real estate

Should You Keep a Timeshare?

Don't confuse your vacation rights with a tax break or an investment.

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.

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.

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.

Most Popular

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs
Coronavirus and Your Money

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs

People have lots of questions about the new $3,000 or $3,600 child tax credit and the advance payments that the IRS will send to most families in 2021…
April 14, 2021
The Wrong Way to Achieve Wealth
personal finance

The Wrong Way to Achieve Wealth

For some down-to-earth, basic advice on money and life, I have a book to recommend: “Your Total Wealth: The Heart and Soul of Financial Literacy.”
April 17, 2021
2021 Child Tax Credit Calculator
Tax Breaks

2021 Child Tax Credit Calculator

See how much money you'll get in advance under the new child tax credit rules for 2021.
April 14, 2021

Recommended

12 Cheapest Small Towns in America 2021
real estate

12 Cheapest Small Towns in America 2021

Affordable small towns aren't necessarily the best places to live for everyone, but each cheap small town on our list has its charms.
April 15, 2021
This Hot Housing Market with Daniel Bortz
Becoming a Homeowner

This Hot Housing Market with Daniel Bortz

Home sales and prices have been on a tear and are forecast to continue to rise in 2021. Whether you're hoping to sell, buy or refi, contributing write…
March 31, 2021
10 Places That Will Pay You to Live There
real estate

10 Places That Will Pay You to Live There

Working remotely? You may want to check out these places that'll pay you to move there.
February 9, 2021
Home Buyers Loving the Suburbs Again
Becoming a Homeowner

Home Buyers Loving the Suburbs Again

Urban condos found little love as telecommuting home buyers bid up prices far from city centers.
January 27, 2021