If you’ve never heard of a timeshare, you’re not alone. Timeshares are becoming increasingly popular as more people travel and more resorts get built, but they’re not exactly mainstream just yet. But, if you ever find yourself in need of property to vacation in that isn’t your own, a timeshare rental might be a better option to consider.
A timeshare (or vacation ownership) gives you the freedom to enjoy the convenience of multiple vacations in multiple locations at the same time, without having to worry about the hassle of packing and unpacking every time you want to leave town.
But there are some things that can be off-putting when considering purchasing one—the price tag, the fact that you don’t own the land it’s on, and so on. This article explains everything you need to know about what exactly a timeshare is and if it’s right for you or not.
Different Timeshare Contract Types
There are numerous sorts of timeshare contracts to be aware of in addition to the various ways a timeshare operates. The location or brand of your resort may have an impact on the contract type you choose. Here are the various types of timeshare contracts:
International resorts, like those in Mexico, are where you’ll often locate RTU (Right to Use) contracts, sometimes known as RTU timeshares. This is due to the fact that an international owner is not permitted by law to possess property in a nation in which they do not now reside.
Owners of timeshares are given the “right to use” them under right-to-use agreements for a set period of time, after which the agreement or ownership expires. RTU contracts with terms ranging from 30 to 99 years are available.
The real ownership of the resort property is thereafter held by the resort management. The right to use usually expires and is given back to the hotel when the lease expires.
Timeshares with a Deed
A deeded week agreement divides the resort or unit equally among all owners. Each owner typically gets a set week (a fixed week) during which they can use their portion of the ownership. The same ownership rights apply to a deeded property as they do to any deeded real estate. The property is owned by the owner forever and may never be transferred to a third party.
Biannual and Triennial Timeshares
A biannual timeshare gives usage every other year, but some timeshares permit annual usage every year. Based on whether the year ends in an odd or even number, a “use year” is either even or odd.
Triennial contracts are another option, allowing you to exercise your ownership right every third year. These timeshares have the advantage of being less expensive to purchase and maintain.
Disney Vacation Club is a fantastic illustration of a leasehold timeshare. Every contract for a particular resort in a Disney Vacation Club timeshare has the same expiration year.
This is so that DVC can use the land to construct their resorts, which DVC “leases” from Disney Vacation Development. Because the owner no longer owns a portion of the resort when the contract expires, it is comparable to a right-to-use contract.
Checkout Top Las Vegas Timeshare Deals
How Do Timeshares Work?
If you already own a timeshare or are considering purchasing one, you should get to know your vacation ownership brand since they all operate differently.
In the past, timeshares provided owners with a week at their resort, which is usually fixed each year. The top vacation clubs and companies now use a points-based method that offers more freedom and flexibility.
Floating Week Timeshares
Over set weeks, floating week timeshares give owners a little more flexibility. An annual floating week enables owners to book any week based on first-come, first-served. Some floating weeks have season restrictions and can only be utilized at a certain time of year or season.
Owners, for instance, may use their floating summer week any week that lies within the resort’s summer season.
Fixed Week Timeshares
Families would purchase a one-week increment at a particular resort, and sometimes even a particular unit, they could use at that period each and every year when timeshare initially gained popularity in the United States. A fixed week timeshare has a constant week number. Weeks often have a number that runs from the first week of January until the final week of December. The weeks often start with a check-in date during the weekend depending on the developer or the resort.
One advantage of fixed-week timeshares is that you have a definite period each year and don’t need to make reservations in advance. Furthermore, if you have a “valuable” week available during a major holiday or high season, you can rent out your timeshare very cheaply.
If your timeshare is a floating week or points-based timeshare, you should pay close attention to the club’s seasons. Timeshare seasons are predetermined times of the year that distinguish popular peak and low times. Every brand has a unique naming scheme, like “Gold,” “Red,” or “Silver.” If your season is really popular, you might only be able to utilize your floating week during that season, so you may need to reserve your dates in advance.
The points-based timeshare is currently the most common type of timeshare ownership. A number of holiday clubs provide various points-based timeshares. In the case of WorldMark by Wyndham, you can purchase a certain number of points that can be utilized at any WorldMark resort by purchasing a pure-point membership.
Some clubs, however, allow owners to exchange their fixed week for points for more flexibility. In this situation, factors such as the popularity of your “Home” resort, the size of your unit, the time of year, and more affect the number of points you earn each year.
Owners get their annual allotment of points each year. Owners have flexibility and control over where and when they book thanks to this allocation, which also offers them access to resorts and hotels of all sizes, throughout the year, for various lengths of time.
Benefits and Drawbacks of Timeshares
Timeshares have certain benefits for people looking for a vacation destination that is trustworthy and handy, even though they are not for everyone. Investors should take into account a few clear drawbacks before signing a timeshare contract, though.
