Have you ever listened to a presentation about a timeshare that promised you free tickets to a theater or other nice perks in return for giving up a few hours of your day? It’s possible that you went into that presentation thinking that you wouldn’t be able to take money out of your savings to pay for a timeshare.
However, timeshare salespeople can be very persuasive. Additionally, you might find yourself actually considering making a purchase.
Although timeshares can be beneficial to some individuals, financial expert Dave Ramsey recommends against them. In point of fact, he refers to timeshares as a “real estate trap.”
According to Ramsey, the issue with timeshares You could argue that purchasing a home is an excellent investment.
Now, the fact of the matter is that getting a mortgage loan should be about getting a roof over your head, not making money. Still, home values have the potential to rise over time. However, Ramsey contends that this is not the case with timeshares. A timeshare cannot be considered an investment that might appreciate in value due to the fact that you do not actually own a piece of property.
Additionally, because you are not selling a piece of property but rather the option to use one, timeshares can be extremely challenging to sell. Additionally, there are ongoing costs associated with timeshares. Those might deter potential customers.
In addition, Ramsey warns that timeshare fees may increase in the future. Even if you don’t use your timeshare because you can’t get away or want to try a new place, you’ll still be responsible for paying them.
Check out our picks for the best mortgage lenders Ramsey says that timeshares can be hard to rent out as well as hard to sell.
You won’t be able to do that with many timeshare companies. However, you can only rent your timeshare for the weeks to which you are entitled.
Last but not least, you’ll need to finance your timeshare if you can’t pay for it outright. Additionally, this could necessitate substantial loan interest payments.
Don’t waste your money. It’s easy to see why you might want to buy a house where you can live full-time. However, buying a timeshare is very different from buying a house. Additionally, Ramsey strongly discourages the latter.
Keep in mind that your vacation-related preferences and requirements may evolve over time. Additionally, purchasing a timeshare may leave you with fewer options.
Imagine that you own a timeshare in Florida but are sick of it and would rather go to an island. Guess what, if you can’t find someone to swap your timeshare or come up with another arrangement? If you go to Florida, you might get stuck.
To be clear, Florida does not have anything wrong with it. Instead, the point is that timeshares can be very restrictive and make a vacation, which is supposed to be fun, into a stressful experience. Therefore, it’s not worth spending your hard-earned money on something you might regret later.