Young woman arriving at a tropical resort for her vacation


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For all their glossy brochures featuring tropical vistas and happy-go-lucky couples, the timeshare industry is best known for its predatory practices. Their employees will lock you in a conference room and then descend like vultures, picking away for hours until they get to your pocketbook. According to a 2016 court case, the world’s largest timeshare company, Wyndham Vacation Ownership, encouraged employees to adopt a strategy called “Tell Them Any F------ Thing” to sell properties. Timeshares have such a bad rap that some companies have even rebranded them as "Vacation Clubs" and "Travel Clubs." But if these getaways are so bad, why do nearly 10 million Americans own at least one timeshare? Without getting bogged down in the boring details, we figured out how timeshares work and if they’re really a scam.

How Do Timeshares Work?

When you buy a timeshare, you purchase the right to stay at a condominium, apartment, resort, or campground for a fixed period of time. Oftentimes, this type of “fractional ownership” means that you have exclusive rights to a vacation home for a week a year, with other owners leasing the property for the remaining 51 weeks.

Typically timeshares use four types of systems to determine when you can use the property:

  • Fixed Week: You gain access to the property for the same week every year.
  • Floating Week: You have more flexible access to the property throughout the year or during a defined period.
  • Fractional: You have a greater stake in the property and can stay for longer periods of time, from a few weeks to months.
  • Points: Your timeshare is worth a certain number of points, which you can use to access other properties within the timeshare network. More desirable locations are worth more points.

How Much Do Timeshares Cost?

Although timeshares can vary dramatically in price, the average for a weekly timeshare interval is $24,140, according to the American Resort Development Association (ARDA). Most timeshares also tack on an initial fee for the timeshare agreement on top of annual fees for taxes, maintenance, and utilities, which can amount to an extra $1,000 a year. Oh, and annual maintenance fees usually go up every year, too.

And for all that cash, you might not even own the property, as there are two types of timeshare ownership:

  • Non-deeded: You have a “right to use” the property for a fixed number of years but don’t actually own it.

  • Deeded: You own a percentage of the property.

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Woman with pink suitcase and passport with boarding pass standing on passengers ladder of airplane opposite sea with palm trees. Tourism conceptPhoto credit: FTiare/istockphoto

Can You Get Out of a Timeshare?

If you still aren’t convinced that timeshares are a rotten deal, then consider how difficult it is to get rid of one.

If you can sell your timeshare — and that's a big if, considering some contracts include "perpetuity clauses" —  you might have to pay even more maintenance fees.

The market is also oversaturated with sellers trying to get out of paying their maintenance fees, so there are countless listings priced at $0 — yet another reason why timeshares are terrible investments.

And then there are the scammers. Because timeshare contracts can be complicated, some shady timeshare exit companies ask you to pay hundreds to thousands of dollars to sell your property, only to never find a buyer.

If you do need to sell your timeshare, you have a few more legitimate options:

  • Use the Rescission Period: Rescission laws allow new owners to cancel their timeshares. Although rescission periods are typically short, they’ll depend on your state’s laws.

  • Sell Your Timeshare: If you sell your timeshare, don’t expect to earn your money back. Timeshares only depreciate, and the market is oversaturated with cheap listings. To determine how much your timeshare is worth, use an appraisal service. 

  • Gift Your Timeshare: Assuming the timeshare is paid off, you can pass it along to a family member or friend. Just be transparent about the fees they’ll have to pay.

  • Stop Paying Timeshare Payments and Fees: As a last resort, you can completely stop paying for your timeshare, though your credit will take a hit and your property could go into foreclosure.

Are Timeshares a Scam?

While not all timeshares are scams, the entire process — from the hard sell to getting rid of the property — is full of financial pitfalls, including surprise fees, complicated contracts, and never-ending maintenance costs. You’re also buying a depreciating asset that, unlike a traditional condo or home, is nigh impossible to sell. Our advice? Avoid the timeshare vultures and plan a conventional vacation.

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