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If you’re the kind of vacationer who values predictability, a timeshare will deliver pre-packaged annual holidays, often at an attractive price.

You only pay for the time you spend there, and maintenance is lifted from your shoulders. That said, there is no cookie-cutter approach to making your timeshare fit your long-term financial goals. Your spending habits, portfolio, and lifestyle will all play a role in your strategy.

Calculating Your Expenses

When you buy a timeshare, you assume a set of annual fees, which come with regular increases. The American Resort Development Association found that the average timeshare costs about $660 a year in maintenance fees. Your property won’t gain value quite like a traditional investment, so it should be seen as a lifestyle purchase. In other words, you’re prepaying for your holidays, so your annual costs should compare favorably to what you usually spend on your vacations. To establish your current habits, take a look at your holiday expenditure and choices from the last three years. If you enjoy a wide range of destinations, a timeshare could be too limiting for you, but if you’re more location-consistent, it could be the perfect solution. It is, however, an expense rather than a fixed or appreciating asset. Its value will depreciate in time.

Timeshares Vs. Property Ownership

If you’re a predictable vacationer, timeshare and property ownership are two of your best options, but they play different roles in your financial plan. Timeshares are a fixed expense, whereas vacation home ownership is an appreciating asset. It will gain value over time if you choose it well. In exchange, you will pay rates, taxes, and maintenance costs. It can become a core part of your investment portfolio. Fractional ownership is another alternative, spreading equity between multiple owners while allowing for appreciation. The principle owner generally owns the title, and time is shared between all investors.

Selling Your Timeshare

Timeshares are often resold at so-called “giveaway” prices. This allows owners to circumvent annual convenience and membership fees. Selling at a loss is often cheaper than not selling at all, but you need to negotiate the market intelligently. Local consumer protection agencies can advise you on your rights, but regulatory bodies such as the RDO, TATOC, and ARDA will also act as protective guides.

Leveraging and Keeping Your Timeshare

If your timeshare will be a loss, it might be worthwhile to try to leverage your points or weeks better instead of reselling. Some timeshare groups also let you exchange unused time for other destinations within the same brand. This lets you vacation at a convenient time without limiting yourself to a single destination. Webinars and events held by your own timeshare company can offer a wealth of information about using your points more efficiently. Just because you already own the timeshare doesn’t mean you can’t gain from reviewing the sales presentations.

Valuating Your Timeshare

Resale values are wide ranging, depending on your timeshare’s location, your usage frequency, season, and unit type. Historical sales prices can help you to arrive at a realistic assessment; you should seek independent advice about sale prices in your area.

Whether you’re reselling or buying, a contract with the timeshare industry should be approached like any other business transaction: with plenty of due diligence and reading of fine print. Assess your buyers, understand their needs, and most importantly, do the math. The sector will serve you only if you let it.

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