Are you trying to sell your timeshare?  If you have fallen into this money trap you will want to read this post.  If you are interested in buying a timeshare and want to know all the pitfalls and money traps you will want to read this post as well.

Today’s post is all about financial money traps and in particular my personal biggest money trap that I’ve recently been through, timeshares and how to get out of them.  Then in the next post I’m going to talk about some of the smaller money traps I’ve faced and how to avoid them.

I was going to do just one article on all the money traps I’ve fallen into but felt this particular subject on timeshare needed it’s own space.

Why Are Timeshares Are A Bad Buy

With all the money I’ve invested into my timeshare and the little return I got back from it this has been my biggest stumbling block ever.  Personally though I am the only one to blame for the situation I am in.  I made the decision to buy it and as a result of poor education on the subject I paid the price, almost $7000.

Believe me though when I tell you sales reps for timeshares will literally tell you anything to get you to buy a timeshare.  In fact when I bought mine they took me out to lunch for a free meal and even gave a free trip to the virgin islands just for taking a look.  This may be the only good thing about the whole process.  However they’re a few things that you need to realize.

• Timeshares aren’t an investment. When I bought my timeshare are sales rep informed us that it will grow in value as time goes on and you can sell it for more.  This is totally false.  Timeshares do not grow in value.  They are no more than just a time slot which you own at a resort not the actual real estate itself.
• Timeshares are very hard to sell. If you wanted to sell your house you could put a for sale sign in the front yard but with a timeshare in say ARUBA, how would you sell it?
• Timeshare loans have high interest rates. If you aren’t buying your timeshare straight up then you will have to take a loan on it.  My timeshare had a 16% interest rate on it.  You can bet I paid it off quickly.
• Timeshare exchanges are expensive. To exchange your timeshare to another resort destination say Hawaii you will have to pay what is known as an exchange fee for around $100 to go to a different resort.
• You have to pay for the maintenance at your timeshare. This can be costly when owning a timeshare.  Even when you have the timeshare paid completely off you still have to deal with maintenance fees.  Mine was over $600 every two years and that’s not all.  They usually increase it by 10% a year.
• You have to pay for timeshare membership fees. Finally, once you do have a timeshare you have to pay membership fees to a timeshare network in order to use your timeshare or exchange it to go some place else.  These fees can usually range for about a few hundred dollars just to be a member.

As you can see even if you do buy a timeshare and own it free and clear it will still cost you.  Now am I saying all timeshares are bad.  No, I’m saying that timeshares have a lot of pitfalls that someone with no education on the subject can fall into a bad money trap like I did.  So how do you go about getting out of this money trap?

4 Ways To Sell Your Timeshare

When you are going about trying to sell your timeshare there are good ways to do it and some terrible and expensive pitfalls to watch out for.  Below are 4 ways to sell a timeshare, and only 3 of the 4 are recommended ways to do so.

1. Listing Services. I don’t recommend this option.  A timeshare listing service is usually an online service where you pay them an up front fee of usually around $600 to list your timeshare with them.  Trust me when I tell you these services don’t work.  I have spent nearly $1200 with these services thinking they would send me some prospective buyers and I got zero offers form both companies I listed with.  Though if you or someone you know has had luck with these services let me know and leave a comment below.
2. Timeshare broker. I’m not sure if this is a viable option but this would be like hiring a real estate agent to sell your property for you.  The reason why this would be better than going through a listing service is because the broker only gets paid unless they sell the property but do know that the broker will get paid a portion of the money you make when you sell the timeshare.  If you have more information about this option leave a comment below and let us know.
3. Sell it yourself. With websites like eBay out there selling your timeshare, this may be a great option if you would like to do it yourself.  Though you should know you may or may not get the price you want out of it and if you do sell it yourself your timeshare could force you to pay a title transfer fee around $150 or more and the next years maintenance fees.
4. The Buyback option. If you can’t find a buyer and just want to cut your ties with the timeshare call your timeshare and see if they have a buy back option.  Though you should know that you will only get about 10 cents on the dollar back out of it but at least it will be out of your hands.  The timeshare may also make you pay the next years maintenance fees as well.

Did the above information help?  I hope it did.  I know how much pain this has caused me and hope I can inform others so they don’t fall into this terrible trap.

Do you have a timeshare?  Are you considering buying one?  If you are leave a comment tell me about your situation.  Is it a money trap or do you like it?

Freatured in The Carnival Of Personal Finance #184: From The Land Down Under

If you like this post also read this post on Timeshare Resale Scams.