Second Home Real Estate Trends & Insights

Timeshare salespeople are known for pushy tactics and a tendency to overpromise and underdeliver. The truth is, timeshares rightfully have a stigma attached to them due to their high costs and strict limitations. If you’re tempted to buy into one, you should evaluate these timeshare alternatives before signing on the dotted line. There are better options for your vacation, including: Let’s dive into each alternative and how they stand out from the typical reasons to not buy a timeshare. 1. Vacation rentals Vacation rentals like Airbnb and Vrbo are nothing new, but advancements in technology have aided in their exploding popularity. Renting the property of a private owner is often cheaper than comparable hotel rooms, and they often give travelers added perks like kitchens and convenient locations. Vacation rentals are considered preferable alternatives to timeshares because they give greater flexibility in where and when you can vacation. You’re only paying for specific days, so you aren’t on the hook for yearly fees on top of the purchase price of a timeshare. Timeshare owners often sell their timeshare days when they can’t use them, giving vacationers the option to visit the same timeshare facility without the long-term commitment. Pros Cons No long-term commitment Available around the world Affordable nightly rates Limited quality control Missing sought-after amenities 2. Hotels Hotels are consistent and safe timeshare alternatives that are accessible all over the world. When you book a room at a Marriott in Chicago, for example, you’ll get a comparable experience to a Marriott in Los Angeles, taking out the guesswork in finding quality accommodations. On a night-by-night basis, the cost may be higher than a timeshare, but when you factor in yearly timeshare maintenance fees, you’ll usually come out ahead. Hotels often provide discounts to certain groups (like the military and AAA) or will simply offer discounted rates throughout the year, making them even more affordable. Some hotel chains offer rewards programs, so the more you stay there, the more you get back. Solo travelers and people traveling in small groups can opt for a related option to save even more money: hostels. They are typically sparse in accommodations, but the trade-off is worth it for people who enjoy different locations every year. Pros Cons Professionally managed No long-term commitment Available around the world Offer rewards programs May have fewer amenities than a timeshare Expensive nightly rates 3. Resorts Resorts are like hotels on steroids, offering the all-inclusive appeal of many of the best timeshares. Many resorts provide private beach access, live entertainment, gourmet food and guided tours. You’ll spend less time planning all the details of your vacation, leading to less stress and more time enjoying your break. Just like hotels, resorts give you the flexibility to stay for longer or shorter durations than a timeshare. You won’t be boxed into traveling at predetermined times of year, and you can visit whenever you want. Pros Cons Professionally managed Available around the world No long-term commitment Comparable amenities to timeshares More expensive than a timeshare on a per-stay basis 4. Vacation clubs Vacation clubs are the closest alternative to timeshares. To join, you’ll pay an initial sign-up fee, plus yearly membership and maintenance fees for as long as you’re a member. In return for your membership, you’ll receive discounts to the destinations in the club’s network. Many clubs have blackout dates that restrict your ability to travel unless you pay more money. Depending on the club you join, it could end up costing more per year than even luxury timeshares, but you’ll have easier access to multiple destinations. Pros Cons Access to multiple locations Comparable amenities to timeshares Discounted stays Require expensive membership fees Blackout dates 5. Travel clubs Travel clubs operate similarly to both timeshares and vacation clubs while being slightly more affordable. Travel clubs require yearly membership fees, and some clubs charge maintenance fees as well. These combined costs are often lower than those of vacation clubs. The benefit of travel clubs is that they arrange for group rates, making your stay cheaper while giving you the benefit of travel companions. Oftentimes the club is centered around a shared trait, like a hobby or age group. Aside from the social aspect of travel groups, travel clubs also free you from long-term commitments. Even the cost of an inexpensive timeshare begins to add up over the years if you aren’t able to sell it. Since membership to a travel club is yearly, you’ll only lose what you’ve already spent. Pros Cons Access to multiple locations Discounted stays Organized group travel Expensive membership fees Rigid travel dates 6. Vacation home ownership One big draw of owning a timeshare is the dependability of returning to the same destination year after year while avoiding the rising costs of accommodations. Buying a second home in a vacation destination gives you those same benefits and more. Unlike a timeshare, buying a vacation home gives you real equity in the property, so you have the potential to recoup the money you put into it over the years. Timeshares rarely appreciate in value, and due to the many drawbacks of timeshare ownership, they can be extremely difficult to resell. When you have your own vacation home, you have the freedom to use it as much as you want. In contrast, most timeshare options only allow you to use them once per year and have fixed scheduling limitations. Pros Cons Potential equity in the property Can visit as much as you want Can travel with friends Easier to resell than a timeshare Single location Responsibilities of property ownership High upfront cost 7. Second home co-ownership Buying a vacation home is a greater upfront expense than a timeshare, but you don’t have to be the sole owner. Co-ownership is a viable way to make that dream of a second home a reality. With this timeshare and vacation home alternative, you’ll only be responsible for a fraction of the purchase price and yearly costs of ownership. Whether you’re buying with a group of friends or buying a Pacaso second home, you still have true real estate property ownership. You’re not just buying the right to use a hotel or condo-sized space for a set period of time. Timeshares are notoriously difficult to sell due to the many rules and limitations owners must abide by. The timeshare is also one of many identical units, creating an imbalance between supply and demand. On the other hand, unique homes attract buyers who must compete against each other in the whole housing market. Pros Cons Gain equity in the property Can visit frequently Can travel with friends Lower cost compared to sole ownership Easier to resell than a timeshare Single location Responsibilities of property ownership Evaluate your vacation options Not all timeshare alternatives are equal. Depending on your vacation goals, it might make more sense to either stick to vacation rentals or make the investment in a vacation property. And if you’re interested in the benefits of second home co-ownership, Pacaso is here to help.

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