Timeshares Seem To Be A Money Pit With Few Returns

You can't walk through the lobby of any Orlando hotel these days without seeing signs for reduced rates or free tickets to the area's amusement parks. Of course, there's a hitch: You have to hear the pitch of salespeople who want you to buy a timeshare.

The dream they're selling is having a place at a luxurious resort where you can vacation each year. You buy either a specific week or points that can be exchanged for any week. There are people who adore this system, so much so that they buy multiple weeks at various places.

They like that it forces them to take a vacation when they may not otherwise have left town. Other people love that you can buy a share in a particular place but use it like a voucher for another place anywhere in the world.

Owning a timeshare means having a perpetual obligation. You own it forever, and you can pass it on through your will. It's fine as long as you want it. But that's the end of the good news.

The shock sets in when people see their maintenance fees go up or get hit with assessments that leave them with no rights to appeal. When you buy a timeshare from a developer, most of what you pay for is marketing, sales, promotions and commissions. Almost none of the money goes to the value of the timeshare. Typically, timeshares lose 80 percent of their value immediately. What other purchase would you want to make that loses that much?

Another problem arises when you want to sell. Most people find that it's almost impossible to do. I get a lot of calls and e-mails from people who want to give their timeshare away, and nobody will take it! Because they lose so much value and are so difficult to sell, I consider timeshares to be a defective purchase.

People who are still sold on the idea would do well to buy one from someone who's desperately trying to get rid of it. Some buyers have found good deals on eBay, but I'd suggest doing a lot of study on the timeshare resort before you buy.