Never, never, never, never buy a timeshare direct from the developer.
Whereas the rest of the discussion and advice about timeshares on this site has no basis more reliable than my own meandering experience, of this I am sure… never, never, never buy a timeshare direct from the developer.
There is and can be incredible value in owning a timeshare (more spacious rooms, amenities, costs compared to booking direct, access to resorts around the world, etc.) but that value is erased and forfeited the moment your hard-earned money is handed over to the resort or developer in that initial upfront payment.
It also isn’t necessary.
There are many reasons not to, and ordering them is difficult, so let’s just go through them in logical order:
- The upfront payment given to a developer loses up to 100% of its value the minute you hand it over. The initial payment you make can lose up to 100% of its value the moment it changes hands. Typically, buying a timeshare involves an upfront payment followed by annual maintenance fees. But what exactly does that upfront payment cover? The developer might liken it to a down payment on real estate, suggesting it’s an investment. You might even think it’s contributing to the construction costs of the resort. However, over 90% of that payment often goes towards marketing expenses—the complimentary or discounted trips offered to lure potential buyers. This payment buys you nothing tangible, resulting in negligible resale value. This leads to reason two…
- You can buy the same thing for up to 100% cheaper on the resale market. Why pay more if you can get the same thing just down the street for 95% less? Unfortunately, a lot of people don’t know about the #1 rule, and for various reasons will want or need to get out of their timeshare contract. Because that initial down payment didn’t get them anything, not many people are interested in paying much for it. Which creates the opportunity for you…
- It’s a lot of money. That upfront payment can range from $10,000 to more than $100,000. It’s a lot. It’s a lot to part with, it’s a lot that could be invested elsewhere and making you returns, if you are financing it, it is a lot to be paying interest on. For reasons #1 and #2, it’s a lot of money you are just lighting on fire.
In upcoming guides, we’ll delve into all the benefits of timeshare ownership. We’ll also provide a more detailed financial analysis of timeshare ownership. We genuinely believe in the value of timeshare ownership, and we think you will too. But buying directly from the developer nullifies all that value. So no matter what, no matter how slick or tempting the salesperson might be… never, never, never buy a timeshare on ‘the tour,’ at ‘the owners update,’ or directly from the developer.
