Client login
Client login

How to Exit a Timeshare Property Without Blowing Your Retirement Savings

From a beach house in Mexico to a resort in the Florida Keys or remote luxury cabin in Alaska, timeshares are popular among the retired crowd. People like the shared ownership model of timeshares because it lets them pre-pay (and pre-budget for) a vacation in a resort where all the maintenance is taken care of. If you like traveling to be easy and familiar, or you’ve fallen in love with a particular setting, timeshares can be a great fit.

But they’re not always right forever. Timeshares are an impulse buy and after a while, people usually want to move on. Either the destination wasn’t as charming as you thought, or the family vacation years have passed and no one’s really using it anymore. Whatever the reason, if you’re looking to get out of your timeshare, keep reading to understand your options. 

Want Out of Your Timeshare? You’re Not Alone

Word on the street is, there are more people trying to get out of timeshares than those looking to buy - which is why you’ll see them on eBay for crazy low prices. There are a lot of reasons people decide to leave a timeshare behind:

  • Can't travel anymore
  • Can't afford the management fees 
  • Other priorities for the money
  • Didn’t use it as much as expected 
  • Want to explore new destinations or just tired of the location

Timeshares have a reputation for being tough to get out of. The good news is, things have gotten better. If you’re feeling the financial crunch of maintenance fees and wondering “can I get out of my timeshare,” don’t panic. And don’t default on your payments, as that could have bad financial consequences for your personal retirement plan

Canceling a timeshare can seem daunting, but there are ways to get out without blowing your retirement nest egg.

Brand New Timeshares Can Use the Recission Period

Just signed a contract on a timeshare, and now you’ve got buyer’s remorse? If you’ve woken up the next day asking yourself “what have I done” there is a short window for you to legally rescind the contract. 

In the U.S. the duration of this “return policy” varies by state. The Federal Trade Commission (FTC)’s minimum requirement is three days, but some states allow up to 15 days. For international properties, you’ll need to research the laws of the country. Check the contract to see whether your window starts when you sign the contract or when you receive the public offering statement. 

Call the Developer First 

If you’ve already had your timeshare for a while, your first move should be to check with the resort itself. Many major timeshare resort developers, including Westin, Hyatt, Sheraton, Club Wyndham, Hilton Grand Vacations, Diamond Resorts, Marriott Vacation Club, and more offer some type of “deed-back” or “surrender” program. There’s some paperwork involved and you may have to do some digging in order to find the right person to help carry out the process - but it’s worth it if you really want out.  

The Coalition for Responsible Exit is a program of the American Resort Development Association (ARDA). The Coalition understands that your circumstances may have changed since you purchased your timeshare, and they want to make it easier for anyone, including retirees, to get out of it worry-free. 

Their website includes a free developer search to help you find what programs they have in place for owners who want to exit. When you call the developer or resort company, ask specifically for the person who handles deed-backs or surrenders. 

Rent it Out, if Possible 

Renting out your timeshare is an option - if your contract allows subletting.  Many Airbnb or VRBO listings are actually timeshares being rented out by an existing owner. Timeshare Users Group (TUG) has an online marketplace for timeshare rentals, as well as advice for owners on how to list their spot. You probably won’t be making a big profit and you’ll need to manage the comings and goings of guests, but you could recoup some costs by renting out your timeshare.

Don’t Count on Reselling for a Profit 

Reselling only works if you don’t have a loan on the purchase. Even then, you’re not likely to make money on reselling your timeshare (no matter what the salesperson told you). Buying a timeshare is not buying real estate, thus it won’t appreciate in value. But when you’re ready to exit, selling is one way to move on and avoid future costs via transfer to a new owner. 

RedWeek is the largest online listing site for timeshare resales. Do some research there and on other resale marketplaces to determine the potential value of yours before listing it.

You Probably Don’t Need a Timeshare Exit Company 

A number of companies exist that claim to help timeshare owners legally get out of their agreements. Of course, there’s a catch. Companies like these have been known to charge several thousand dollars upfront for the promise of freeing you from your timeshare obligations. 

The only reason to hire someone for this is if you don’t mind paying a lot and you really, really want someone else to handle it. But before you do, make sure you understand exactly what their service includes. In many cases, they’re just contacting the developer and asking for a deed-back, which you could do yourself.  A few other tips to help you avoid getting scammed: 

  • Never pay an upfront fee 
  • Be wary of any company that tries to talk you into buying more points or an upgrade rather than cashing out
  • Use free resources available to you first, like the ones we mentioned above 
  • Read reviews from other customers or look for complaints with the BBB; do whatever you can to vet the company beforehand

The bottom line is, trying to get out of your timeshare can leave you feeling frustrated. It is, however, a legally binding contract - simply stopping payments could have financial consequences such as a loan default, lowered credit scores, and foreclosure for nonpayment. Before doing something desperate, consult with your financial advisor. They can help you weigh your options against your current financial situation (and your long-term retirement goals) to find a practical solution.  

If owning a timeshare was part of designing the retirement of your dreams, you’re not alone. If that’s you, then you know, a satisfying retirement lifestyle involves a great deal more than having adequate resources.

To help you go beyond the money and discover how to live a vibrant, ambitious retirement life, get Retirement Secrets!

Retirement Secrets book

Ready to take the next step?

Let’s talk!

Explore what’s possible for you during your retirement

Have You Factored Your Pet into Your Estate Planning?

Most retirees have a will or living trust in place to ensure that loved ones are provided for when the time comes. But have you included your pet in y...

September 23, 2021

Your Guide To Going Back To School In Retirement

When most of us graduate, we celebrate the idea of “being done” with school. But life has a funny way of changing our views. More retirees are returni...

September 9, 2021

Should You Worry About How Inflation Will Affect Your Retirement Planning?

The recent rise in inflation has been impossible to miss. Food costs keep going up, the housing market is red-hot, and gas prices are high, even by su...

September 2, 2021