paying into)
    You get points for what you buy. In my case staroptions that can be traded for “ starponts” yet these starpoints are not worth what a room may cost. Ie fee cost you $1000/year for 81000 points, Trade for starpoints equals only 34000 points. A 5 star hotel room is $350 a night or 20,000 points. Do the math I can only get 1.8 days for my 34000 points that cost $1000.
    Do your due diligence

  • cscasi

    Good points. However, you also have to factor in the original cost of purchasing your timeshares; not just the annual maintenance costs. Any other taxes and fees that need to be included?

  • James Dworak

    My original costs years ago were $3000 and $4000. I paid years later $5000 additional directly with the company “to be in the fold” with everyone else. Don’t think they do that anymore.
    Your yearly maintenance fee includes all fees and taxes. So when you go to the resort there are no hidden fees ( as of a year ago)
    I plan on using my “ Florida” timeshare next year to stay for the 4th time on Kauai where I will also have beach access to the 6 star st Regis.
    Some locations like Disney’s vacation timeshare also have “end” dates so you don’t own in perpetuity FYI

  • LeeAnneClark

    This is a good article, but I think it gives short shrift to one important point – the one point that, in my opinion, pretty much nails why timeshares are a complete waste of money, and should be hammered home to anyone considering one: How much will this cost you per year, and what could you have gotten for that money just by booking a hotel room anywhere you want to go?

    Take the full amount of money you would spend on a timeshare over a particular duration, and then figure out how much that means you have spent for a one-week vacation each year. It’s pretty simple math. Let’s do it on this article’s example – $50,000 down and $5,000 per year.

    If you kept the timeshare for 10 years, you would have spent $100,000 total. That’s $10,000 per year. That’s for a one-week vacation! That’s $1428 a night, just for the lodging. You can stay at a freaking PALACE for that amount of money!

    If you kept the timeshare for 20 years, you’ve spent $150,000. That’s $7,500 per year for a one week vacation – $1071 per night.

    If you kept the timeshare for 30 years, you’ve spent $200,000. That’s $6,666 per year – $952 per night.

    Now take a look at what that would get you for a week’s vacation ANYWHERE IN THE WORLD. I guarantee you that you could stay at a nicer place, at a time you want to go, without being stuck at just the one resort, or having to play games with points or trading or off-season dates.

    Why on earth would anyone want to spend that much money for decades for one week of vacation, and limit themselves to one resort? Or if they want to go somewhere else, be forced to play the points/trading game to find some other place?

    And keep in mind, this is the BEST CASE SCENARIO. This doesn’t even account for financing that original $50K, or the inevitable increases in the $5000 maintenance, or all the other fees and taxes that would inevitably apply, increasing your overall spend. Yes, some people might be able to sell their timeshare once they’re done with it and reduce their total spend…but as the article points out, that’s iffy at best. You may very well not be able to get back much at all, or will have to actually walk away from the $50K in order to stop having to pay that $5K+ per year. And hey, even if you got back your full $50K (highly unlikely), you still have spent $5K a year for a one week vacation – that’s $714 a night, which would get you some pretty nice hotel rooms.

    Do this math on any timeshare before you decide to buy, and I guarantee you, you won’t buy. Think about all the places you could go for that. You can go on a 6-star luxury cruise ship for less! You can get the penthouse in a gorgeous beachfront resort in St. Lucia. You can stay in an over-the-water bungalow in Bora Bora. For LESS.

    This is the most simple math there is on these things – how much per year will it cost, and what could you get for that much money if you just…ya know…booked a hotel room. Why can’t people see this?

  • LeeAnneClark

    Or…you could just book a hotel room anywhere you want to go. And probably for less.

  • LeeAnneClark

    Or you could just stop playing games with points and limitations on how many months out you can book or where you can go, and just…y’know…book a hotel room. Anywhere you want to go, whenever you want to go.

    Do the math and I’ll bet it’s a better deal.

