What Are the Different Types of Timeshare Ownerships That Exist Today?
Unlike other areas of the vacation industry, the $23,652 million timeshare sector is experiencing a boom. What’s more, forecasters predict that timeshare ownerships will grow by around 7% every year until 2025.
One of the reasons for this upswing in timeshares is the belief that self-catering accommodation offers a safer alternative to hotel stays at the moment.
It’s also a cost-effective way to vacation if you can afford the initial costs associated with a timeshare.
Are you curious about how timeshare works and which type of timeshare might suit you? Keep reading to find out more.
- 1 What Is a Timeshare?
- 2 The Main Types of Timeshare Ownerships
- 3 Timeshare Sub-Types
- 4 Where Do You Buy Timeshares?
- 5 What Are the Benefits of Owning a Timeshare?
- 6 Tread Carefully With Timeshare
Initially, timeshare ownership was as simple as can be, but it’s got a little more complicated in an attempt to satisfy the increasingly flexible needs of the smart traveler.
When timeshare started, there was only one kind of ownership. This involved purchasing the right to occupy a fixed week every year at a particular resort.
You paid a large initial fee for this lifetime of occupation, plus annual fees to cover the ongoing operational costs of your family getaway.
Nowadays, you can choose from a variety of options when it comes to timeshare ownership. The payment arrangements are still basically the same, although the cost of your weekly vacation may vary.
There are three major choices when it comes to timeshare. These are:
When you buy a deeded week, you get a deed for your week, like you would if you bought a home. These were the original timeshare contracts.
It’s relatively easy to transfer a deeded week into someone else’s name, so you can gift or sell these weeks to a willing recipient.
You can also rent out these types of timeshare weeks. Most timeshare companies have moved away from this kind of contract in favor of more flexible, modern-day vacation products.
You don’t get a deed to the property when you sign up for this type of timeshare. Instead, you commit to a contract that allows you to access vacations for many years.
This time frame might stipulate anything from 30 to 99 years. You can still sell this right-to-use agreement on the resale market and rent it out too.
Many of these agreements operate in perpetuity, so you’ll need to pass it on to an heir.
Leasehold timeshares have an expiry date, although you’ll get all the same benefits as owners of other timeshare options until the lease expires.
They’re the same as right-to-use contracts, except there’s no option for eternal ownership.
Within the main types of timeshare agreements, you’ll also find a choice of vacation options and ownerships to suit your needs.
Some timeshare concepts feature aspects of the other subtypes, that offer even greater flexibility. These are your main choices when it comes to signing a timeshare contract:
These deeded ownerships offer traditional usage, i.e. you can enjoy your resort getaway at a fixed time every year.
It’s easy to see how this concept became jaded after people spent many years at the same destination. This led to the concept of exchanging timeshares with owners at other resorts during different times of the year.
Most fixed week owners sign up with RCI, which involves paying an annual membership fee and a small additional fee whenever you exchange your week for an alternative.
When you exchange via RCI, you give them the right to add your week to their pool of availability. In return, you get to choose another week of similar value from this pool.
It’s a simple concept that worked well for many years, and ultimately spawned the concept of points vacation clubs.
Biennial timeshares allow the owner to occupy their week every other year. You usually buy the occupation rights to either an even-numbered, or odd-numbered year.
This product suits those who didn’t want to commit to vacationing at the same place every year or those in search of a cheaper option.
Floating weeks offer a type of flexible ownership that allowed vacationers to occupy their week during a particular season.
So, these owners could occupy their week at any time during the low or mid-season, subject to availability. These timeshares are either deeded or right-to-use types of arrangements.
Fractional ownership isn’t strictly timeshare, but it’s almost the same concept. When you buy fractional ownership in a resort accommodation unit, you can occupy it for a longer timeframe.
This type of ownership often involves high-end properties like luxury condos or sophisticated houses on golf resorts.
So, you might have occupation rights to as many as 13 weeks a year. You can usually stagger your bookings across similar seasons, or book the entire block and rent out the unused portion.
Points-based timeshares offer the greatest flexibility of all vacation products. When you sign up for these, you purchase a number of points at a specific resort.
Each week in the resort portfolio has a points value, and you use your points to book vacations either at your home resort, or any other resort. You can use your points all at once, save them for up to two years, split up your bookings, or borrow points from the following year.
Once you’ve booked your week’s vacation, you can also exchange it with RCI if you want to enjoy vacationing at international destinations, or a resort outside your club’s offering. Likewise, you can rent your booking out to a third party, either independently or via a broker.
Most people buy their timeshare direct from a developer after attending a live sales presentation at a resort. You can also purchase all these types of timeshares via resale companies, usually at vastly reduced prices.
According to the ARDA, the average cost of a timeshare week is currently $22,492. When you buy a resale week, you could pay as little as $1 for it.
That’s because many people discover they can’t afford the ongoing cost of owning a vacation product. So, they sell it for next to nothing to escape the financial commitment.
A simple online search for the product of your choice, like ‘DVC resales’, ‘Hilton resale listings‘, or ‘Marriott timeshare resales’, will reveal abundant options.
Although the timeshare concept developed a bad name at one stage, the basic concept is a legitimate one. Any problems resulted from unscrupulous operators looking to make a fast buck.
Nowadays, watchdog organizations like the ARDA, keep tabs on the industry to ensure everything’s above board, so members and owners can benefit from this vacation choice.
Some reasons people buy timeshares include:
Reputable timeshare organizations have high standards when it comes to the accommodation they offer. So, you can look forward to consistently good-quality apartments and condos wherever you choose to go.
Many resorts offer comprehensive onsite facilities to add to your enjoyment, too. These include pools, spas, games rooms, and organized activity programs.
When you stay in timeshare accommodation, you can also look forward to considerable savings during your stay. Almost all timeshare weeks come with free onsite parking and full kitchens with a washer and dryer.
This means you’ll save by cooking your meals as well as on laundry bills while you’re in residence.
Try Before You Buy
Since many timeshare owners offer their units for rental. So, you can experience what it’s like to vacation in a timeshare resort before you commit to a contract.
Some resorts offer direct rentals, too, but you’ll find that it’s more affordable to rent your accommodation from a broker or privately from an owner.
If you enjoy what timeshare has to offer, you can attend a presentation while in residence. This helps you figure out your budget and find out more before you make up your mind.
You aren’t compelled to buy anything when you attend one of these meetings. So, you can think about your decision for as long as you want, or opt for a resale week.
With so many timeshare ownerships to choose from, you’re bound to find one that suits your holiday needs. Yet, the most important thing to remember about timeshare is the expense.
The overall cost of buying a timeshare is akin to that of a second home, or holiday home, without the hassles of maintaining it yourself.
You should also keep in mind that timeshare contracts are lengthy agreements, and annual fees increase in line with inflation. It’s vital to do the math before committing to a lifetime of financial duress.
Although you’ll save on the upfront fees when you buy a timeshare on the resale market, it’s important to keep these ongoing costs in mind.
Would you like to explore alternatives? Browse our blog for more of the best real estate and lifestyle tips.