You’ve likely heard of timeshares before. But you might be wondering what a timeshare is or even find yourself asking, “how does a timeshare work?”
Timeshares don’t always get the best reputation but that doesn’t necessarily mean that you should totally avoid them. By understanding more about timeshares, you can see if they are a smart investment for you and your family.
To put it simply, a timeshare is a resort unit where the owners get to spend a certain amount of time in every year for recreational purposes.
Are you interested in learning more? If you are, then keep on reading and we will take you through everything that you will want to know about timeshares!
What Is A Timeshare?
Before we can get into how timeshares work, it is important to know what they actually are. Also referred to as “vacation ownership,” a timeshare is a vacation or resort property that is split into fractional or shared ownership.
This ownership is typically divided into weekly increments. A lot of timeshares these days are operated by major corporations, like Disney, Marriott, and Wyndham.
These hospitality and hotel brands provide a travel club style of membership for owners. This provides customization and flexibility for people who are looking to go on vacation.
A timeshare lets owners have an increment at a time in which they are able to utilize their shared ownership. These increments tend to be one week in length but that can vary by resort and developer. Usually, you’re sharing a unit with other people but you are in control of the property for your assigned time.
There are several influential people out there who like to badmouth timeshares. However, there are also many satisfied timeshare owners who are very happy with their participation.
How Does a Timeshare Work?
Now that we’ve gone over what timeshares are, we can now go over how they actually work. If you own a timeshare or you’re looking to purchase one, you will need to become familiar with the different vacation ownership brands. This is because they all operate uniquely.
A standard way to use a timeshare is to own a specific week at the same time each year in the same unit. Traditionally, owners could travel to their timeshare unit during their specified week. However, there are a lot of other options when it comes to using timeshares.
Let’s look at all of this further in detail.
What Is a Timeshare Week?
When you rent or purchase a timeshare, you buy a certain amount of time at a given unit. Typically, that increment of time is one week.
Resorts will make their own unique calendars or schedules of weeks. Typically, weeks are given a number that begins at the first week of the year and goes through the final week of the year. These weeks tend to start with a check-in day on the weekend and varies by resort.
What Is a Floating Week?
Owners are able to reserve any week through the year on a first-come, first-served basis with a floating week system. Some floating weeks are limited by season. They can only be used during a certain span of time or season during the year.
For example, a timeshare owner can use their winter floating week during any week that falls within the resort’s winter days.
What Is a Lock-Off or Lockout Unit?
A timeshare lock-off, or lockout, is a timeshare unit that’s like an adjoined hotel room or condo. It can be split into two different sections.
The owner of these units then has the chance to rent them out together or separately. Essentially, this means that you can “lock the door” in between the rooms. It is good for privacy purposes if you’re traveling with other people.
What Are Timeshare Points and How Do They Work?
These days, people who own timeshares have this kind of timeshare system. This is when the week of ownership is converted into points. The points can be used as currency on all types of holidays.
Every year, owners get their yearly allotment of points. This allotment gives owners control and flexibility of where and when they book. They get access to resorts and hotels of all sizes, for different lengths of time, and during different seasons.
What Is a Biennial Timeshare?
Some timeshares provide yearly usage. However, there are also biennial timeshares. These offer usage to the owner every other year.
A “use year” will either be odd or even. This will depend on whether the year ends with an odd or even number.
Timeshare Deeded vs. Right to Use
Under a right-to-use system, an owner has the right to use their timeshare for a certain period of time. The usual amount of time that a lease lasts for is between thirty and 100 years.
The resort management team will hold the actual ownership of the hotel property. When the lease finally expires, the right to use will typically end and return to the management team.
A deeded property has the same rights of ownership accorded to it as any piece of real estate with a deed would. The owner will own the property in perpetuity. They might rent, sell, or give the property away.
Why Do People Buy Timeshares?
Timeshares offer a lot more than a standard stay a resort. The difference in space is already worth considering. Usually, a hotel room is just a bed, a tiny bathroom, and a small common space.
A timeshare is practically a home away from home. When you purchase a timeshare, you are getting a dedicated kitchen, big common spaces, private bedrooms, and maybe even a terrace or a balcony.
Timeshare resorts tend to have amenities and accommodations that are nicer than an Airbnb or a hotel. Timeshare owners also get to enjoy the savings that come with owning property.
With a timeshare, you’re paying for vacations in the future at today’s prices. Inflation concerns are very real and that means prices are likely to go up.
If you don’t use your vacation time then you can rent your week or points and cover your fees.
Another advantage to owning a timeshare is that they’re usually found in the most popular vacation areas in the world. The Disney Vacation Club has some of the nicest timeshare spaces in places like Orlando, CA.
Other brands, like Marriott and Wyndham, have timeshares located all over the world. A timeshare gives you the chance to go to places where you actually want to spend your holiday.
What You Need to Know Before Buying A Timeshare
You should never just sign up for the first timeshare that you come across. It is very important that you pick a brand that you are comfortable communicating with. If you are skeptical about timeshares, consider going with one that is operated by a major corporation that you can trust.
You also want to think about your travel lifestyle. For example, if you plan on raising a family, then you might be more interested in having a timeshare in a place like Orlando, FL than in Las Vegas, NV.
Safe And Responsible Exit From Timeshare
A timeshare isn’t an investment. You shouldn’t treat it like an investment property or standard piece of real estate.
When your lifestyle changes, or you’re no longer interested in vacation ownership, you might want to find a way out of the timeshare.
If you’re considering getting out of timeshare ownership, the first step is going to be contacting the developer or resort management team.
The ownership brand is going to guide you through several options when it comes to rescinding your ownership. They might also refer you to companies that can help you sell your timeshare. For example, there are companies that can help you with HGVC resale.
It is important that you understand your potential exit strategies before you sign up to own a timeshare.
The Importance of Knowing About Timeshares
Hopefully, after reading the above article, you now have a better idea of what timeshares are and you have the answer to the question, “how does a timeshare work?” As we can see, a timeshare can be a great purchase when you know what you’re getting into.
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