Sep 30, 2014
Do only fools buy timeshares? Not really. In my opinion, timeshares are great especially if you purchase a resale. I have personally purchased the first one from the developer, and the other three I purchased directly from other owners, thus, realizing substantial discounts. It is also important to note that not all timeshare management companies are equal and it is vital to purchase a high-end brand such as Marriott, Starwood, etc. in order to get the best experience.
Why are timeshares great? Since most timeshare properties offer luxurious and spacious accommodations, owners would love to stay there at a fraction of a standard hotel room cost. For example, Marriott would charge you approximately $800 per night for a 2-bedroom unit in Aruba but if you own it, you can stay there for about $1500 in annual maintenance cost (as of this writing) + amortized cost of ownership. If you have purchased a garden view resale unit for $6000, the amortized cost over 20 years comes to only $300 additional per year. So, you have a whole week in a 2 bedroom luxury unit for only $1800 comparing to $5600 you would have paid for the same unit in a hotel.
Additionally, staying in a unit with full amenities is like being at home away from home, which is extremely comfortable for families & large parties, and helps guests to save significant amount of money on eating out. Many owners would do a grocery shopping and have a breakfast and lunch in the unit and will only go out for dinner. This, again, results in huge money savings.
A potential disadvantage of owning a timeshare is that timeshare owners cannot easily sell their properties or cannot always occupy them. However, they are still responsible for the annual carrying costs (such as maintenance fees). Gladly, there is a way to recoup their ongoing property maintenance fees and perhaps make a profit if possible: rent your unit when you cannot use it. The first rule of real estate “location, location, location!” applies to timeshares as well. It is the location of your timeshare property that will determine the rental demand, how fast it can be rented, whether your will recoup your maintenance fees, or how much of a profit you are going to make.