Owning a vacation home where you can relax every year is a dream for many people. But there are a lot of factors to consider when purchasing and managing a vacation property. One of the cost-effective options is timesharing, which provides the benefits of a vacation property but also has some tradeoffs. Keep reading to learn in detail what a timeshare is, how it works, and the different types of timeshares.
What Is a Timeshare?
A timeshare is a type of holiday home with a joint ownership structure. With a traditional timeshare, you split the cost of the property with other owners in return for a certain amount of time at the property annually. These properties can provide you with a sense of ownership while allowing you to share the exclusive use of a place with others during their allocated time. While apartments or condos on resort properties are the most common timeshares, the shared ownership concept may also apply to lodges, single-family houses, yurts, and luxury campsites.
How Does it Work?
A timeshare arrangement lets you share the costs of homeownership with others. In some contracts, each buyer owns a percentage of the property (fractional ownership) based on the amount of time they intend to use it. In others, each buyer just rents the property for a set amount of time, generally several years, without truly owning it. Previously, timeshare buyers were frequently restricted to a single week at a specific property. Timeshares generally employ one of the three systems listed below:
- Fixed Week: Allows the buyer to utilize the property exclusively for a certain week (or weeks) each year.
- Floating: Allows the buyer to have exclusive use of the property for a week or weeks during a set period of time, or possibly the entire year.
- Points: Allows the buyer to purchase a certain amount of points to spend in various timeshare locations and at different periods of the year.
Types of Timeshare Ownership
Timeshare ownership is basically divided into two categories:
- Deeded: A deeded timeshare is one in which you acquire a portion of the property. Each owner is given a percentage of the property, generally depending on the amount of time they expect to utilize it.
- Non-Deeded: A non-deeded timeshare, often known as a “right to use” timeshare, is one in which you acquire a license or lease to use the property for a specified number of years but do not earn an ownership stake in it.
Pros and Cons of Timeshares
Although timeshares are not suitable for everyone, they do have certain benefits for those searching for a reliable and convenient holiday location. But still, there are some significant limitations that investors should be aware of before getting into a timeshare deal.
Pros
- Same location every year without any unexpected hiccups
- Resort-like services and amenities
- Saves you the trouble of picking a new holiday spot every year
Cons
- Ongoing expenses can be hefty
- Limited flexibility when modifying the contract or weeks
- Timeshares are notoriously tricky to resell
If you’re seriously considering a timeshare, we can help. Get in touch with us today to learn more about our timeshare marketing services!
