When you financially strip down timeshares, they certainly are not as attractive or as sexy at first blush. If you take away all the trappings like the exotic locales, the seemingly low cost per vacation and the over-friendly salespeople, you potentially take on a growing financial burden that may last your entire life. Even if you are considering a resale timeshare for a low upfront fee, be sure to figure out how much it may cost you in the future.



The idea of a timeshare sounds fantastic. You can purchase one week of use of a condo unit at a luxury resort that normally would be completely unaffordable if you were to buy the unit outright. Although there is typically a high front-end fee to purchase a timeshare, a good timeshare salesperson can go through the finances and magically convince you how you'd actually save money in the long run. The annual maintenance fee sounds reasonable in order to keep the unit in tip-top shape.

But what is it really? Timeshares are prepaid vacations. You pay for time at the resort in full without ever going. The average upfront cost for a timeshare in 2007 according to ARDA (American Resort Development Association) was $19,000. The purchase typically grants you a lifetime of one week stays. So, if you used it 19 times, the cost per vacation week would end up about $1,000 per vacation week (or roughly $140 per day). Not bad for luxury resort accommodations for up to 4-6 people.

Turn it around now. What if you only use it once or twice ever? Those one or two vacations would thereby cost a total of $19,000. Imagine the type of service and amentities that you should receive if you paid $19,000 for accommodations for only 1-2 weeks. Your vacation would be far and away more lavish than what your timeshare could ever provide.

Now, imagine that all the upfront cost disappeared. What if the only cost of a timeshare was the annual maintenance fee? In 2007, the average timeshare maintenance fee was approximately $600 for a 1-bedroom suite. Six-hundred dollars (US) for one week at a luxury resort for 4-6 people. That's a deal, isn't it?

The problem lies in the fact that timeshare owners do not use their timeshares every year. If you miss a year or two, the cost jumps to $1,200 and $1,800 for the same vacation week. Suddenly, the wonderful travel savings disappear like a bad magic trick. Plus, increases in maintenance fees occur regularly, so that an initial $600 a year turns into $700 or more rather quickly.

While some owners may still pay $1,200 to $1,800 for a great vacation with great family & friends every two to three years, adding these totals to the prorated upfront cost ($19,000) would cause any owner significant concern. Yet, there is one final fee that is often overlooked -- the special assessment. This fee can be instituted almost at will by the timeshare developers onto unsuspecting timeshare owners.

Instead of prepaying all the fees associated with ownership, there are so many vacation alternatives out there; renting a timeshare being one of them. Instead of paying annually to "own" a timeshare, why not check out the resort of your choice and stay in an available timeshare unit for a fraction of the cost? There are also countless travel websites with great bargains on places to stay around the world and inexpensive deals to help get you there.

Upon final analysis, owning a timeshare does not make financial sense for anyone who does not consistently use it. Based on empirical evidence of the raising timeshare rental market, that is true for most people. The final cost is simply too high.