Consumer Alert: What to Know Before Attending a Timeshare Presentation

It’s vacation season, and if you’re planning on staying at a resort, you’ll probably be asked to attend a timeshare presentation. The perks can be tempting – from free meals to deeply discounted hotel stays. But is it worth it?

The timeshare industry is huge. According to the American Resort Development Association, it’s a $10.5 billion industry. That’s comparable to Major League Baseball’s revenue of $11.6 billion last year.

But when you purchase a timeshare, you’ll have to pay maintenance fees that average $1,500 to $2,500. It’s important to realize that this isn’t like buying a property, says Rich Folk, a former timeshare manager who now runs Timeshare Compliance, a company that specializes in timeshare exits.

Deanna Dewberry: “Your timeshare is not really an investment. Your timeshare may even lose value. Can you comment on that?”

Rich Folk: “Yeah, that’s one of the things we hear a lot: They (timeshare sellers) portray it as a real estate purchase. They use scare tactics like foreclosure or mortgages. In reality, it’s an unsecured debt. It’s no different than a credit card or a gym membership. It’s a right of use.

Deanna Dewberry: “If you try to sell your timeshare, you’re actually going to face a lot of competition because there’s a huge supply of other people just trying to avoid the maintenance fees, right?”

Rich people: “The average person is just clueless and thinks there’s a resale market or the developer sold it as a rental property, which is obviously not the case. Frankly, it’s hard to let something like that go.”

Deanna Dewberry: “Let’s talk about perpetuity clauses, because many timeshare contracts have that in the fine print. Can you comment on that?”

Rich people: “Yes, that would be forever, that is, it would pass on to your children and grandchildren.”

They say there are benefits to owning a timeshare, but you need to research the company. Ask questions like:

— Does it offer owners exclusive benefits or access that is not available to hotel guests who pay for overnight stays?

— Do owners have priority when making reservations?

— And will your family use it at least once a year?

If you attend a timeshare presentation just because it’s free, be prepared to make your case. I have found timeshares of the property on the resale market for a fraction of the price offered during the presentation and then brought copies of those timeshares to the meeting. This shows them that you won’t be pressured because you know how cheap the property is on the resale market.

Don’t let yourself be pressured into doing something that just doesn’t feel right. It’s your time, your money, and your decision.