A vacation club is a type of timeshare. But instead of paying to use a single property, like a traditional timeshare, you get access to multiple properties in multiple locations.
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Unlike timeshares, vacation clubs typically do not involve ownership of a specific property or week. They were originally designed to provide vacation club members with access to a variety of resorts and vacation properties where they can book for their future vacations.
Vacation rentalsVacation rentals are considered preferable alternatives to timeshares because they give greater flexibility in where and when you can vacation.
Regardless of how similar or different they are from the timeshares of the past, today's arrangements are called fractionals, condo hotels, condotels, private residence clubs, destination clubs, or something else, but rarely timeshares.
A timeshare is not an investment, it's a vacation. It's also an illiquid asset that is likely to lose value over time. Ultimately, timeshares are like swimming pools, if you buy one, do so because you love the idea of owning it, not because you expect to make a profit.
To join a vacation club, you have to pay an initial membership fee which can be expensive. Membership fees can range anywhere between $5,000 to $30,000. For a luxury membership, it can range anywhere between $100,000 to $1 million. On the contrary, an American vacation cost an average of $2,037.
It's not just about investing well, it's about avoiding the financial mistakes that undermine so many well-meaning, but misguided people. One of these mistakes is getting caught in the timeshare trap. While timeshares may seem attractive at the outset, over time they can become real wealth traps.
According to the U.S. Shared Vacation Ownership Consolidated Owners Report, 2018 Ed., more than five in six owners (85%) rated their overall ownership experience as excellent/very good/good.
A timeshare can offer the perks of owning a vacation home at a fraction of the cost — you only pay for the time you use, as well as any associated maintenance fees. And because you pay maintenance dues, you don't have to worry about handling property upkeep yourself.
Unfortunately, though, it's easy enough to outgrow your timeshare after a period of time. In fact, Dave Ramsey says that 85% of timeshare owners end up regretting their decision. If that's the boat you've landed in, don't stress.