Large firms in popular holiday spots typically own timeshares. Owners of timeshares can take comfort in knowing they get to vacation in a familiar place each year without worrying about unpleasant surprises.
Timeshare properties are frequently managed by professionals and offer resort-style amenities and services. A timeshare property is often substantially larger and offers many more facilities than a typical hotel room, making for a more comfortable stay.
Thus, timeshares may be appropriate for people who appreciate taking annual vacations in a familiar location without the stress of planning their upcoming trip in advance.
Timeshare disadvantages include the fact that after accounting for the sizeable down payment and yearly maintenance fees, which often increase based on a percentage yearly, the overall expenditures can be large.
The owner of a deeded timeshare is also responsible for paying a proportionate portion of the monthly mortgage. As a result, compared to booking a week at a comparable hotel or resort in the same area without owning a timeshare, the total cost of owning a timeshare can be fairly expensive.
The ability to modify a fixed week timeshare is likewise limited; a floating week must be secured far in advance because confirmation is typically given based on first-come, first-served, and even then, it may not be available during the busiest seasons of the year. Additionally, a timeshare contract is legally binding, thus the owner cannot just break it because their personal or financial situation has changed.
If the contract permits resale in the first place, it is famously difficult to sell a timeshare, and the lack of liquidity may put off potential investors. Due to two factors, a timeshare selling may bring in a significantly lower sum than the purchase price. Due to the high number of timeshare owners wishing to break their contracts, there is an imbalance in supply and demand for timeshares, which causes them to depreciate quickly.
Pros and Cons of Timeshares
- Amenities and services akin to resorts
- Saves time by not having to plan a new vacation every year.
- Annually the same place, with no nasty surprises
- Limited flexibility when modifying the contract or the weeks
- Timeshares are challenging to sell
- Ongoing expenses may be high.
- Harsh marketing techniques.
Difference Between Timeshares, Hotels, and Airbnb
Timeshares, as we’ve already mentioned, provide more room and conveniences than the average hotel room. Less than 400 square feet is the typical size of a hotel room. You can tell the difference by comparing it to the typical timeshare unit size, which is usually up to 1,030 sq. ft.
Families may spread out and enjoy their privacy while on vacation thanks to the added room. Additionally, timeshares come with fully functional kitchens, allowing you to cook in your villa after purchasing supplies nearby. Most timeshares also include washers and dryers, providing you with the utmost comfort while visiting.
Given that they can provide you with some similar advantages as homes, you may be thinking about remaining with Airbnbs. But timeshare properties provide more than just roomy accommodations.
There are restaurants, lazy rivers, golf courses, and even waterparks on-site at resorts like Orlando’s Orange Lake Resort. You are really just paying for the space unless your Airbnb is in a large neighborhood or provides these services. Not to add, you won’t get the same levels of customer service, such as security or a concierge.
How Can You Rent a Timeshare?
When the owner of a timeshare decides they won’t be using the unit for a certain amount of time, the unit usually becomes available for rent. There are websites like Timeshare Users Group, Trip Advisor, and Redweek that feature a variety of timeshares that are available for rent.
You can use the search bar to look for a rental by area, dates, size, and cost. Additionally, there are websites dedicated to renting timeshares from Hilton, Disney, and Hyatt. Renting a timeshare might be a fantastic way to give yourself another alternative when planning a holiday or to test one out before you buy.
How Can You Break a Timeshare Agreement?
There are typically three ways to cancel your timeshare, depending on the terms in your contract. The first is to sell your timeshare to someone else, albeit if you purchased your timeshare brand-new, this is almost certain to result in a financial loss. The second is to attempt to come out of the contract through negotiation with the timeshare provider, but there might be fees and costs involved.
Finally, if you are still in your contract during the “cooling-off” or rescission period, you may be able to cancel it without incurring any fees. To review the terms of your contract, you might have to hire a timeshare attorney. In the event that all else fails, you might consider giving your timeshare to a relative or friend who is willing to pay the recurring maintenance fees.
How Can You Sell a Timeshare?
There are now many websites where you can list your timeshare if you own one and are looking to sell it. A timeshare broker may be able to assist you in finding a new buyer. As previously stated, a timeshare’s selling price is usually always substantially less than the original purchase price.
How can You determine the value of my timeshare?
Values for timeshares will vary depending on a number of elements, including size and facilities, location, and how simple it is to switch or trade your location for others. The worth of your timeshare is then estimated by contrasting the costs of comparable timeshares that are being posted for sale and rental on different internet marketplaces.
Now that you know what a timeshare is, how it works, and the pros and cons of owning one, you can make an informed decision about whether or not it’s right for you. If you think a timeshare might be a good fit, be sure to do your research and ask lots of questions before making any commitments. Reading this lengthy article is a great start!