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Should You Buy or Rent a Timeshare?

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Posted on July 28, 2020

The question whether to buy or rent a timeshare has been around for decades, but the answer really depends on personal preference. When dealing with the timeshare resale market, this isn’t fundamentally a financial question, since the numbers compare very favorably. Remember, we are talking resales and not the higher prices you’ll find at the resorts.

The main issue is whether you want to be committed for an ownership period compared to being able to rent without any annual obligations. But the buy vs rent debate isn’t that easily defined. That’s because of the exit options now in existence for many of the branded timeshare programs and the limited durations of some of the ownership options available on today’s market.

Try Before You Buy

If you’re looking at renting as a “try before you buy” tactic, then that is certainly a solid reason to rent. Like test driving a car before you buy it, renting a timeshare at a specific resort during your most desirable time of the year is a great way to get a feel for how your future vacations will shape up. Just remember that many resorts will want to give you the sales pitch to buy a timeshare when you’re on-site, so keep those discounted timeshare resale prices in mind if you decide to take a tour of the resort.

If you’re staying at a timeshare that is part of a branded network of resorts, such as Capital Vacations or Club Wyndham, keep in mind that buying a club membership will give you the option of taking a vacation from among the dozens of resorts in their portfolios. You’ll have preferred access and guarantees that rental customers won’t necessarily have if they book a rental themselves.

Perks for Owners

Certain perks are available for owners such as access to exclusive Owner Lounges, extended lead time for booking accommodations, banking your week for exchange purposes and borrowing from future use to plan for a special occasion.

For owners who are members of vacation clubs such as Club Wyndham, owners can choose from over 200 resorts across North America. Because accommodations are already paid for, owners can also bank their ownership through exchange platforms such as RCI or Interval International and choose from thousands of resorts around the world for their next vacation.

Other benefits can include turning your ownership into a cruise, using it toward discounted hotel stays or enjoying loyalty programs which provide significant discounts on shopping with affiliated merchants.

Limited Ownership Years

For some timeshares such as Disney Vacation Club  or right-to-use ownership in places such as Mexico, the ownership period is limited to a set number of years. This removes any concern about owning in perpetuity, since this can be a concern for some owners.

In the case of Disney, the ownership contract starts at 50 years from the time the resort opened, so the original owners would have their ownership limited to that period. If they sell their points on the resale market, the buyer would purchase those points for the remainder of the contract, so their ownership period would be limited. Disney offers extensions, but the time limit can offer peace of mind to buyers even though the market can be fairly robust for selling Disney timeshare resales.

As with many overseas timeshare ownership options, Mexico timeshares are sold as a right-to-use product, meaning the owner buys the right to stay in the unit and not a deeded real estate option. This places time limits on the ownership, with contracts expiring after a set number of years. Such limits give buyers a defined ownership period with the knowledge that their ownership will eventually end.  

Now, About the Financial Side

Let’s tackle the financial side since that is the focus of many potential buyers. Conventional wisdom seems to be that renting is significantly less expensive than buying, but is it?

Let’s look at Wyndham Bonnet Creek resort in Orlando, one of the most popular resorts in the Wyndham collection. When looking at our website, you’ll see a discrepancy of asking prices for points associated with the resort. So you’ll need to know how many points it’ll take to get the unit you want and start from there.  

A 1-bedroom Deluxe unit at Wyndham Bonnet Creek requires 166,000 points in Prime Season for a week’s stay, which is the season we’re in now. There are several options on our site which would fulfill this requirement, but to illustrate my point we’ll use the listing asking $2,300 for a package of 166,000 points. At the current rate for annual fees, the fees would add up to about $1,200 per year. So prorate the total figure for the purchase price plus fees over 10 years and the week would cost about $1,430 per year, or about $204 a night.

Now compare that with booking a room through an online travel agency such as Extra Holidays and you’d be paying about $227 a night including tax. Even some of the more well-known outlets such as Expedia are showing prices around $200 a night not including any discounts, but remember the times we are in and the COVID-related price slashing that is currently taking place.

Those discounts won’t be around forever, and buying a timeshare gives you a much better chance to get the room you want at the time you want it, especially if you buy a fixed week ownership.