Why Not Timeshares?
Ellen asks why Dave isn't a fan of timeshares. Dave is more than happy to explain why.
QUESTION: Ellen on Facebook asks why Dave isn’t a fan of timeshares. Dave is more than happy to explain why.
ANSWER: Oh, let me count the ways. Number one, you pay $14,000 or $15,000 or $9,000 or $29,000 to get to use a one- or two-week period of time in a property that you don’t own. You cannot sell it because there’s no market for it. No one will buy your timeshare. So what did you do, effectively? You prepaid the rent on a condo or an apartment or even a home in a luxury area or a resort area for 15 years ahead of time. That’s what you did. You prepaid your rent for 15 years.
Some of the deals work and you can trade them for other weeks in other places, but most of that’s a bunch of hooey. It doesn’t work. Otherwise, you’re going to the same place every year, and you just prepaid your rent. Why don’t you just go down there and rent from somebody? And maybe you don’t want to go there next year, so you go someplace else and rent.
There are a few places you may want to go back to over and over again, but most of us want some variety in our travel. So there’s no market for it for resale. It’s a total consumption item. If you interview people who have bought timeshares, you will find about 97% of them feel ripped off and say that the purchase sucks and they wish they hadn’t done it. When you’ve got anything that has a 97% dissatisfaction rate, that ought to give you a hint. It’s one of the few financial mistakes I haven’t made.
You don’t own an asset here. It’s air. You just consumed it. All you did was rent a hotel room or apartment or condo and prepay your rent for 15 years. That’s stupid. There’s no point in it. You get nothing for doing that except the loss of choices and the loss of your money. That’s why I hate them.