What is a timeshare and how does it work?

Timeshares are a way to "own" a part of your vacation property without the full cost of a second home. The concept is appealing: guaranteed vacation time in a resort property every year. However, timeshares also come with important drawbacks.

For some travelers, especially those who vacation consistently at the same destinations, a timeshare property can be worth it. For others, it can become an expensive, difficult-to-escape commitment.

Here's everything you need to know to make an educated decision about timeshare ownership.

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Table of contents
What is a timeshare? How do timeshares work? Types of timeshares Buying a timeshare: costs and fees A smart option if you’re sending money overseas: meet Wise. Pros and cons of timeshares What is the best way to exit a timeshare? What is a timeshare scam? Timeshare vs. vacation home

What is a timeshare?

A timeshare is a vacation property ownership model where multiple buyers share the same property. Each timeshare owner is entitled to use it for a specific period every year.

Instead of purchasing a vacation home outright, you're buying the right to use a property (typically a condo or a suite at a resort) for 1 or more weeks annually. Timeshares are usually located in popular vacation destinations like Florida, Hawaii, Mexico, or ski resorts.

How do timeshares work?

With a timeshare property, each owner gets to use the property for a specific time every year, usually 1 or 2 weeks. You pay once to buy your share, then pay yearly fees for maintenance.

Timeshare owners take turns using the same vacation home but only pay for their portion.

The up-front purchase price depends on the property's location, size, and amenities. On average, you can expect to spend 23,940 USD, which feels like a great deal when you compare it with the price of buying a vacation home.¹

Beyond this initial investment, owners pay annual maintenance fees, averaging 1,000 USD, that cover property upkeep, utilities, insurance, and management.² These fees aren't fixed and can increase over the years.

Most modern timeshares use one of three models:

Fixed	You own the exact same week every year at the same property (if you buy week 30, you'll always vacation during week 30)
Floating	You purchase time within a specific season, so you have the flexibility to book different weeks every year within that season
Points	You buy points that work like currency to book stays at different properties in a resort network

Recent data from ARDA (the timeshare industry trade association) shows that 60% of timeshare owners say nothing will stop them from taking a vacation in 2025, compared to just 39% of other leisure travelers.³

Types of timeshares

Timeshares come in different forms, but they all share the same basic idea: you're buying vacation time, not the entire property.

Shared-Deeded

With a shared-deeded timeshare, you own a small piece of the timeshare property (like 1/52 if it's a 1-week timeshare). You'll receive a deed for your share, just like you would when buying a house. You can sell, rent, or even pass this deed to your heirs.

Your ownership typically lasts forever, unless you decide to sell it.

Shared-Lease

In a shared-lease timeshare, you don't own any part of the property. Instead, you're buying the right to use it for a specific number of years.

When the lease ends, your right to use the property goes away as well.

Buying a timeshare: costs and fees

A timeshare costs far less than buying a vacation home outright, but it comes with annual maintenance fees that you'll have to pay for as long as you own your share.

Cost type	Typical amount
Purchase price	20,000 to 30,000 USD (23,940 USD on average)¹
Closing costs	300 to 500 USD⁴
Annual maintenance fees	1,000 to 1,500 USD²
Property taxes	Varies by location

Annual maintenance fees can (and often do) increase every year.

The timeshare resort association determines these increases based on operating costs, property improvements, and inflation. As an owner, you're required to pay them even if you don't use your timeshare that year.

How much is a timeshare per year?

You'll typically pay between 1,000 and 1,500 USD in maintenance fees every year after your initial purchase.² For luxury properties, it can be more.

In the US, you can expect to pay toward the higher end of this range, especially in premium destinations like Hawaii or ski resorts. International timeshares can sometimes be less expensive in countries like Mexico.

These costs tend to increase over time. On average, annual maintenance fees go up by 2% per year.² So, a 1,000 USD maintenance fee today could become ~1,220 USD in just 10 years.

Do you ever pay off a timeshare?

Not really. You can pay off the purchase price of a timeshare if you took out a loan to buy it. However, the annual maintenance fees never end. You'll continue paying them for as long as you own the timeshare, and they tend to increase every year.

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Pros and cons of timeshares

A timeshare can be a smart way to own a vacation property. However, like any major purchase, they have their pros and cons.

Pros	Cons
Guaranteed vacation every year	Annual costs continue forever and typically increase every year
More spacious than hotel rooms with full kitchens and living areas	Difficult to sell or exit
Consistent quality and amenities; no unpleasant surprises	You're locked into specific locations or times unless you exchange
Access to pools, gyms, activities, and other resort features	Hard to get preferred weeks in floating or points systems

If you enjoy returning to the same destination every year, a timeshare property can be a good option for you. However, yearly maintenance fees and a lack of flexibility can quickly turn it into a burden if your financial circumstances or personal preferences change.

Timeshares are notoriously hard to sell, so make sure it's a purchase that makes sense for you in the long run. It's less of an investment and more of a lifestyle choice.

What is the best way to exit a timeshare?

Exiting a timeshare can be challenging.

First, contact your timeshare resort. Some of them offer deed-back or surrender programs, so ask about your options. This is often the fastest and cheapest solution.

If you have to sell your timeshare yourself, you can list it on specialized platforms like RedWeek and KOALA. Some real estate agents specialize in timeshare resales and can help you with the process.

However, it's typically not easy.

If you believe you were misled during the sales process, consult with an attorney who specializes in timeshare law. They may be able to negotiate an exit based on misrepresentation.

💡 Learn more about how to exit a timeshare in our full guide.

What is a timeshare scam?

Timeshare scams can target both prospective buyers and existing owners looking to sell. Here are a few common ones to watch out for:

• Deceptive sales tactics: Fraudulent misrepresentations about contract terms, maintenance fees, or exchange flexibility when choosing a timeshare property

• Resale promises: Companies promising to quickly sell your unwanted timeshare for a large up-front fee, only to deliver nothing

• Exit scams: Businesses claiming specialized legal expertise to cancel your timeshare contract for a large up-front fee, but they simply take your money and disappear

• Fake buyers: Con artists who contact owners pretending to have an interested buyer (or claiming to be one themselves), but they require "transfer fees," "taxes," or other costs up front

• Rental income scams: Promises to rent out your timeshare, but asks for an advance payment for marketing or listing services

• Maintenance fee scams: Fraudsters impersonating the resort or management company demand payment for special assessments or increased maintenance fees

• Bait-and-switch upgrades: Scammers pressuring owners to trade in their timeshare for a "better" one, requiring new contracts and additional fees, but never releasing them from the original obligation

Be especially wary of unsolicited offers to sell or help you exit your timeshare. Timeshare resales rarely recoup the original purchase price, so be skeptical of any company promising you large profits or a quick sale.

Timeshare vs. vacation home

Timeshares cost much less up front than vacation homes. This is one of the main reasons why people buy them. However, they may cost you more in the long run.

With a timeshare, you pay annual fees and have no maintenance headaches, but you're limited to short stays and specific times. Your property rarely gains value and is difficult to sell. You're essentially paying for convenient, predictable vacations, not investing.

Vacation homes are more expensive up front, but you can visit anytime, stay as long as you want, and rent them out when you're not there. The property will also likely increase in value over time.

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So, are timeshares worth it? It depends.

Timeshare properties work best for people who want a predictable vacation and don't mind paying high maintenance fees every year. You have to be okay with your property not appreciating and being almost impossible to sell.

As long as you're aware of these realities, a timeshare can be a great way to force yourself to take regular vacations with minimal costs.

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Sources

1. Investopedia - Timeshare: What It Is, How It Works, and Types of Ownership
2. Ramsey - Timeshare Maintenance Fees
3. ARDA - Timeshare Owners Continue to Prioritize Travel in 2025
4. Buy a Timeshare - Timeshare Closing Costs

Sources checked 05/15/2025