For many people, a timeshare isn’t worth the money. They may have bought one after hearing a persuasive sales pitch in an overcrowded room at a resort and feeling “guilted” into buying, but as it turns out, the timeshare isn’t worth the investment because it depreciates in value and comes with hefty annual maintenance fees.
Timeshare companies jack up the price of the product to compensate for expensive presentation costs and resort management fees, so it’s no surprise that they don’t appreciate in value as you hold on to it over the years. When you go to sell, you’re unlikely to get back anywhere near what you paid for it — and that doesn’t even account for the fact that your annual maintenance fees are continually rising.
What’s more, unlike real estate, your timeshare will not appreciate in value if you sell it – it’ll only depreciate in value over the course of your ownership. That’s why it’s important to evaluate a timeshare as you would any major outlay, and don’t make a snap decision after hearing a persuasive sales pitch. Read the contract carefully, get answers to any questions that arise and crunch the numbers.
If you decide a timeshare isn’t for you, don’t just walk away, especially if you’re past your contract’s cooling-off period – that can leave negative marks on your credit report and could get you into legal trouble. Instead, do what Laurie Deitz did: donate the timeshare to a nonprofit charity that accepts them. “You can give it to a good cause and still get a tax deduction,” she says.
When you donate your timeshare, however, you’re not necessarily freeing yourself of your payment obligation – depending on how much the timeshare is valued at, the charity may have to pay taxes and transfer fees to acquire it. Additionally, you might still be responsible for any mortgage the previous owner owed on the property and any annual maintenance fees.
While it’s not a perfect solution, it’s certainly better than continuing to pay ever-increasing fees on a product that isn’t worth the money you paid for it. But before you decide to donate your timeshare, contact the resort developer to see if they will buy it from you. If they don’t, there are a few other ways to get rid of it: