Timeshares, a type of vacation property in which ownership and time spent at the unit is divided between several different people, have often been advertised as a cheaper alternative to a full-on vacation home. But they often come with heavy maintenance costs and, in the midst of the coronavirus outbreak and high rates of unemployment, there has been an increase in people looking to sell their share of the vacation property.
“I think as we’re all looking around the world wondering when we can travel again, the idea of paying $1,000 or so a year indefinitely isn’t very appealing,” Alexandra Olson, CEO of timeshare resale startup Give Up My Timeshare, told ABC News.
According to a report from the American Resort Development Association, the average timeshare costs around $20,000 and has yearly maintenance fees of around $1,000. While many vacation home owners in places like Malibu and the Hamptons have been booked solid by affluent renters who would normally travel internationally, partial ownership makes renting a timeshare much more difficult and pushed many to simply out of their agreement with the timeshare company instead. As the unemployment rate sits at 13 percent, even people with disposable income are trying to cut costs in case of job loss or an unexpected hit to their finances.
That said, getting rid of a timeshare is not so simple — contracts often require a commitment of several years and come with fees of thousands of dollars for those who break them. As outlined by Forbes’ Christopher Elliott, options for getting rid of a timeshare include selling it, taking on the fees that come with breaking one’s agreement or getting a lawyer to help negotiate or even sue one way’s out.
As pointed out by several experts, all of the options available for getting rid of a timeshare have become increasingly more difficult during the pandemic. A lawsuit would mean a protracted battle while selling quickly likely means taking a financial hit.
“Set your expectations low,” Mike Kennedy, the CEO of timeshare rental company KOALA Forbes. “The market does not empathize with what you paid for your timeshare. The true resale market is typically much much lower than what someone has paid.”
While some owners opted to simply not pay the fees and catch up later, doing so could result in calls from credit collectors and a hit to one’s credit. A better option is to contact the timeshare company or bank and ask for some sort of relief.
“Right now, it is critical that timeshare owners are aware that there are so many new entrants in the timeshare exit space,” Gordon Newton, who wrote The Consumer’s Guide to Timeshare Exit, told Forbes. “I’ve counted over a dozen since the start of the pandemic. Many of these companies have no experience in the timeshare exit business and there is no regulation to stop anyone from opening a timeshare exit company.”
As a result, those who want to sell should be cautious in how they arrange their exit — carefully screening companies that promise to get owners out of a timeshare agreement and calculating the costs of selling to avoid paying more money in the long run.
“In no case should you speak with anyone in the sales department,” timeshare expert Lisa Ann Schreier told Forbes. “They have one job and that job is not to help you figure out your finances.”