Is a Timeshare Worth It?

The quick answer? It really depends.

Chances are, this has happened to you at least once. You were on vacation when someone offered you the chance to score free tickets to a show or a free restaurant voucher in exchange for sitting through a presentation about timeshares. Whether you accepted that offer at the time or not, the idea of buying a timeshare might hit your radar at some point. But is buying a timeshare a good idea?

What's a timeshare?

Timeshares come in different varieties. But in a nutshell, when you buy a timeshare, you're gaining access to a vacation property you can use for a limited number of days during the year.

For example, you might buy into a timeshare for a condo in Florida. Your ownership of that timeshare might entitle you to two weeks in that condo every calendar year.

The cost of a timeshare can hinge on a number of factors. These include its location and the amenities it comes with. A vacation condo in Florida that's part of a complex with three heated pools, an onsite restaurant, and a state-of-the-art gym might cost more than a timeshare in a community that doesn't include these perks.

Is there value to buying a timeshare?

Absolutely. When you have a timeshare, you're pretty much guaranteed access to lodging when you go on vacation. But unlike a vacation home you own yourself, you're generally not responsible for maintenance on that property.

And speaking of vacation homes, those can be very expensive to purchase. And you may not want the expense of another mortgage loan. Timeshares can be far more affordable, because you're not buying a unit you own yourself. Rather, you're buying the option to use a unit you share with other owners.

Is a timeshare worth the money?

Sometimes -- but not always. In many cases, you can spend less on a hotel room at your destination and use the money you're saving for other purposes, whether it's paying off your credit cards or improving your home.

Plus, financing a timeshare can be expensive. That's because you don't buy a timeshare with a traditional mortgage (since, as mentioned, you're not actually buying a home you own yourself).

Now there are different options you can explore for financing a timeshare. These include home equity and personal loans. But often, these loans will cost more than what you'd pay for a traditional mortgage in terms of interest.

Also, you may be inclined to look at a timeshare as an investment. But it's not an asset that can make you wealthier over time the same way stocks can, for example. And it certainly can't help you gain wealth the same way a regular home purchase can.

Let's say you buy a home for $300,000, and in 10 years, its value increases to $450,000. At that point, you could gain a lot.

But remember, you don't own property when you buy a timeshare. So you can't expect financial upside. Even if you end up reselling your timeshare, you're most likely not going to make money on that sale.

And finally, you may not use your timeshare as often as expected. What if you get tired of visiting Florida year after year? Sure, you could try to swap with someone who owns a different timeshare, but that's not guaranteed to work out. So all told, you might end up paying for something that doesn't benefit you as much as you think it will.

Ultimately, a timeshare could be worth the money, but often, it's not. If your favorite vacation spot has gotten extremely difficult to book, and you're absolutely certain you plan to return at least once a year, then a timeshare could make sense. But before you throw money into one, think about the different things you might do with that cash instead.