Timeshares may seem like a complicated concept at first, but the more you know, the more you can benefit from timeshare ownership. If you are a new timeshare owner, or someone who is interested in purchasing a vacation ownership property, there is no doubt you are wondering: how do timeshares work? This goal of this lesson is to provide you with an overview of timesharing and its benefits.
A timeshare (also often called vacation ownership) is an arrangement in which multiple owners share the rights to use a vacation property. Each owner is allotted a specific amount of time (typically a week). Timeshares appeal to many avid vacationers, because you can guarantee your vacation accommodations each year.
However, the term “timeshare” is now often used to generally describe systems of joint ownership of vacation properties or resort units. There is now more flexibility than ever before in the types of timeshares you can own, and how you can use them. To learn more about the types of vacation ownership now available, read on.
How do timeshares work?
There are two main types of timeshare ownership. With deeded ownership, you own the timeshare indefinitely; you can rent it out, give it away, leave it to heirs, or sell it at any time. With “right to use”, you can still rent out or sell your timeshare, but when your lease expires, the developer regains ownership.
Within the two types of ownership explained above, there are a number of different options available to you as a potential buyer. Which you choose will depend on your vacation habits and need for flexibility.
- Fixed Week Timeshares — you own a specific unit type for a specific week at a single “home” resort. This is a great choice for owners who like to return to the same destination every year.
- Floating Week Timeshares — you own a specific unit type for a week within a specific season (defined as blocks of weeks). As a floating week owner, you can reserve a different week within your season each year, giving you greater flexibility in when you can travel. Some floating week ownerships may also offer the option to book stays within a network of resorts rather than at a single home resort.
- Fractional Timeshare Ownership — though technically not a timeshare, it’s similar to timeshare ownership in many ways. With fractionals, you own a timeshare for a longer block of time than a single week (usually ranging from 4 to 12 weeks), and — similar to a fixed week timeshare — your usage falls within the same period each year.
- Timeshare Points — possibly the most flexible timeshare ownership option. With this type of ownership, you purchase an allotment of points that you can use within a “vacation club” or network of affiliated resorts. You can think of points as a form of currency that can be redeemed for vacation accommodations. Points also do not tie you to a single unit type or size. Vacation clubs that offer points also frequently offer the option to roll your points over into the next year and enjoy a vacation upgrade. You can also often split your points up and go on a couple of shorter vacations each year.
In most cases, you can also choose how often you’d like to make use of the timeshare yourself.
- Annual — the most common frequency; you can use your timeshare once every year.
- Biannual — you can use your timeshare twice every year.
- Biennial — you can use your timeshare once every other year.
- Triennial — the least common frequency; you can use your timeshare once every 3 years.
In addition, timeshare owners can take advantage of timeshares outside of their resort network through a process called “external timeshare exchange”. So, if, for example, you own a Wyndham timeshare, you automatically have access to all of Wyndham’s timeshare resorts. But what if you want to visit a Marriott resort one year instead?
For an annual fee, timeshare owners can purchase a membership to a company that manages external timeshare exchanges, such as Resort Condominiums International (R.C.I.) or Interval International. This gives them access to vacation properties affiliated with their external timeshare exchange company of choice, regardless of what brand or resort network those properties belong to. Though additional fees apply to each exchange, having a membership with an external timeshare exchange company gives you greater freedom in choosing exactly where you want to stay while on vacation. It can also sometimes result in you being offered discounts on additional vacation rentals and opportunities.
What are the pros and cons of timeshares?
As we’ve mentioned, one of the biggest “pros” of timeshares is their reliability. That is, since you own the right to use a property for a specific period of time, you have the final say in whether or not you will be using the property yourself for that period of time, or will be temporarily renting it out to someone else. This is useful if you have a favorite vacation spot and like to go there at the same time every year; you won’t have to run around booking other accommodations, because you can just use your timeshare instead.
As we’ve also explained, timeshares can be flexible, too. If you don’t feel like using your timeshare during the same block of time every year, there are some arrangements in which you can pick a week (or two) from among a particular block of weeks in a season. In some arrangements, you can also split up your vacation time between two different properties in your resort network, or forego vacationing for one or more years so you can save up for a vacation at a higher-end property in your network during a later year. You can even vacation at timeshares outside of your resort network if you buy a membership to an external timeshare exchange group.
One thing to be wary of if you’re thinking of purchasing a timeshare is the potential cost involved. First of all, you have to pay for the ownership of the timeshare (for whatever length of time you’ll be using it each year). In addition, if you cannot pay for the timeshare in full at the time of purchase, you will incur interest charges through financing the purchase through a mortgage, line of credit, or the like. Finally, you will be expected to share annual maintenance costs — for things like upkeep, landscaping, and renovations — with your timeshare co-owners. Note that these costs can vary greatly depending on what type of timeshare you purchase, and where it is located.
Another potential “con” to owning a timeshare is that it’s a very competitive industry, at least right now. This means that there are plenty of people looking to sell or rent out their timeshares, but not as many looking to rent or buy them. This is where having a company such as SellMyTimeshareNow on your side to advertise your timeshare to a larger audience can be a big help. See our article on how to sell timeshares on SellMyTimeshareNow for more information.
Where can I buy, rent, or sell timeshares?
Timeshares are most commonly purchased at resorts. This usually follows the buyer’s attendance at a timeshare sales presentation. And there is something to be said for experiencing a resort first-hand before purchasing a timeshare on it. However, keep in mind that timeshares sold this way are often much more expensive than timeshares sold elsewhere. Resorts often engage in expensive promotions and giveaways to bring in potential buyers, resulting in markup to cover marketing expenses. Another thing to keep in mind is that you can negotiate with the sales representative. If you are considering purchasing a timeshare directly from a resort or developer, be wary of accepting the first price that is offered to you.
Less commonly known is the option to buy a timeshare on the resale market. Owners who no longer have a need for their vacation properties can advertise them on the resale market. Similar to traditional real estate, you may find timeshares for sale by owner, as well as timeshares for sale through licensed real estate agents.
One of the main benefits of purchasing a timeshare through the secondary market is that you can often find timeshares at incredible discounts, compared to the pricing you would find when attempting to buy one directly from a resort. Another advantage is that you can submit offers for a timeshare that are less than the asking price, just like you would be able to if you were looking to purchase a home. Again, SellMyTimeshareNow is a great resource if you’re looking to deal with this side of the timeshare industry.
That completes our introduction to timeshares! For more information on timeshares, consider reading the other articles in our SellMyTimeshareNow course. To learn about further advantages of purchasing or renting timeshares by owner, check out the information guides available on SellMyTimeshareNow.com.