For those who enjoy frequent travel, the idea of a timeshare may sound appealing–guaranteed access to desirable destinations, premium accommodations, and a sense of consistency year after year. But are they truly worth the commitment–financially and otherwise? In this article, we take a closer look at the real costs and benefits of ownership versus renting, based on firsthand research. Whether you’re considering a timeshare for convenience, legacy, or long-term value, this guide can help you decide what’s right for your family.

What Is a Timeshare? Understanding the Basics

A timeshare is a vacation property shared among multiple owners, giving each owner the right to use the property for a specific period. Understanding how a timeshare works is essential before committing: It’s not a traditional real estate investment but rather access to a property through deeded weeks or points-based programs. Timeshares can offer predictable vacations but come with long-term financial and logistical considerations.

How Do Timeshares Work? Deeded Weeks vs. Points-Based Programs 

How timeshares work depends on the type of ownership:

Deeded Weeks

With a deeded week, you own the rights to a specific unit for a fixed week each year. This gives you predictability: you always know exactly when and where your vacation will take place. You can often pass this ownership to heirs, making it a form of property asset. However, the tradeoffs include:

• Limited Flexibility: Your vacation dates and location are locked in, which can be challenging if your schedule changes.
• Resale Difficulty: Selling a deeded week can be complicated, and resale prices are often far below the original purchase price.
• Ongoing Costs: Even if you don’t use your week, you’re responsible for annual maintenance fees.

Points-Based Programs

Points-based timeshares provide more flexibility. Instead of owning a specific week, you purchase a set number of points that can be redeemed across multiple resorts, seasons, or unit types. The benefits include:

• Flexible Scheduling: You can choose different times of year or swap locations within the network.
• Accommodation Variety: Redeem points for different unit sizes or upgraded properties.
• Point Rollover Options: Many programs allow you to roll unused points into future years, enabling longer or larger vacations.

Timeshare Financial Consideration

Regardless of the type, timeshare ownership involves recurring costs. Annual maintenance fees can increase over time, typically 3–5% per year, and can continue even if you don’t use the property. Understanding how these costs accumulate is essential to evaluating whether a timeshare is a good investment for your family.

In Short: Knowing how timeshares work helps you weigh convenience, flexibility, and financial commitment before purchasing, ensuring your decision aligns with your travel goals.

Should You Buy or Rent? Five-Year Cost Comparison

Let’s examine a one-bedroom, oceanfront unit in Cabo in this scenario. The initial down payment is $35,000, followed by an annual fee of $3,000, increasing 5% annually thereafter. As an alternative, we estimate renting a comparable condo for $4,500 per stay, once per year.

By Year 5, owning the timeshare costs about $51,600, compared to $22,500 for renting once annually. That two-fold difference clarifies why many families shy away from ownership. If you’re spending nearly $30,000 more over five years, your capital could be invested elsewhere.

Pros and Cons of Timeshare Ownership

Understanding the pros and cons of a timeshare helps clarify whether ownership suits your lifestyle.

Pros of Ownership

1. Predictable Budget: You pay $3,000 each year (plus inflation) before booking. That eliminates surprise spikes in hotel rates and is helpful when coordinating school calendars and extracurriculars.
2. Consistent Unit and Amenities: Your family knows exactly what to expect: the layout, the view, the complimentary kids’ activities, etc. Less time researching means more time relaxing.
3. Family Traditions: Having a preset vacation creates lasting memories and a reliable routine.

Cons of Ownership

1. High Initial Commitment: A $35,000 deposit is a meaningful allocation of capital. If you’re focused on growing a portfolio, that money could be invested, rather than tied up in property rights.
2. Rising Maintenance Fees: Fees begin at $3,000 and grow about 5% annually. Over time, you’re betting on the cost of ownership rising at a slower rate than renting a room.
3. Limited Liquidity: Selling a timeshare can be a logistical nightmare and based on anecdotal evidence it’s close to impossible.
4. Geographic Constraints: Owning a U.S. centric timeshare can be limiting if you or your children crave European museums or Asian cuisines. You’re locked into the program’s footprint.

Are Discounted “Experience Packages” Worth It?

A savvy tip for the curious: many timeshare developers offer four night “vacation sampler” packages for a fraction of the cost you’d pay for the same stay at full price. In exchange, you must attend a two-hour presentation where they pitch ownership. A lesser-known fun fact is that even existing timeshare holders are required to attend annual presentations.

If you’re undecided about a timeshare, an experience package is a way to tour a unit, sample the amenities, and hear the sales pitch firsthand. For some families, this trial run can clarify whether the amenities and experience justify moving forward with a purchase.

Who Should Consider a Timeshare? Ideal Travel Profiles

Timeshares can suit certain travel profiles. Consider these scenarios:

1. Primarily U.S. Vacations: If your family plans to ski in Colorado every January, beach it in Florida each June, and hit the same resort every December, owning may simplify planning and reduce lodging stress.
2. Routine Seekers: Some children and spouses value the comfort of familiarity. Booking the same unit means no surprises.
3. Discounts: If you purchase at a discount (say, instead of a $35,000 deposit you can negotiate it down to $17,500) and the ongoing fees are modest, you might achieve compelling lifetime cost savings.
4. Desire to Stack Multiple Weeks: Programs that allow you to roll forward three years of points can enable a long family reunion or an extended stay. For a large family reunion, combining weeks might be worth the commitment.

With a little bit of negotiating and some advanced planning, a timeshare can be a pragmatic choice.

Exploring Alternatives to Timeshares

1. Vacation Home Rentals: Book on demand and avoid long-term commitments. You might find weeklong discounts, but you’ll still face rate fluctuations during popular seasons.
2. Invest and Rent Strategy: If you invest the $35,000 in a diversified portfolio, setting aside $2,500–$3,500 per year for rentals allows you to enjoy full destination flexibility. While reserving the maintenance fee each year demands discipline, if planned correctly, you avoid being tied to a single resort.

For globally minded families, the freedom to choose new destinations often outweighs the predictability of a fixed-week commitment.

Is a Timeshare Right for You?

Deciding whether to buy a timeshare depends on your travel habits, budget, and long-term goals. Kayne Anderson Rudnick can provide a personalized cash-flow analysis comparing projected maintenance fees, rental costs, and potential investment growth from your initial deposit.