If you ask your friends or ask a random group of people if timeshares are a scam, you’re going to get a wide variety of answers.
To help you get clarity, the first thing I’m going to do is answer the question, “Are timeshares a scam?” Then I’ll explain why I give that answer along with what you should know if you’re considering a timeshare.
As an industry, timeshares are NOT scams. They are not Ponzi schemes nor are they “take the money and run” rackets. Timeshares are legitimate vacation properties that are enjoyed by many people in a number of countries.
Does that mean timeshares are for everyone?
To understand whether a timeshare is right for you, you’ll really want to read this article, “Is a Timeshare Ever a Good Idea?”
Why Do People Think Timeshares Are Scams?
In view of this, why do I say that timeshares generally aren’t scams?
This is because not everyone has the same circumstances. Some have the resources to afford the rising maintenance fees for timeshares.
For others with large families, the extra space that a timeshare offers along with clothes washers and dryers, full kitchens, dishes, glasses, and silverware can be a real cost savings.
So why do some people think timeshares are a scam?
The answer lies in the timeshare presentation.
In another post, we breakdown the anatomy of a timeshare presentation in detail.
But the quick answer is that timeshare salespeople try to get you to pay as much as they think you can afford. It’s not like buying a house, even though the salesperson will try to make you think that it’s even easier than buying a house.
When you buy a house, you know how much the seller wants for the property.
Not so with a timeshare. How much you pay can be wildly different from what the people at the table right next to you will pay.
When it comes to maintenance fees, they can go up for any reason, for any amount.
And because a timeshare is not truly a real estate purchase, you won’t be able to get regular financing.
So expect to pay really high interest.
It’s also not easy to get rid of a timeshare.
If you are in a timeshare you need to get out of, these folks can help.
Another reason people think timeshares are scams is because people usually lose money with scams.
Contrary to what the salesperson will tell you, a timeshare is not an investment.
In fact, if you really have your heart set on getting a timeshare, we have an article that walks you through how you can pay as little as $1 or even get the timeshare for FREE!
But back to why a timeshare is not an investment.
If you spent $30,000 with high interest and could only get a dollar for it in the end, some people would call that a scam.
Therefore, in view of all that we have discussed, your viewpoint plays a big part in whether you view timeshares as a scam or not.
What You Should Know If You’re Considering a Timeshare
So what should you know to make sure you don’t, at the very least, pay more than you should with a timeshare?
My recommendations are:
- NEVER, EVER, EVER pay full price for a timeshare!
- Don’t take the first, second, or third offer. Wait for the salesperson’s manager to show up
- Remember, EVERYTHING is negotiable before you sign the contract
- Ask if you can leave a deposit and visit the timeshare before committing
- Don’t purchase a timeshare in an area that isn’t in a popular vacation destination
It’s not enough to just give you bullet points. You need to understand “why” you should follow these steps.
Never, Ever, Ever Pay Full Price
We talked about this earlier.
Because you can get a timeshare for free or even one dollar, it doesn’t make sense to pay full price for a timeshare.
If you really want to get a timeshare, you can use this website and save yourself a lot of money.
Don’t Take the Initial Offers
A timeshare presentation is a classic negotiation dance. Meaning that the first number they give you is always unreasonably high.
The salesperson will act like you’re taking food out of his baby’s mouth (he might even say something to this effect). But that’s a typical sales tactic designed to manipulate you emotionally.
Timeshare presentations are very, very high-pressure sales environments. Who wins depends on who can hold out the longest.
You or the sales team.
So wait for the salesperson to get his manager involved. Then move on to the next step.
Everything Is Negotiable
It’s at this point that you start to take control of the situation.
Even though I’ve stated that timeshares are not inherently scams, it doesn’t mean they don’t use some practices that scammers follow.
For example, one thing phone scammers do is try to keep you talking and keep you on the phone. As long as you give them a window, they have an opportunity to take your money.
The same is true with timeshare salespeople.
If you haven’t definitively shut them down saying you don’t want their timeshare, they’re going to try to get you to sign a contract.
In view of this, use it to YOUR advantage.
The salespeople are going to want to know what’s holding you back. Use this as your opportunity to structure the deal the way you want it.
Let them know you really like the property, but you want more vacation points or days (depending on what type system they use).
They’ll counter. But you keep doing the dance until the final deal looks like something that is comfortable for you.
Leave a Deposit, Visit Later
This is an interesting one.
To explain, let me tell you a quick story.
I was on a timeshare presentation for a property in Las Vegas that we really liked. But we were on the fence as to whether we wanted to commit to the contract.
The property was brand new. Only one of three towers had been completed. So they really needed people to sign up.
The salesman proposed an interesting option:
Leave the required deposit. Within one year come back and stay at the property. If we like it, it would be a free stay. The deposit would go toward the contract.
If we don’t like it, they keep the deposit, and we walk away with a stay on their property with no strings attached.
The deposit was $1,100. For us, it was a no-brainer. That gave us 7-days on the property. That was about the same amount we would have paid to stay at Treasure Island on The Strip for 7-days.
We did come back. But in the end, we decided not to take the timeshare. But we stayed in an amazing 2-bedroom suite right across the street from what is now Planet Hollywood.
What’s my point?
If you think you’d really like the property but are somewhat unsure as to whether you really want to pull the trigger, ask if you can have the deal structured this way.
There’s no commitment on your part. And it gives the timeshare management the high probability that you might sign a contract.
It might work; it might not. But at least give it a try. This way it keeps you in the driver’s seat.
Don’t Purchase Timeshares in Unpopular Vacation Destinations
The value of a timeshare is more than just the financial costs.
There’s also the value of location, location, location. And when it comes to timeshares, location is more important than price.
This is because most timeshares are points-based. Points-based timeshares mean that you can stay at any timeshare in the network as long as you have enough points on your account.
If you decide you want a timeshare in a town or area that doesn’t get a lot of visitors, it won’t be a place others will want to exchange points to vacation at.
On the other hand, if you got a timeshare in Hawaii or Las Vegas, there are so many people that want to stay there that you’ll have no problems exchanging with them.
We’ve written another post that explains how points works.
But the key to remember is that if you want to get the most out of your timeshare, choose one that is in a popular vacation destination.
Then you can trade your points to stay at just about any property you want. You can even trade those points to take a cruise.
Before I forget, there’s one final thing I must tell you.
You absolutely do NOT have to purchase a timeshare to stay at one.
You would pay for it the same way you would if you went to a theme park resort or a hotel. Pay once, enjoy your stay, and no bills following you home.
You Are the Final Judge
As you can see, timeshares are not scams in the traditional sense. However, they do use some scammy tactics. But the arrangement itself is not a scam.
Is it something that you want to be a part of?
That depends on your viewpoint.
If you think a timeshare could work in your situation, I wanted to make sure you have the knowledge to get the best deal possible.
Timeshare salespeople thrive off putting people under pressure to take their offer. But if you know what to expect and what you’re getting into, you can jump into the driver’s seat.
If you’ve made it this far, thank you. I hope you found this helpful.
If you did, please share this on your favorite social media platforms so that others can take control of their vacation options.