Timeshares have been around since the 1970s, and they’re still popular with many people
today. For those unfamiliar with the term, a timeshare is a vacation destination property in which
several parties share joint ownership. Each party is allotted a certain period of time during the
year in which to stay on site and utilize the amenities. Many timeshares are located on or near
resort property, so it can be a good way to vacation if you intend to get away every year.
To the business-minded investor, timeshares may sound like a fantastic investment
opportunity. Unfortunately, the reality is that timeshares are not ideal investments for several
reasons. Let’s take a closer look at some ways in which timeshare properties fall short, and then
we’ll tell you where to better invest your hard-earned money.
• Depreciation. Unfortunately, unlike most real estate, timeshares do not hold their value well.
There’s a large and oversaturated resale market for properties such as these, so expect it to
depreciate over time.
• Lack of Liquidity. Real estate is, by nature, not very liquid. If you need funds or you’re
planning on reorganizing your assets, you might be a challenge to find a buyer for your portion
of the timeshare property. Even worse, you’ll be hard-pressed to recover your initial investment
due to an oversaturated market.
• Maintenance Fees. Timeshare owners must pay an annual maintenance fee. While this may
sound like a benefit, especially if you don’t have to worry about doing any maintenance work
yourself, the truth is that owning a rental property will be much cheaper and more lucrative in the
end.
• No Passive Income. Because you are not the sole owner of the property, you cannot lease it out
like you might with a vacation house. You are entitled to only a portion of the year.
Here are two alternatives to investing in timeshare property:
• Rental Property. If you’re looking to invest in real estate, you can’t go wrong with rental
properties. Not only do they generate passive income, but they appreciate in value over time.
2
• Vacation House. For those who liked the vacation aspect of a timeshare, consider a vacation
home. You can use it any time of year, and then you can rent it out to vacationers for a solid
passive income when it’s not in use.
Navigating the real estate market can be tricky. Fortunately, when it comes to the
Charlotte investment, we’re no strangers. Talley Properties has over 40 years of experience
helping clients build and manage their portfolio. Contact us today to learn more!
