Originally published at: Why you should NEVER buy a timeshare – Personal Finance Club
The original idea behind timeshares was cool. You want to own a vacation home. But naturally, you’ll only spend part of the year there. So why not go in with a few other families. Everyone pays 1/8th (for example) of the cost of the home, split up the weeks of the year and boom, you’ve got a vacation home for 1/8th of the cost.
But that’s not how things work these days. Modern timeshare companies have basically become hotel subscription services. They make a compelling (and hardball) sales pitch and tempt you with fantasies of exotic vacations and real estate ownership. But at the end of the day, you’re basically signing a contract obligating you to spend money with this specific company every year no matter what your plans end up being. Can’t go on a vacation that year? Too bad, pay up. Want to go to a location where they’re booked up or don’t have a property? Too bad, pay up. I was recently talking to my friend Allison (@inspiredbudget) and she shared that she bought a timeshare on her honeymoon. It turns out their plans changed a bit and they never used it once.
If you didn’t know, it’s basically impossible resell a modern timeshare. No one wants them. In fact, there’s an entire industry that has built up to get you out of timeshare contracts. You pay THEM even MORE money just so you can stop paying for your timeshare.
You know what IS flexible? Cash. Save the money. Don’t give it to a timeshare company. When it’s time to go on vacation, price shop different hotels and airbnbs wherever you want to go. It’s cheaper, more flexible, and you’ll probably end up in some cooler accomodations and on a more interesting adventure than some stuffy timeshare.
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Jeremy
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