Timeshare Investments: A Detailed Cost-Benefit Guide




Understanding Timeshare Investments: Costs and Benefits Explained

When looking into a timeshare cost benefit analysis, it’s crucial to understand the basics and upfront costs. A timeshare is a shared piece of vacation real estate, allowing multiple owners to use the same property for set periods. Typically, timeshare owners get one week per year in a property. This shared ownership can range from condos to full homes, offering an affordable alternative to buying a vacation home.

Here’s a quick breakdown you need to consider for timeshare cost benefit analysis:

  • Initial Purchase Price: Costs can vary, but a common example is $24,500. Of course they are FREE at Free Vacation Ownership.
  • Financing Costs: If financed over 10 years at 17.9% interest, expect total payments around $48,427.20.
  • Annual Maintenance Fees: Starting at $1,100, usually increasing by 5% annually.
  • Additional Costs: Special assessments, incidental fees, and annual dues for property upkeep.
  • Vacation Home Purchase: You’re looking at at least $300,000, plus interest, property taxes, upkeep, utilities, etc. You can get a FREE timeshare from Free Vacation Ownership for a fraction of the cost.

I’m Timothy West, a seasoned expert in the timeshare market. With experience in using and optimizing timeshare benefits, my aim is to give you a clear picture of the costs and benefits associated with timeshares. Follow along as we dive deeper into this topic.

Timeshare Cost Overview - timeshare cost benefit analysis infographic process-5-steps-informal

What is a Timeshare?

A timeshare is a shared ownership model of vacation real estate. Multiple buyers own or lease usage rights to the property, typically in one-week increments. This allows multiple families to enjoy the same property without the financial burden of full ownership.

Types of Timeshares

There are two main types of timeshares: deeded and non-deeded (also known as right-to-use).

  • Deeded Timeshares: With a deeded timeshare, you own a portion of the property. For example, if you purchase one week, you own 1/52nd of the unit. This type of ownership is permanent and can be sold, willed, or transferred.

  • Non-Deeded Timeshares: Also known as right-to-use timeshares, these give you the right to use the property for a specific number of years, but you don’t own part of the property. The developer retains ownership, and your usage rights expire at the end of the lease term.

Timeshare Usage Models

Timeshares offer various models to suit different vacation needs:

  • Fixed Week: This model gives you the right to use the property during the same week each year. It’s predictable and allows for routine vacation planning.

  • Floating Week: Offers more flexibility by allowing you to choose any week within a specified period. However, you need to book early to secure your preferred time, especially during peak seasons.

  • Points System: Known as “vacation clubs,” this model uses points that you can redeem at various properties. Points can be saved (“banked”) for future use, offering maximum flexibility.

  • Fractional Contracts: These provide longer usage periods, such as several weeks or months each year. They are similar to deeded timeshares but offer more time at the property.

Fractional Ownership

Fractional ownership is a form of shared ownership. Each owner holds a part of the asset and shares the benefits and responsibilities. For example, owning a week of a timeshare condo means you own 1/52nd of that unit. This model is common in vacation homes, luxury cars, and aircraft.

Usage Rights and Vacation Intervals

When you buy a timeshare, you gain usage rights, meaning you have exclusive access to the property for a specific period each year. This period is typically one week, but it can vary depending on the type of timeshare and the ownership model.

Property Types

Timeshares are available in various property types, including:

  • Condos: The most common type, offering spacious accommodations.
  • Single-Family Homes: Provide a more private vacation experience.
  • Luxury Campsites: For those who enjoy outdoor adventures.
  • Lodges and Yurts: Unique options for a different vacation experience.

Understanding the different types of timeshares and usage models can help you decide which option best fits your vacation needs. Next, let’s dive into the initial costs of timeshare ownership.

Initial Costs of Timeshare Ownership

When you buy a timeshare, the initial costs can be significant. Let’s break down these costs so you know exactly what to expect. That is why we provide free timeshares at Free Vacation Ownership. No Presentations. No Sales Pitch. No Gimmicks.

Financing a Timeshare

Many buyers choose to finance their timeshare. This means you don’t pay the full amount upfront but instead make monthly payments. By getting yours for FREE from us, you avoid all this additional cost.

Interest Rates: Financing a timeshare usually comes with high interest rates, often up to 17.9%. These rates are much higher than typical home loans.

Monthly Payments: If you finance a $24,500 timeshare over 10 years at 17.9% interest, your monthly payments will be around $403.56. Over 10 years, you’ll end up paying $48,427.20 in total. This adds nearly $24,000 in interest to the original price.

Loan Terms: Timeshare loans are typically shorter than home loans, often around 10 years. Always read the fine print to understand your commitment.

Upfront Costs Breakdown

Paying for a timeshare involves more than just the purchase price. Here’s what you need to know:

Purchase Price: The upfront cost to buy a timeshare can vary. For our example, let’s use $24,500. This price can change based on the location, size, and brand of the timeshare. Remember it is totally FREE here at Free Vacation Ownership.

Developer Financing: Many buyers opt for financing directly through the developer. While convenient, it usually comes with high interest rates. Other options like personal loans or home equity loans might offer better interest rates but require good credit.

