Before this question can be answered, let us take a brief look into how timeshares work.  You can purchase a timeshare, usually for a resort or hotel, which will allow you to make use of their facilities for at least during the year.  Within this specified period of time, you can do whatever you wish with the property.  You can spend your vacation there or rent it out to earn money.  However, before you can do that, you would need to consider the amount of money involved in acquiring a timeshare.

Most timeshares require an upfront payment.  This could be anywhere from several thousands of dollars to much more than that, depending on the location, room type, and number of weeks.  On top of this amount, you would need to pay a yearly maintenance fee, which again varies depending on the same factors.  If you are not able to pay a lump sum on the outset, some developers allow staggered payments over years.  That would mean, of course, added interest on your payments.

So, are timeshares a good investment or not?  Financial experts like buying timeshares to buying a car.  That is, the moment you purchase one, the depreciation begins.  Once you start using it, the value of your purchase declines steeply, unlike a house wherein you can build equity over time.  However, this situation is most often used to describe timeshares which are right to use only.  That is, timeshares wherein you buy a piece of property which does not give you total ownership – just the right to use it at certain times of the year.

The maintenance fee is another topic of interest.  Typically they start off low, just a couple of hundred dollars.  Year after year, though, they do increase, adding to your expenses.

The other type of timeshares, fee simple, gives you full ownership of the property alongside other co-owners.  In this type of timeshare, you can build equity over periods of time.  This is more often used for houses, not resort timeshares, though.

In short, financial experts state that in general, timeshares are not a very good investment.  Aside from the high prices and added interest, they may not give you the flexibility that you want.  There is the option of timeshare trading but it is not always that easy to arrange.  Then there is the issue of reselling your timeshare, which is even more difficult.  However, if your situation fits into the stipulations of timeshares, then it just may the right investment for you.

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