Should You Keep a Timeshare?

published 28 February 2007

Terry Reilly, 71, made his living in the commodities markets. After retiring a few years ago, he was deep into day trading. But timeshares? That's a market he can't fathom.

Swipe to scroll horizontally

Row 0 - Cell 0	What You Need to Know About Time Shares
Row 1 - Cell 0	Buying a Second Home
Row 2 - Cell 0	A Family-Friendly Vacation Home

In 2003, Reilly and his wife, Arlene, paid $10,000 for one week a year at one of several resorts in the western U.S. They also got access through an exchange network to some properties in Florida, where the Reillys winter. The problem, grumbles Terry, is that "if you want Florida, there's a 20-year wait for December."

Two decades may be hyperbole, but the Reillys definitely stumbled upon one of the rubs with timeshares. They discovered the other two when they looked into selling: You may not get back what you paid, and the loss isn't deductible. "If you make money, you pay Uncle Sam, and if you lose, tough luck," says Terry.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

A timeshare's value comes from using it. Consider: After five years of $500 maintenance fees, the Reillys will have spent $12,500, less than they'd have spent to rent a suite each year at one posh resort hotel in Arizona. If they decide to sell anyway, the Reillys should regard the many solicitations they get with caution, since hefty, up-front fees are often involved. Better to use online resale sites, including the timeshare users' group www.tug2net.com, www.redweek.com and www.myresortnetwork.com.

Do you have a money problem we can solve? E-mail us at solved@kiplinger.com.

Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage, authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.