Is timeshare an investment?
A timeshare can be many things. Joyful holidays (or nightmares), family memories (or long life debts) quality accommodations (or not), and fixed relax time (or no availaility) etc.
What a timeshare can not be is an investment!
Timeshare is not an investment, it is a holiday product. Investments shall appreciate in value, at least long term, and / or should have the potential to generate some extra income.
Now this is exactly what timeshare does not do, no matter what a salesperson is trying to tell you.
Those who have ever tried to sell their timeshare realize immediately that the second-hand market is full of persons who are tired of it or can’t afford anymore their maintenance fees and are willing to give it up for nothing or next to nothing. What you can not find on this second-hand market are the buyers…
Those who have ever tried to give back their week for free to the resort find out that the resorts do not want to get it back. How strange for a lucrative investment, isn´t it? The resorts themselves indicate that their members´ maintenance fee payments have more value than their week!
(We shall add a little note here- since our law firm’s success in the litigations, timeshare resorts are more forced to accept relinquishments in order to avoid future claims).
So if there are no buyers for the used timeshare and you can not even return it to the resort, then it is easy to see that what you bought yesterday has depreciated immediately in value.
In order to be able to talk about an investment you would need to find a buyer who pays more money you paid with all the extra fees you paid since possessing it. Pretty difficult if you look at the resale websites where one can find timeshares for 1€.
Here, at Canarian Legal Alliance we hear client’s testimonies on daily basis where they were assured / guaranteed that their purchase is a great investment. Though no one ever went away for holidays thinking that they want to return home with an investment, the aggressive and persuasive sales techniques during the presentations make their work.
No bank or investments funds ever included timeshare weeks in their portfolio. None of them would invite their potential clients for a free holiday to market their products. So, this very erroneous idea of timeshare being an investment comes from the false sales processes which is not only immoral and unethical but illegal.
Just to mention two examples in Europe: UK timeshare law which came into force in 23 of february 2011 states:
Part 3, Point 14, point 3
“A trader must not market or sell a proposed timeshare contract or long term holiday product contract as an investment if the proposed contract would be a regulated contract.”… ” The trader who contravenes paragraph (3) commits an offence””.
The same in Spain, Timesahre Law 2012, Article 7, point 3.
“ A timeshare right to use property or a tourist long-term holiday product may not be marketed or sold as an investment”
No need to explain after all our opinion about resale companies who ask you for excessive upfront fees, or the resorts very own resale programs which only exist to give to their members a false sense of safety for a future promised sale.
In 2006 the European Consumer Office Spanish branch released a communication in which they state:
“The self proclaimed timeshare resale companies are frauds in their entirety, there is no existing trade structure, nor a second hand market for the timeshare weeks which would justify them”
In summary, let us quote from the Federal Trade Commissions in the USA who says in its Facts for Consumers: “You should know that the value of these options is in their use as vacation destinations, not as investments.”
So just remember that what you are buying is a vacation which is repeating itself. If you do not view a holiday which costed you 3000€ to a tropical island as an investment, then don´t do it with the timeshare neither. Higher purchase price and the yearly maintenance fees won´t make it an investment.