On the heels of discussing What is My Timeshare Worth, comes a deeper question: My Timeshare Asset or Liability?
Early in your education about timeshares you were told that your timeshare was a great investment and would grow in value over the years. You could sell your timeshare at a profit. You could reliably rent out your timeshare for a great profit! Owning a timeshare gave you great tax advantages. Maintenance fees would not go up. Using a timeshare would be easy to schedule and would be available at a moment’s notice any place you’d like to go.
Sounds familiar? I hope not, but probably so. Timeshare sales people exaggerated, lied, and did everything they could with charts, numbers, and booze to convince you that a timeshare purchase was a smart thing to do. They made a brilliant presentation that would make you seem foolish not to buy right then and there.
But how did that work out in real life? Is a timeshare an asset like they said at the resort? Or is it a liability – obligation with no end in sight?
What is a Liability? A financial debt or obligation that you are responsible for. Relieved by a payment of goods, services, or cash. A liability could arise from actions in the past, obligations for the present, or commitments for the future.
What is an Asset? – An asset is a resource with economic value that an individual owns or controls with the expectation that it will provide future benefit or value.
Will your timeshare grow in value?
No. Not ever. Not possible. 50% of the sales price you paid for your timeshare went into the marketing it took to get you to buy it. That is an average but it is a very consistent one. That is also the number one reason the resort will not buy back your timeshare. That would be a total losing deal for them. Often they won’t even take it back for nothing! You can’t even give it back to them. They want you to pay the maintenance fee like their personally subsidized annuity for the rest of your life.
This also accounts for the low resale value of your timeshare. There are thousands upon thousands of timeshare owners who would be glad to just sign over their timeshare to anyone. All they want to do is to get away from the annual maintenance fees and special assessments.
Maintenance fees will continue to go up every year, sometimes at incredible rates. Your timeshare contract or declaration will say there is a cap on the amount it can increase annually. Yet, the fees still quickly double or worse.
Plus, the obligation to pay the maintenance fee is for life. It will never go away. That intensifies the bad feelings of those who think they are stuck in a really bad deal.
My conclusion? A timeshare is a liability. I have no guarantee of being able to take vacations for the next 20 years. I do have the obligation of paying for it for 20 years and beyond.
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Experience: We have sold and closed timeshares in over 29 countries, in 47 states in the USA, have closed deals with sellers and buyers from over 89 countries. We have helped thousands of owners get out of an their unwanted unit. We have a program that gets you out of your property without waiting for a buyer too. This stops the fee payment burden right away.
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Our offices are at 14500 Hwy 105, Conroe, Texas 77304.