Do the Math: Timeshare Condos aren’t a Good Investment
Timeshare condos may look like an attractive way to enjoy a week on the beach somewhere without the commitment of buying another property. The cost of a timeshare is only a fraction of what your mortgage payments would be on buying a property outright, and you can enjoy your time hassle-free every year. What looks like an attractive investment isn’t, though. Timeshares are a poor investment, and if you’re considering a timeshare, you’ll probably benefit more from another type of real estate investment.
Cons of Timeshare Condos
The biggest downside of a timeshare condo is that it’s administered to make money for the company who owns it. That means you’re paying the company’s profits with your timeshare fee, when you could be paying yourself if you purchased a property outright. If you pay $7,000 for a week in a timeshare, the entire year’s worth of timeshare use comes to $350,000. You may find that you could buy a condo outright in the area for $150,000, making the timeshare massively overpriced compared to other real estate in the area. $7,000 might pay for two months in a normally-priced condo – or more.
The other con of timeshare condos is how difficult they are to sell. When you buy a property, you should think about your selling strategy. When and how will you sell? Timeshare condos are virtually impossible to sell, which means you could be stuck with that $7,000 for one week in a condo for the rest of your life.
Alternatives to Timeshares
There are two alternatives to timeshares that provide great benefits and options: buying a property outright, or renting a week somewhere. Buying a property outright enables you to build equity and enjoy all of the positives of investing in real estate. Renting a property for a week lets you move around and experience different resorts and vacation destinations, and if you find a spot you like, you can probably work out a deal with the landlord for long-term rental rights but without the commitment of a timeshare.
