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Should I Invest In a Timeshare Property?

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Should I Invest In a Timeshare Property?

Question: Some friends recently offered me a timeshare. It’s an older place on the beach, and they’ve had it for about 20 years. I’d have to pay a transfer fee of $100, plus a yearly association fee of $500. I know you’re not a big fan of timeshares, but does this deal sound okay?

Dave: In essence, you’re looking at $500 a week. I know the $500 is technically an annual association fee, but you’re basically paying $500 for your week at the timeshare. And in the future, say five years from now, the association fee could increase. You might be paying $1,000 a year at that point — again, for your week.

In actuality, the numbers you’re talking about right now aren’t completely terrible. Still, it’s not a huge blessing. In my mind it’s kind of like, “How would you like a kick in the knee that’s not too hard?”

If it were me, I’d much rather spend my $500 a year on travel and be able to go and stay wherever I wanted. Not only does this free you up it that area, but you’d only spend the money when and if you did it. With a timeshare, you get charged whether you show up or not.

This one’s not as bad as if you’d have to pay $8,000 for the opportunity. But if these were my friends making the offer, I’d have to say no thanks.

Dave Ramsey Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations and The Dave Ramsey Channel on iHeart Radio. Follow Ramsey on Twitter at @DaveRamsey and on the web at www.daveramsey.com.
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