Everyone loves a vacation don’t they? Getting away is the perfect opportunity to enjoy a change of scene, relax, and recharge away from the hustle and bustle of daily life.
However, not everyone in America owns a second home or wants to vacation in a hotel. In fact, 9.9 million American households currently own timeshares. These provide the perfect way to get your hands on the vacation spot of your dreams at a fraction of the cost.
So what is a timeshare and how does owning one work? If you’re looking for a new vacation home, look no further!
Read on to find out everything you need to know about owning timeshares.
What is a Timeshare?
Timeshare properties became extremely popular during the 1970s in America and their popularity is still going strong. So what are timeshares?
You might also know this as vacation property ownership. Essentially, it is a lifetime financial commitment to a timeshare resort or collection of resorts. This means that you can guarantee a spot in your favorite timeshare resort each year.
You pay an upfront cost to secure your timeshare and then you pay maintenance fees on top of this. This gives you shared ownership of the timeshare.
This allows you to essentially buy access to a holiday property at a fraction of the price. This works because a number of people can put in to buy the same timeshare. Then each owner is allotted a certain amount of time in the property each year.
What is a Timeshare Resort?
Most timeshare properties are situated in timeshare resorts across the country. There are currently more than 7,400 resorts in America alone.
These resorts are a lot like traditional holiday resorts and allow you to enjoy access to similar holiday amenities. The resorts will handle the maintenance of each timeshare property, which comes out of your maintenance payments.
If you are unable to stay in your property at your allotted time, the resort may let you exchange your fees. Over the course of your contract, you may stay in different properties within the same resort. Most resorts will also let you upgrade more expensive properties if you want to in the future.
To understand how this works better, let’s take a look at different types of timeshare contracts. This outlines how much of your timeshare property you own and how you can organize a visit to it.
Types of Timeshare Contracts
Before you look at buying a timeshare from Hilton resale, you need to understand how these contracts work. There are two types of timeshare contracts.
Shared Deeded Contracts
Shared deeded contracts divide ownership of your property between you and anyone else who owns it. In these contracts, everyone receives a designated week or number of weeks during which they can use the property.
With a shared deeded contract you can transfer ownership by selling the contract. You can also gift or bequeath it to a person of your choosing.
Shared Leased or Right-to-Use Contracts
Shared leased or right-to-use contracts work in a very similar way to shared deeded contracts. They allow you to use a property for a set number of weeks every year.
However, these contracts do not give you ownership rights for the property. This means you cannot sell your share of the property or rent it out.
Instead, your contract will last for a certain number of years, like a normal property lease. Once this period is up, you have to renew the contract to continue using your timeshare property.
Different Timeshare Schedules
With numerous people sharing a property, it is important that this is shared evenly between everyone.
How your allocated time in a property is divided up will be outlined in your contract. You should discuss this before signing up for a timeshare.
There are three main ways that a timeshare schedule can be determined.
Fixed-week timetables stick to the original style of timeshare schedule. This allocates the same weeks in the same resort every year. Some resorts will even guarantee you the same unit each year.
This schedule offers less flexibility but that does mean you always have a guaranteed spot. You won’t end up competing with other holiday-makers for the same spot.
This also means that you can plan your travel arrangements, such as flights, very easily.
In the 1980s, the floating-week timeshare schedule became more popular. This offers more flexibility but also more competition to everyone who owns a timeshare.
Essentially, this system allows you to book in at your resort for a week at a time. This means that you can change when you vacation each year. However, it also means that your resort can get booked out very quickly at peak times of the year.
To avoid this, you can pay a little more to become a biennial owner. This means that you still hold onto a specific week in each annual calendar. This can be particularly handy if you want to travel during peak vacation times.
Point System Timeshares
The point system is a little more complicated but it can provide you with much more flexibility.
This system gives each timeshare holder a number of points once a year or once every two years. You decide how many points you want to buy upfront and this will determine the cost of your contract.
You can then use these points to book into a resort of your choosing.
Certain resorts, rooms, and dates will be more popular and will cost you more points. However, this also means that you can use your points sparingly to enjoy off-peak minibreaks instead.
The points system doesn’t provide the guarantee that the other two systems do. That said, it does offer a lot more flexibility.
How Much Does a Timeshare Cost?
A lot of factors can affect the upfront and long-term cost of a timeshare.
One of the biggest influencing factors is where you choose to buy your timeshare from. Buying a timeshare directly from a resort will almost always be more expensive.
In comparison, you can often buy from an existing owner at a fraction of the price. This is known as a resale purchase and can save you thousands of dollars.
However, you should always do your research before making a resale purchase. A lot of scammers use fake resale businesses to con people out of their hard-earned cash.
On top of this, resale buyers might not get all of the resort benefits that direct buyers do. So it is important to decide how much these benefits are worth to you before you buy a timeshare.
Additional Timeshare Costs
The upfront costs of timeshares are not the only things you need to consider. You will also be contractually obliged to pay a number of additional fees while you own a timeshare.
This includes annual maintenance fees for the property. On average, these cost around $1,000 but they can be more expensive for larger properties. These cover the cost of:
- Property insurance
- Property taxes
- Management fees and administration
- Resort landscaping and improvements
It is important to look closely at how a resort manages the costs of major repairs. For example, if there is storm damage and the resort cannot foot the bill, they may divide the remainder of this between the timeshare owners.
If you want to switch things up, most resorts will let you exchange your standard accommodation. However, they may also charge an exchange fee for this.
Canceling a Timeshare
Buying a timeshare is a serious commitment so it is important that you look into a company thoroughly before signing your contract.
That said, you usually have a cancelation period outlined in each contract. This is generally between three and ten days long. So if you do regret your decision, you should get in touch with your company as soon as possible.
If you do want to cancel your contract, make sure you follow all the guidelines for doing this. You should always cancel your contract in writing and send your letters using certified mail with return receipts.
Find the Timeshare of Your Dreams Today
Now you know the answer to the question ‘what is a timeshare?’ you can start hunting for yours today!
This is a great way to secure a holiday home at a fraction of the price. It also means that you are guaranteed somewhere to stay in your favorite vacation spot each year. So what are you waiting for?
For more great luxury travel inspiration, keep scrolling now!