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What Is a Timeshare?
A timeshare offers regular access and partial ownership to a condo, resort, or vacation property. Resort rooms and timeshare units are usually situated at popular travel destinations, like mountains, beaches, or theme parks. If you are in the market for a vacation property, you can use this guide to help you make an informed decision on the best timeshare option for you.
There are a few factors to consider when deciding to purchase a timeshare. These are the type of ownership (who will own the property and the way it will work to visit the timeshare), the type of contract, and its advantages and disadvantages.
Types of Timeshares
There are different types of timeshares. Some timeshares provide you with more flexibility; others are more cost-effective.
The different types include:
- Fixed week. A fixed week timeshare is a common type of timeshare ownership. It is usually deeded, and each year, you own the same week at a certain "home" resort. Having timeshare weeks make it simple for you to secure your desired travel week.
- Floating weeks. With floating weeks you can book use of the resort or unit at any time throughout the year, subject to availability. Floating week timeshares do have certain drawbacks. Many members have found themselves unable to book their time at the timeshare because of a lack of availability. Many resorts selling floating weeks contracts often reserve the best times for their employees or prioritize non-member bookings overpaying members.
- Points-based timeshare. Points-based timeshares are also a popular type of timeshare. You're allotted a yearly apportionment of points you're able to trade for resorts within:
- An exchange program
- A brand's inventory
- A brand's affiliate resorts
You can sometimes exchange your points for other types of holiday products like airport transfers and flights.
A specific time of year at a particular resort may have different point values for booking space with timeshare points.
Timeshare points provide you with more flexibility regarding where and when you take your trip. However, similar to floating weeks, it can be difficult to find time due to lack of availability.
- Fractionals. A fractional timeshare is similar to a fixed week timeshare. The exception is that every owner's usage rights are usually for bigger blocks of time, typically 4 to 12 weeks per year. A fractional timeshare is also usually higher-end and, in certain cases, might be a standalone condo or home instead of a resort suite.
Advantages and Disadvantages of Timeshares
There are both advantages and disadvantages to timeshares you need to consider before you buy.
Advantages of Timeshares
Some advantages of timeshares are:
- Lower long-term vacation costs. Purchasing a timeshare is a way of buying your vacations and investing in them for the long-term instead of simply taking vacations and potentially paying higher rates at hotels each year.
- Fun for family, friends, and groups. Many timeshares feature multiple bedrooms, making it possible for family members and friends to split a timeshare and plan a vacation together. This is particularly helpful for bigger families. Each year, their vacation reunion with family members and friends is pre-planned for a specific time, which makes it easier to see your loved ones regularly.
- You have a built-in vacation each year. Timeshares offer you a hassle-free way of experiencing and enjoying your yearly vacation. You are already familiar with the timeshare and the amenities it includes, so you will not need to worry about what you will be doing once you get there. Also, because you use the timeshare during a specific time each year, you can plan your trip in advance.
Disadvantages of Timeshares
Some disadvantages of timeshares are:
- Up-front investment. With timeshares, you are pre-paying long-term vacation costs upfront, instead of on an annual or as-taken basis. That can mean a sizable investment on your part with uncertain usage of the timeshare down the road.
- Timeshares can be hard to sell. There are many secondhand timeshares on the market which can make reselling difficult if you decide to change your mind. Second hand units are often resold at steep discounts, so purchasing a used unit on the secondary market may seem like a good financial decision, however, there have been warnings by the Better Business Bureau about timeshare reselling schemes, so be wary and do research before signing anything.
- There might be unexpected fees. Unexpected fees are common with timeshares. While you can definitely expect to pay for taxes, utilities, and routine maintenance, other expenses like special assessment fees might pop up unexpectedly.
These are fees that frequently cover things like:
- Repairs to the property
- Property upgrades
- Other things the resort deems essential
Many timeshares are located close to a beaches and tropical areas, which make them more susceptible to natural disasters, and therefore more susceptible to additional special assessment fees. For example, you might be expected to pay the repair bill for damage to your timeshare property from an unexpected hurricane.
As with any type of major purchase, the decision to invest in a timeshare requires careful thought and consideration. It may involve up-front fees and recurring costs. You will want to be sure all your questions are answered and take your time with your decision.
