Dollar Scholar Asks: Is Buying a Timeshare a Good Investment?

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Growing up in Orlando gave me a snowbird-sized chip on my shoulder. Even as a kid, I remember watching with derision as out-of-towners snarled traffic on the way to their gaudy timeshares.

But as an adult, I've started to reconsider my grudge — against timeshares, that is.

I recently read a report that claimed 61% of recent timeshare purchasers are my age, then another that boasted about how modern timeshares have updated their perks to include lazy rivers, full kitchens and hula classes. I have to admit, that sounds pretty sweet.

Have I been wrong this whole time?

Is buying a timeshare actually a smart way to save money?

Timeshares date back to the '60s or '70s, depending on which source you read. Two early examples: In Switzerland, a man named Guido Renggli sold right-to-use packages for a 13-unit resort, and in Florida, the Caribbean International Corporation offered folks a 25-year "vacation license" that unlocked weeklong annual stays in the Virgin Islands.

"A timeshare product is essentially buying an amount of time at a resort, typically … in a week increment," says John Geller, president and CEO of Marriott Vacations Worldwide.

The idea is that most people can't afford a vacation home that they only use once or twice a year, so they purchase 1/52nd of one. Geller says the biggest financial pro of a timeshare is that "when you buy, you're locking in a big chunk of future costs" as opposed to having to deal with fluctuating resort costs that climb over time.

Ownership is most common among people who make over $250,000 a year, according to a 2024 report from the American Resort Development Association. The average starting price is $23,940. (Note that I said "starting price" — more on this later.)

Geller tells me that a lot has changed in the timeshare industry over the past 40 years.

They used to center around a same time, same place model, but in recent years many timeshares have shifted to a points system. This is more resort-agnostic: For example, Marriott Vacations Worldwide's setup allows customers to use their timeshare points to stay at a variety of branded resorts, from the Ritz-Carlton Club in Vail, Colorado, to the Westin Resort and Spa in Cancún, Mexico, and book experiences like cruises or safaris.

Timeshares tend to work well for young families who like patronizing a specific brand and require more than a single hotel room for a comfortable stay. They also, crucially, are "good for people who take the time to understand the contract and other fees involved," says Matt McGraw, a wealth advisor at Marshall Financial Group.

In addition to the initial purchase price, timeshares come with annual maintenance fees that increase over time. These costs can add up quickly: ARDA reports that between 2016 and 2021, maintenance fees rose by 15%, hitting $1,120 a year.

"It's kind of like a car purchase," McGraw says. "There are ongoing costs to the car to keep it up, there's a down payment you have to make, and usually at the end — of the life of you or the car — you want to get rid of it."

Unfortunately, owners often don't recoup the money they put into their timeshares. They generally don't appreciate in value, and because the market is so saturated, it can be hard to earn my initial investment back. In fact, when I'm ready to sell my timeshare, it can actually COST me money.

McGraw, a certified financial planner, says there are a handful of common ways to get rid of a timeshare, all with pretty significant downsides. Just like how timeshare salesmen are infamous for being flashy and oversimplistic, timeshare resale is infamous for being a sketchy cottage industry.

I can work with a realtor or attorney to resell it — but the fees tend to be high, and they're often not even able to sell the timeshare. I can use an online broker where I pay to post my timeshare — but due to the glut of inventory, sales often take a long time.

The Federal Trade Commission even has a page on its website devoted to timeshare exit scams.

"You'll see or hear lots of ads from companies claiming to be experts at selling timeshares — they’re online, on the radio and on social media," it reads. "But sometimes these companies exaggerate or flat-out lie about what they offer you. They take your money and then do little to nothing to help you."

The bottom line

Timeshares do make sense for some people's lifestyles, but buying one is a tricky financial decision because of the long-term nature of the contract I'm entering.

Research is key: McGraw advises his timeshare-curious clients to explore reputable companies that have lots of properties all over the world and have wide-ranging points systems that let them take advantage of different locations.

"Look, they can work for people," he says. "The important thing is to understand the terms of the contract and [not] get caught up in the initial shiny-new-toy type of offer that's presented."

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