  • James Dworak

    Actually it’s not, I couldn’t even afford it if I booked a night at harborside Atlantis , $600 a night, plus 15% tax plus daily fee. My cost for a week $1000.
    Hawaii, Sheraton princeville, $500 a night plus tax and fees and per night car fee. My cost $1000 for the week. My maintenance cost for my 2 bedroom in Florida you get a one bedroom at those other 2 places. 81000 star options. Studio 67000.
    Cabo, St. John’s, Cancun and several places run by Westin sheraton in the good ole USA
    Oh and for airfare, I’ll book by December 31 for next years hawaii as us bank going from 2 points / dollar for airfare to 1.5. Ie 20000 points = $400 airfare after 1-1-18 $300. So I’ll use 100,000 points for two round trip to Kauai that equals $2000 in airfare . I’m actually going for 2 weeks with points left over. 2 weeks in Hawaii for $2000 plus car food

  • James Dworak

    Fully agree that’s why you buy for a song on the secondary market

  • Chris Johnson

    You can buy a timeshare for 1 cent in some cases. I’ve seen listings on that will pay you to take the timeshare too. Something going for that low (essentially a negative price) sets off very loud alarm bells in my head as to the quality of the product. Kind of like those super-cheap brands of products you see in grocery or dollar stores that you’ve never heard of, and are reluctant to buy because of their dubious quality.

  • LeeAnneClark

    So let me ask you this: how many years did it take to save up enough points to be able to stay at the Atlantis. You say your cost was $1000 for the week, whereas to stay there just booking it, your cost would be $4200 for the week ($600 x 7 nights). Does that apply every single year? You would be able to do that every single year?

    And can you actually BOOK that for when you want to? Is there availability? Or is it one of those things that sound great, but if you tried to actually book it, it’s never available because everyone else wants that deal too?

    I have friends who bought a Salt Lake City timeshare for that exact reason – they were sold on the idea that they could pay a reasonably inexpensive maintenance cost on their SLC condo, and trade it for a condo in fancy tropical paradises like Bermuda, Cabo, etc. But when they went to actually do that – guess what? No availability, or there were other limitations or exclusions, making it impossible for them to book. They never were able to get a SINGLE fabulous vacation out of that timeshare purchase – they ended up only able to get a couple stays at resorts on the ugly end of Virginia Beach and Myrtle Beach. Then they couldn’t offload it on the secondary market – they just walked away from their entire “investment” so they didn’t have to keep paying the annual fees.

    Personally I just don’t see the appeal of playing all these games with points. Maybe you can save a few bucks – but I have better things to do with my time than play point games. I’d much prefer to just vacation where I feel like vacationing. No limitations – no games.

  • BubbaJoe123

    Couple of suggestions:

    1. Be polite
    2. Record everything. Make it very obvious you’re recording everything. If they contest it, just say innocently “why is it a problem – you don’t have anything to hide, do you?”
    3. Say you’ll need everything in writing.
    4. As soon as they mention anything about it being a great investment, or that it will appreciate in value, say, “well, in that case, you’ll have no issue providing me with a written guarantee that I can sell it back at any time for the full amount I paid.”

  • Hanope

    Many hotel rooms don’t have kitchens, and not all have separate dining and living rooms

  • Hanope

    It’s not that the timeshares are cheap quality, it’s that people are tired of dealing with it every year, have too many to use, or can no longer use. My parents used theirs for many years, but after my dad died and my mom went into an assisted living facility, she couldn’t use them. Had she not had daughters willing to take them, she’d be selling them for a penny. Not as many people want them these days.

  • James Dworak

    In fact I got the yearly maintenance bill on one unit today $1018.
    Each year I pay that and on one unit I receive 81000 staroptions a year the other 96500. Around 176000 points a year.
    Hawaii, Kauai, Maui, Oahu is farther than the Bahamas so easier to book 8 months out. I also don’t book dead center in the middle of the summer season. We can also look at the particular resorts availabilty and we’re flexible.
    A one bedroom on Kauai is 81000 points. I moved some points to 2018 and have 276,000 to pull from.
    If I rented there it would be $600 a night plus 12% tax plus daily fees. I pay the $1018 maintence fee to get those 81000 points.
    Their are a lot of people , my sister in law, who bought at lesser resorts and can trade with rci ( only a $109 fee) resorts if available. How that helped

  • Chris Johnson

    Of course they aren’t of cheap quality, I’ve seen plenty of beautiful timeshare properties, but the concept I was illustrating was similar to that of goods that are priced so low, you are loathe to buy them. Same idea with a timeshare in the classified – if it’s selling so cheap, how good a product is it really?

