How To Decide If It's Better To Rent Or Buy A Timeshare
You're liking the idea of spending time in a timeshare during your vacation, but you're wondering if it would be better for you to own one or buy a right to use (lease or license) a timeshare.
If you're thinking of buying a timeshare, you'll join the nearly 10 million households who own a share or interest in the 203,810 units in 1,549 resorts in the U.S., according to the American Resort Development Association (ARDA). Meanwhile, if you're planning to stick with renting a timeshare, you'll join the 14% of renters who occupy the vacation property.
As with other purchase decisions, the answer depends on you and your specific needs and situation. In the end, the path you choose to take should match your lifestyle and financial capability. For instance, if you become a timeshare owner, you could either be part of the 89% who are happy with their purchase (per ARDA) or part of the 85% who regretted their decision (per USA Today) — obviously opinions (and surveys) vary. Here's why you might want to buy or rent a timeshare and the factors you'll need to consider before making any decisions.
Why buy a timeshare?
Buying a timeshare is not very different from purchasing a house or other real estate property. However, unlike real estate, timeshares are not considered investments as they don't appreciate in value and don't generate income, according to Investopedia. Rather, they are more of a lifestyle purchase, according to Forbes, or put another way, it's prepaying for your vacation. This is something you'll have to bear in mind.
"Timeshare should not be considered an investment, deeded or not," Lisa Ann Schreier, consumer advocate who once worked in the timeshare industry, told Forbes, adding, "There are some rare cases where the value of the timeshare is the same or even more than the purchase price. ... That has to do more with supply and demand than anything else."
With that out of the way, acquiring a timeshare can make sense for you and your family, especially if you make use of it every year, according to timeshare rental platform Koala. For one, annual vacations will have less hassle as you'll have a sure place to stay once you reach your destination. Plus, these properties are managed and maintained professionally, so you don't have to worry about upkeep, although you'll have to pay annual fees to keep it that way. In addition, most timeshares are spacious and include amenities such as multiple bedrooms, a kitchen, hot tubs, pools, spas, gyms, golf courses, and beach access.
Why rent a timeshare?
There are a couple of reasons why you'd want to rent a timeshare instead of buying one. First, if you're still undecided about your purchase, renting a timeshare will allow you to try the vacation property without getting tied to a lifetime agreement. Second, if you don't want to buy a timeshare but still want to reap the benefits of staying in one.
The Points Guy describes this as getting the resort experience without the high price tag associated with such vacation properties. The publication continues that timeshare rentals that owners advertise can often give you up to a 70% discount, for instance, EVR units that sell at SkyAuction at an extremely low price in destinations including Orlando, Las Vegas, and Cancun. Just don't forget to read the fine print on eye-popping deals as you'll also need to pay service and SkyAuction fees. Koala adds that timeshare rentals are a great way to book premier resorts worldwide.
You can typically book a timeshare rental for at least one week or seven days. Timeshare exit company Timeshatter recommends a budget of $1,000 for your whole-week stay, as timeshare rentals can cost you between $114 and $149 per night, although some units go for $4,500.
To buy or rent? Factors to take into consideration
When deciding whether you'll buy or rent a timeshare, think about your travel patterns, advises Forbes. Do you travel regularly to the same vacation spot each year or will purchasing a timeshare fit your lifestyle? Getting your own timeshare will be good for frequent travelers and those who want to stay in a spacious accommodation with lots of amenities, says Elliott Report. If you don't fit this description, owning a timeshare might not be for you.
In addition, there's also the matter of financial capacity. The Federal Trade Commission (FTC) recommends determining the true cost of owning a timeshare before buying one. Can you afford the cost of acquiring a timeshare now (upfront or initial fee) and in the long run (maintenance and other annual fees)? Run the numbers before making any decisions, and don't push through any purchase if you have to borrow funds, warns Forbes.
When it comes to timeshare rentals, The Points Guy recommends that people who are looking for five-star treatment should look elsewhere. The publication adds that if you're used to getting refunds when booking hotels, for instance, stay away from timeshare rentals as rates are nonrefundable. However, if you're a last-minute traveler who's willing to go beyond the tourist hotspots or travel during the off-season, then a timeshare rental might just be up your alley.