Listen to President Tim Russell and Pastor Drew Gysi explore this topic here.

 

Within the Stewardship Lifestyle Seminar, taught by our ministry division Life Institute, there is a phrase that we often use when talking about estate planning and financial planning. That phrase is…“don’t die with a timeshare.” 

 

What is a Timeshare?

A timeshare is a type of vacation property with a shared ownership model. With a typical timeshare, you share the cost of the property with other buyers, and in return, you receive a guaranteed amount of time at the property each year. In many cases, timeshares are smaller units within a larger resort property (Bankrate).

 

How Do Timeshares Work?

A timeshare allows you to split the costs of homeownership with others based on the timeshare agreement. In some agreements, each buyer owns a fraction of the property (known as “fractional ownership”), depending on how much time they plan to use it. In others, each buyer simply leases the property for a period of time — usually for at least several years — without actually owning it (Bankrate).

 

How Much Does a Timeshare Cost?

The average cost of a timeshare is $22,942 per interval (2022 stat), according to data from the American Resort Development Association. Annual maintenance runs $1,000, on average, but can vary based on the size of the property.

Know that most banks won’t lend money for a timeshare because the properties tend to lose value, and while timeshare property developers might offer financing, it’s usually at a much higher interest rate than a bank, and for a short term (Bankrate).

 

Timeshares are fun! But are they worth it?

“Benefits”

  • Vacation planning is easy! You already know where you are going.
  • You vacation where you love to go.
  • You don’t have to maintain the property (just pay a fee).
  • Lots of options for where to go if you decide to switch it up.
  • May be more affordable than buying a vacation home.
    • In what way? Compared to owning real property, it’s apples and oranges. Deeded property for one week vs deeded property permanently when you own it.

Drawbacks & risks

  • You’re stuck paying for something you may not always be able to afford.
  • Sales people are slick & very good at their jobs.
  • Terms & financing are confusing.
  • Financing will almost always not be from a bank, but from the resort owner or builder, and they increase the interest rate much higher than banks would typically do.
  • Timeshares won’t appreciate in value (like a vacation home would).
  • Very difficult to get rid of.
  • Resale value is very low (if anything at all)
    • High resale value would be around 50% of purchase price. But in reality, it most likely it will be around 20% – 30%. Unfortunately, many people have to give them away because they can’t find a buyer.
    • Resources like Tug2.net and Redweek.com exist to purchase or sell timeshares. Some go here not to sell, but to give it away, losing all of their purchasing dollars.

 

Should I Buy a Timeshare?

  • Can you afford it? (No like, can you really afford it?)
    • Cost to get rid of timeshare – Timeshare exit companies could cost you anywhere from $2,000 to $15,000.
    • Cost to probate the timeshare – Probating a property in California could cost more than probating a property in Pennsylvania. Be mindful of these costs. 
  • Would it make more sense to purchase or rent a vacation home in your desired location year after year?
    • Annually – Annual maintenance fee for a timeshare may run $between $1000 and $1,500, while a Vacation home might only cost $1,000 for a week, depending on where you are going. 
      • If you are looking at a beach rental, in NJ it would be between $900 and $5000 a week.
      • Winner: Renting a house
    • Long term – An owned vacation home at least has resale value, and you have full control over what happens to it. 
      • Winner: Owning a house
  • Long term, what makes sense for you? Do not buy a timeshare.

 

I Already Have a Timeshare…Why Can’t I Die With it?

  • Estate planning is complicated
    • How is the timeshare titled? Most timeshares are a titled property. Just like owning a home, you own a “share” in that timeshare property!
    • Probating property in a different state could be costly.
    • Paying lawyer fees to spend time on your timeshare
  • Resolve/get rid of timeshare while you are able bodied.
  • WestGate Resorts on what happens when you die with a timeshare – “in the case of an owner’s death, a timeshare becomes part of that owner’s estate, and thus, the benefits, investment, and obligations attached to it are passed onto the next-of-kin or the beneficiary of the estate.” How generous!!

 

How could I get rid of my timeshare?

Check out these two articles:

Stewardship Application

DON’T DIE WITH A TIMESHARE

  • Why?  We, as you know, want you to be good stewards of what the Lord has put into your care.  Timeshares are not a good investment, for there is almost always a decrease in value along with increased difficulty to get rid of it.  The cost factor of owning and releasing it has many challenges and almost always a negative financial impact.  
  • Good stewards look for financial investments and increases, not decreases
  • Our advice to all listening is to avoid timeshares if at all possible. Just don’t buy one. If you do have one, consider releasing it sooner than later. Rent or purchase a vacation home instead of getting a timeshare!

 

 

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