  • Chris_In_NC

    Abe, this is one of the best articles I have ever read on timeshares. I’m going to keep this link handy. Great job!

  • Chris_In_NC

    Disney timeshares are a bit of an exception, but that’s because of the “cult” of Disney fans. Disney also does a few things to help prop up the value, like the right of first refusal. But, even Disney is doing its best to make resales less attractive by not allowing perks. If you bought in 2011, you are grandfathered in. Also, you really need to like Disney for DVC to be worth the expense.

  • Chris_In_NC

    The ever INCREASING maintenance fee would be the most frightening thing about a timeshare. And its not like you can even opt out. Some timeshare contracts don’t even allow you to abandon the contract!

  • James Dworak

    If I’m not mistaken Disney timeshares also expire after a certain number of years. A way to keep fresh blood in the system. I said no due to that fact.

  • Hanope

    The whole product of a timeshare? Yes, I agree that its not worth as much as it used to. IMO, one of selling features of the timeshare was the kitchen, which allowed one to have a place to store food and fix a few meals. Having the separate dining and living area was nice too, and for places with multiple bedrooms, you can have a larger family stay in one place, as opposed to spread out over multiple rooms in a hotel.

    But with Air BnB and the like, which offer similar features, a timeshare isn’t as unique anymore. Comparatively, a timeshare has to offer a bit more, and some do try, with access to and/or discounts for activities, pools, and such. But for the price involved, even with only maintenance and exchange fees, the costs start to equal out. And not having a timeshare means you don’t have to worry about it, the cost, depositing your week, paying for the deposit company, etc.

    So, IMO, the Air BnB market has taken a big bite out of timeshare interest.

  • LeeAnneClark

    Exactly! That’s why I said my example was a best-case scenario. It assumes that you paid cash for the buy-in and didn’t finance it, and it assumes the fees never go up. But we all know they DO.

    I know there’s someone below trying to justify it financially, but I have looked into timeshares before and I know plenty of people who got suckered in. And when you do that simple math on them (not *their* math, which they always manage to twist), you would ALWAYS be better off just investing your money in a real investment, and spending what you want to on your vacation for a nice hotel room or condo.

    Someone else claims they work for them because you can’t always get a kitchen. I disagree. I don’t know of any tropical/beachy resort areas that don’t have condos available by the week. And AirBnb has completely changed the landscape – you can get a spectacular condo, apartment or house for less than a hotel room. My husband and I spent two weeks in Ireland and Scotland this summer, and AirBnb’d it all around both countries. Every place we stayed was phenomenal, and we didn’t pay more than $350 a night – and that was for the most expensive place, an enormous ancient house filled with antiques with four bedrooms, a huge kitchen and yard, steps away from the beach.

    The response to my comment below from the timeshare fan pretty much exemplifies why, beyond the bad financials, they are not worth it. All the points-this and points-that – he’s gotta own multiple places and pay multiple maintenance fees on places he *owns* that he doesn’t even want to go to, in order to save up enough points to go somewhere he DOES want to go. And even then, while he skirts over this topic, there’s no guarantee he’ll get the places he wants – you are limited in the times you can go, and how far out you can book – and that’s even if you’re one of the lucky ones. EVERYONE is trying to do what he does, and only a few get it. That’s exactly what the salespeople want you to believe – that you can pay $1000 a year and get a place worth $3000. But those opportunities are rare and extremely hard to nab. And what a pain having to play all those crazy games with points and times and dates and YEESH!

    It’s all just a huge scam.

    There are two types of timeshare owners – those who recognize they got scammed and regret it – and those who are deluding themselves.

    Oh, for the record, I actually do know of ONE couple who bought a timeshare and were truly happy with it . They bought into a resort in Costa Rica that they loved. The bought the week of Christmas, and they went there every single year for 15 years – that was the duration of their contract. They never tried to go anywhere else – they loved this place, they knew the people who worked there, and while their yearly maintenance fees did increase, in the end they did save some money over what they would have spent to stay there every Christmas week for 15 years. But this is the only timeshare situation I’ve ever seen make financial sense, and not bog you down with the points game.

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