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How Timeshares Work


Selling a Timeshare: Resale Value

Timeshare resale can be a sticky subject, because many resorts tout timeshares as sound financial investments. They will often encourage potential share owners by talking about the "hot" timeshare market in the area and give a few anecdotal examples of people who sold their timeshares for more than they initially paid for them.

Unfortunately, timeshare owners rarely make money when they resell their share. Virtually every objective review of timeshares cautions interested owners against buying a timeshare as an investment. The Federal Trade Commission Web site states, "You should know that the value of is in their use as vacation destinations, not as investments." Florida has even considered passing a law that would make it illegal to mention the phrase "investment opportunity" in a timeshare sales pitch.

Why do timeshares lose their value? Even if you're only looking at initial purchase price, the market is flooded with thousands of resorts and millions of shares. It isn't a seller's market. Once you take into account total costs, including annual fees and the fees that timeshare brokers charge to facilitate the resale, it becomes very difficult to recoup the initial purchase price, much less make any money on the deal.

That isn't to say that timeshares are a bad idea -- as vacation destinations, they can be the perfect plan for people with certain vacationing patterns. They just aren't a good way to make money.