Average Purchase Price: Timeshare prices can range widely. For instance, a timeshare in Hawaii might cost more than one in Branson, Missouri. Always compare prices based on location and amenities.

Location-Based Pricing: The cost of a timeshare heavily depends on its location. Popular destinations like Disney resorts or Myrtle Beach generally have higher prices compared to less sought-after places.

Understanding these initial costs is crucial for making an informed decision about buying a timeshare. Next, we’ll explore the ongoing costs you need to consider.

Ongoing Costs of Timeshare Ownership

After the initial purchase, timeshare owners face several ongoing costs. These include annual maintenance fees, special assessments, and incidental costs. Understanding these expenses is vital for a comprehensive timeshare cost benefit analysis.

Annual Maintenance Fees

Maintenance Fees are yearly charges that cover the regular upkeep and maintenance of the property. These fees ensure that the resort remains in good condition and can include:

  • Upkeep: General maintenance tasks to keep the property in good shape.
  • Landscaping: Yard work and garden maintenance.
  • Cleaning: Regular cleaning services for common areas and units.
  • Repairs: Fixing any damages or wear and tear.
  • Security: Ensuring the property is safe and secure for all guests.

According to the American Resort Development Association (ARDA), these fees averaged about $1,000 per year in 2018 and have been increasing by 5% annually. This means that over time, the cost of maintenance fees can add up significantly.

Special Assessments

Special Assessments are additional charges that timeshare owners may face to cover unexpected costs not included in the standard maintenance fees. These could be for major repairs or improvements, such as:

  • New Roof: Replacing the roof of the building.
  • Sewage Line: Fixing or replacing the sewage system.
  • Natural Disasters: Repairing damage from events like hurricanes or floods.

For this analysis, we assume an average assessment of $1,000 every 6 years. Over 20 years, this amounts to an additional $3,333.33.

Incidental Costs

Incidental Costs are extra expenses that can often be overlooked. These can vary depending on the resort and how often you use your timeshare. Common incidental costs include:

  • Laundry Services: Fees for using on-site laundry facilities.
  • Parking Fees: Charges for parking your vehicle at the resort.
  • Resort Fees: Additional fees for using resort amenities like the gym or pool.
  • Additional Services: Any other extra services provided by the resort, such as room service or spa treatments.

For this analysis, we assume an average annual incidental cost of $500. Over 20 years, this would add up to $10,000 to the total cost of ownership.

These ongoing costs are crucial to consider in any timeshare cost benefit analysis. They highlight the importance of not just focusing on the initial purchase price but also factoring in the long-term financial commitments. Next, we’ll look at how these costs add up over time and compare them to other vacation options.

Timeshare Cost Benefit Analysis

Total Cost Over Time

When you buy a timeshare, the initial investment is just the beginning. Let’s break down the total cost over time to give you a clear picture.

Initial Investment: The average upfront cost of a timeshare can be around $24,500. If you finance this amount over 10 years at an interest rate of 17.9%, your total repayment would be approximately $48,427.20. This includes $23,927.20 in interest alone.

Annual Maintenance Fees: These fees start at about $1,100 per year and typically increase by 5% annually. Over 20 years, using the geometric growth formula, you’d pay around $44,484 in maintenance fees.

Incidental Costs: Assuming $500 annually, incidental costs would add up to $10,000 over 20 years.

Special Assessments: These can be unpredictable but are essential to consider. Let’s estimate an average of $500 every five years, adding up to $2,000 over 20 years.

Cumulative Expenses: Adding these up, the total cost of owning a timeshare over 20 years could be around $104,911.20.

Comparing to Other Vacation Options

To understand if a timeshare is worth it, let’s compare these costs to other vacation options like vacation homes, hotel stays, and rental properties.

Vacation Home:
Initial Cost: Buying a vacation home can be quite expensive. In popular destinations, prices can easily exceed $300,000.
Ongoing Costs: Property taxes, insurance, and maintenance can add up to $10,000 annually.
Flexibility: You have full control but also full responsibility for upkeep and booking rentals if you’re not using it.

Hotel Stays:
Cost: Let’s assume a yearly vacation budget of $3,000 for hotel stays. Over 20 years, that’s $60,000.
Flexibility: You can choose different locations each year without any long-term commitment.
Amenities: Most hotels offer amenities like pools, gyms, and housekeeping, but you might miss out on the home-like comfort of a timeshare.

Rental Properties:
Cost: Renting a vacation property can vary widely. Let’s estimate an average of $2,500 per year. Over 20 years, that’s $50,000.
Flexibility: You have the freedom to choose different properties each year.
Amenities: Rentals often come with kitchens and more space, similar to timeshares, but without the long-term financial commitment.

By comparing these options, you can see that the total cost over time for a timeshare can be higher than simply renting vacation properties or staying in hotels. However, timeshares offer the benefit of guaranteed vacation spots and resort amenities, which might be worth the cost for some families.

Up next, we’ll dive into the pros and cons of timeshare ownership to help you weigh all the factors.

Pros and Cons of Timeshare Ownership

Advantages of Timeshares

Owning a timeshare comes with several benefits that can make your vacations more enjoyable and stress-free.

