A drop in value when compared to the initial purchase price that was paid.
Depreciation can either be a complete shock to someone who bought at a presentation, or a blessing for those who buy on the resale market. Either way, there’s no denying that depreciation is present in timeshare ownerships.
Timeshare depreciation can be described by two categories: Initial Depreciation and Market-Based Depreciation.
Market-Based Depreciation has to do with the disparity between resale and presentation prices. When you buy an ownership that sells for a few thousand dollars on the resale market at the presentations, and spend $20-30,000 for the property, you would experience a huge depreciation when going to sell. Even just one day after the deal closed, you would be out thousands of dollars due to you not being able to recoup the inflated marketing and commission costs that are charged in the price you pay at the presentation.
Continued Depreciation describes a more traditional type of depreciation where the property’s value rises and falls according to current market conditions. Say you own a valuable ownership, but when you go to sell the ownership, the market is flooded with other owners selling your exact same ownership. This market condition could cause your ownership to temporarily, or even permanently, depreciate in pricing.