Timeshare Troubles
My dumbest investment has been in a timeshare property. Don’t believe the hype you’ll hear from the sales team: They are selling high-price maintenance fees that never end, while telling you you’re getting a bargain on vacations. — M.R., via email
The Fool Responds: Timeshares have been extremely regrettable investments for many people. Still, they might suit some folks, in certain circumstances. For example, they can be good for large families, as some feature several bedrooms and a kitchen, helping you avoid renting multiple rooms and eating out all the time when on vacation. (Of course, you might simply rent a house or apartment for a vacation, too.)
On the other hand, beware of the downsides: There are often maintenance fees (which tend to increase over time) that are due regardless of whether you use the unit, and contracts sometimes last forever, becoming burdens to heirs. If you’re thinking that you’ll simply sell the timeshare before you die, that can be hard, too. Many are very difficult to unload, with some “exit” companies having been created just to help you get out of your contract.
It’s smart to think twice before buying a timeshare. Many end up being used far less than planned. Some timeshare purchasers will be happy, but anyone considering one should do a lot of due diligence into what the total costs will be — and think of it as a vacation purchase, not an investment.