Timeshares might seem like a good idea at first, but in reality they are a money sink. Here’s what you need to know about the hidden fees of timeshares.
When you’re at a timeshare meeting, the host will make it sound like you’re entering into a dream contract . Visions will fill your head of days spent at the beach.
Or being able to ski right onto the mountain without having to travel. It’s enticing.
What they won’t tell you at that sales meeting are the downsides to owning a timeshare. Like the hidden fees.
Before you enter into a contract that’s often difficult to get out of, here’s what you need to know about those hidden fees.
The Initial Investment Isn’t Set in Stone
The average timeshare usually sells for $16,000 . While it’s true that over a 20-year period a family of four could easily spend over $25,000 for hotels, that doesn’t mean the price is set in stone.
It doesn’t account for maintenance fees. It also doesn’t take into account the fact that you may not want to visit the same place every year.
If you have a bad year financially, you may not even be able to take your vacation. And if you try to rent it out, you might not be successful at finding a renter.
Also, timeshare sellers spend a lot of money on marketing these spaces to prospective buyers. Between the high marketing costs and the fierce competition, they can spend as much as 55% on a sales meeting.
So they add their costs to the sales price. Since they’re so desperate to make a sale, you have the advantage. So don’t be afraid to negotiate a lower price if you do decide a timeshare is for you.
It’s Not the Investment They Tell You It Is
Timeshares are similar to cars. Once you buy the car and drive it off the lot, it begins to lose its value.
The same is true for a timeshare. Especially if you took out a loan from the timeshare company to purchase it. They will charge you a high-interest rate.
Also, unlike buying a home, if you miss a payment, the timeshare company can foreclose on you.
Even if you rent out your timeshare, you probably won’t make a ton of money on it. In most cases, you’ll be lucky to break even with your yearly maintenance costs.
It will also take time to recoup your money from the initial investment you may.
Don’t forget that even though you are paying money for your timeshare, and you might even have ownership of the deed, you don’t actually own it outright.
It Could End Up Costing Your Kids a Lot of Money
Don’t forget to read the fine print before you sign on the dotted line. There are hidden fees that can cost your kids a lot of money.
That’s because they include the words, “Contract in Perpetuity.” It’s a little like selling your soul to the devil. Once you sign on the dotted line, these timeshare companies can grab a hold of you forever.
A Contract in Perpetuity means you’re stuck with your timeshare for even longer than you’re expected to live. Which means your kids will take over your ownership after you pass.
Whether they want to or not. And they’ll be expected to pay any and all fees associated with the timeshare.
Not a great legacy to leave to your kids unless they too love your timeshare.
There’s Also Maintenance Fees to Pay For
Yearly maintenance fees are expected. Of course, you’ll want to invest in a place that is well maintained.
But there are hidden fees within those maintenance costs. They don’t tell you that maintenance fees can, and usually will, increase.
Some of that depends on where in the world your timeshare is at. Fees can range anywhere from $300 to over $1,000 .
If you choose to stop paying them, the timeshare company can come after you. They can take you to court or foreclose on your timeshare.
Doing this can even affect your credit score .
There Can Be Unexpected Hidden Fees if a Disaster Strikes
Say you purchased your timeshare at Snowbird, Utah. It’s a great place to go skiing. Every year you look forward to traveling there for vacation.
Until the year that the resort gets hit by an avalanche. Suddenly, half the hotel is ruined. That means costly repairs.
Costly repairs that you, as a timeshare holder will be expected to incur.
But hidden fees don’t always have to come in the form of a natural disaster. If the roof needs to be replaced, that too will be charged to the timeshare holders.
Or if the pool needs fixing. Even minor things like a new paint job will be the financial responsibility of the shareholders.
It’s Often Difficult and Expensive to Try to Sell Your Timeshare
If you decide to sell your timeshare, it can end up costing you. The hidden fees here are based on supply and demand.
There are also rules about how you can sell your timeshare . It’s not as easy as you think.
It can be especially difficult if your timeshare is located somewhere like Puerto Rico. Unfortunately, Puerto Rico just got destroyed by a deadly hurricane.
So right now, there isn’t much demand for people wanting to spend time there. Not unless they plan on helping the country rebuild.
Trying to sell your timeshare in an area where the demand is greater than the supply will also affect your ability to sell without taking a huge hit.
Before you buy, make sure that the area in question has had a long history of being a popular vacation site. Then make sure the property is built well.
Even if you do manage to sell it, you won’t even be able to claim it as a capital loss on your taxes.
We Can Help You Cancel Your Timeshare
If your timeshare has turned out to be a nightmare rather than a goldmine, there are steps you can take. You don’t have to be stuck with it forever.
Plenty of people have gotten out of their timeshares without having there saving their life savings drained.
But don’t take our word for it, read our customer’s testimonials and see for yourself.
We’re Consumer Advocates and timeshare experts. We can help you get out of your timeshare.
Don’t wait, contact us today.