1. Resort Amenities:
Most timeshares are located in resorts that offer a variety of amenities. Think pools, gyms, restaurants, and even golf courses. These amenities can make your vacation feel more luxurious compared to a standard hotel stay.

2. Guaranteed Vacation Spot:
If you love vacationing in the same place every year, a timeshare guarantees you a spot. No more worrying about booking a hotel room months in advance. You always have your vacation home waiting for you.

3. Lower Upfront Cost:
Compared to buying a vacation home, timeshares are generally more affordable upfront. You only pay for the fraction of the property you use, which can be a more budget-friendly option.

Disadvantages of Timeshares

Despite the benefits, there are also some drawbacks to consider when thinking about timeshare ownership.

1. Limited Resale Value:
Timeshares often have a low resale value. The market is crowded, and many owners struggle to sell their timeshares without taking a loss. This can be a significant downside if you ever need to get out of your investment.

2. Annual Fee Increases:
Maintenance fees are a recurring cost that can increase over time. These fees cover the upkeep of the property, but they can increase over time, but not by very much.

3. Difficulty in Selling:
Selling a timeshare can be challenging. The main reason is the selling price. Since many people paid a considerable amount for their timeshare, they want to get their money back, which means selling at a higher price. If you decide to sell yours at any point, you got it for free from us, so you’re guaranteed a profit.

By weighing these pros and cons, you can better understand whether timeshare ownership aligns with your vacation needs and financial situation.

Frequently Asked Questions about Timeshare Costs

What are the costs of owning a timeshare?

Average Purchase Price:
The initial cost of a timeshare can vary widely. On average, the purchase price ranges from several thousand to tens of thousands of dollars. For example, a timeshare might cost around $24,500 initially. This cost can be higher or lower depending on the location, the size of the unit, and the time of year you purchase.

Maintenance Fees:
Annual maintenance fees cover the upkeep of the property, including landscaping, cleaning, repairs, and security. These fees can start at around $1,000 per year and increase slightly over time.

Financing Charges:
If you choose to finance your timeshare purchase, be aware of the high-interest rates, which can reach up to 20%. Financing a $24,500 timeshare could result in total payments of around $48,427.20 over the life of the loan.

Are timeshares ever a good investment?

Resale Value:
Timeshares generally do not appreciate in value, so they aren’t considered a good investment from a resell perspective. However, when you get a timeshare for free, you don’t have to worry about resell value, because whatever you sell it for will be a profit.

Income Generation:
While some owners rent out their timeshares to offset costs, this is not a guaranteed income stream. The ability to rent out your timeshare depends on demand and the terms of your contract.

Financial Accessibility:
Timeshares are more accessible than purchasing a vacation home outright, making them an attractive option for those who want a vacation property without the high upfront cost. However, the long-term financial commitment, including ongoing fees and potential special assessments, should be carefully considered.

How much do timeshares depreciate?

Resale Market:
The resale market for timeshares is challenging. Many timeshares are sold for much less than their original purchase price. This depreciation is a significant factor to consider if you plan to sell your timeshare in the future.

Value Decline:
Timeshares typically lose value over time. Unlike traditional real estate, they do not build equity. This is why people don’t buy them as investments, but as guaranteed vacation spots with luxury amenities.

There are some exceptions where timeshares in highly desirable locations or with flexible usage options may hold their value better. However, these cases are rare and should not be relied upon as a general rule.

By understanding these costs and the potential for depreciation, you can make a more informed decision about whether a timeshare is the right choice for you.



Timeshare ownership comes with both benefits and drawbacks. While it offers a guaranteed vacation spot and luxurious amenities, there are ongoing factors to consider. A timeshare over 20 years can run around $100,000, but that includes the initial purchase price, which can make up around half of that number. When you get a timeshare for free, it is considerably less. And it is MUCH cheaper than buying a vacation home with comparable amenities.

Long-Term Financial Viewpoint:

From a financial perspective, timeshares should not be seen as investments. Again it does not rise in value like traditional real estate, but it does provide a luxury location for consistent vacations and works well for many families.

Free Vacation Ownership:

At Free Vacation Ownership, we believe in providing clear information to help you make an informed decision. Our timeshare options offer a way to enjoy consistent, high-quality vacations, with no upfront cost.

Perpetual Obligations:

One of the most significant aspects of timeshare ownership is the ongoing financial responsibility. Maintenance fees must be paid as long as you own the timeshare. While they are minimal, they can increase slightly over the course of time.

Decision-Making Factors:

When deciding if a timeshare is right for you, consider:

  • Your Vacation Habits: How often do you plan to use the timeshare?
  • Financial Situation: Can you afford the upfront and ongoing costs?
  • Flexibility: Do you prefer the flexibility of different vacation spots each year?

In summary, timeshares offer a mix of affordable vacation options and luxurious amenities but come with responsibilities. We recommend thorough research and careful consideration before making a decision. If you decide to move forward, you could enjoy a lifetime of memorable vacations with Free Vacation Ownership.

For more information on our timeshare options, visit Free Vacation Ownership.

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