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Buying a beach front property or a vacation villa may be easy for the rich and wealthy, but not for common middle class people. The introduction of the timeshare concept gave hope to those people who could not afford to buy a brand new vacation home. That is one of the reasons why the timeshare industry has grown by leaps and bounds ever since its inception in the United States.

Many people love timesharing properties because it is like being on vacation and at the same time being at home, without worrying about keeping it clean and tidy; but, on the other hand, people have many prejudices about timeshares.

Buyers often misunderstand the concept of timeshares and consider them as regular real estate property and a viable investment option. But if a buyer is thinking about investing in a vacation home near a location they visit frequently, a timeshare might not be the best investment. Investing in real estate property with an outright purchase of a home could return a significant profit. But if you invest in a timeshare, a return is not guaranteed and could in fact cost you money.

What if you expect no profits from your purchase but want to make sure you won't incur any losses, either? People who buy timeshares often ask this question. They want to make sure it's really worth their while to buy a timeshare. In order to answer the questions, you need to ask a few more. What would it cost you to rent accommodations elsewhere? Will the timeshare appreciate in time? What kind of interest rate is available for timeshare purchase? Read on, and you'll find a simple method of calculating these factors so that you can analyze the feasibility of buying a timeshare.

What is the worth profit of your investment? The profit on your investment should consider the comparable rental rate, finance rate and rate of appreciation in value. If these results are a negative number, then it is most likely that you are losing money. The ratio of rent for vacation property and what it costs to buy a timeshare is something to consider. For example, if the rent on your vacation timeshare is $1,000 with a buying price of $10,000, the rental rate would be 10%. Also consider the other expenses of maintenance, membership and any other expenses, which amounts to about $500. With this in mind, the actual savings in rent would be about $500 with a rental rate ratio of $500 to $10,000, in other words, 5%.

Let's start with an annual property appreciation of 10% and a finance rate of 16%. By adding the amount received for rent payments to the appreciation value and subtracting the interest paid on financing, we'll end up showing that you are losing 1% more than your assets over a year's period. Of course, this is only a rough estimate which may not give you the true picture. It should only be considered as a place to start. Both depreciation and finance rates will vary from year to year, too.

The maintenance fees and other fees may also vary with different locations. Some resorts charge reasonable maintenance and other fees, but some exorbitantly high fees. So, this is also should be a factor in deciding which resort to choose. It is not a smart idea to pay unusually high fees when you don't know whether you can utilize the property year after year and you may think of renting out the unit which is not a profitable proposition either.

Another good idea is to add up the cost of your timeshare for the entire year (i.e., all fifty two weeks) and see. For the above investment, it may be around 520,000. But does the timeshare property cost that much if somebody wants to buy it as a real estate property? The extra money goes into the pockets of real estate developers who are selling the timeshare. So carefully weigh in all the factors discussed above before buying a timeshare property.