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Timeshare 101

This is an overview of Timeshare and Vacation Ownership. It should give you a better understanding of this kind of vacation tool, and whether it’s right for you. Some of the words and phrases in the overview will be linked to our Glossary to provide you with definitions for common timeshare terms you might not be familiar with. If you have questions that this overview doesn’t answer, try our Help section. If you can’t find your answers there, please go to our Contact Us page for information on how to reach us by phone, email, or mail.

 

Timeshare and Vacation Ownership Information

Vacation Ownership offers consumers the opportunity to own fully-furnished vacation accommodations sold in a variety of forms, such as weekly intervals and Points-based systems, for only a percentage of the cost of full ownership. For a one-time purchase price and payment of a yearly maintenance fees, purchasers own their vacation either in perpetuity or for a predetermined number of years. Owners share both the use and the cost of upkeep of their unit and the common grounds of the resort property. Vacation ownership purchases are typically financed by consumer loans of five to ten years, with terms dependent upon the purchase price and the amount of the buyer's down payment.

 

The Advantages of Timeshare and Vacation Ownership

Unlike a hotel room or rental cottage, which require payment for each use with rates that usually increase each year, ownership at a timeshare property enables vacationers to enjoy a resort, year after year, for the lifetime of their ownership with only a one-time purchase price and payment of yearly maintenance fees. Timeshare ownership offers vacationers an opportunity to save on the escalating cost of vacation accommodations over the long term while enjoying all the comforts of home in a resort setting. Truly a home away from home, vacation ownership provides the space and flexibility to suit the needs of any size family or group. While most vacation ownership condominiums have two bedrooms and two baths, unit sizes range from studios to 3 or more bedrooms. Unlike hotel rooms, there are no charges for additional guests. Also, unlike hotels, most units include a fully-equipped kitchen with dining area, washer and dryer, linens, stereo, televisions, DVD players, and more. Timeshare resort amenities rival those of other top-rated resort properties and may include swimming pools, tennis, Jacuzzi, golf, bicycles, and exercise facilities. Others feature boating, ski lifts, restaurants, and horseback riding. Most timeshare resorts offer a full schedule of on-site activities, such as sporting, recreational, and social events for adults and children. The resorts are staffed with well-trained hospitality professionals, with many resorts offering concierge services for assistance with visiting area attractions.

 

How Timeshare and Vacation Ownership Works

Each condominium, or unit, of a vacation ownership resort or timeshare, is divided into intervals, either by the week or points equivalent, which is sold separately. The condominiums are priced according to a variety of factors, including the size of the unit, resort amenities, location, and season. With a timeshare, owning your vacation is considered a major benefit. Once a majority or other pre-set percentage is sold to vacation owners, the management of the resort is usually turned over to a
Resort Property Owners Association (POA) or Homeowners Association (HOA). The vacation owners, in turn, elect officers and take control of expenses, upkeep, and the future of their resort property, including the selection of a management company.

 

What Are Yearly Maintenance Fees?

Yearly maintenance fees are fees paid each year to an HOA for the maintenance of the resort. Just like taking care of a home, resort maintenance fees help maintain the quality and future value of the resort property. In a vacation ownership resort, maintenance costs are shared by all owners. They pay for on-site management, unit upkeep and refurbishing, utilities, and maintenance of the resort's common areas and amenities, such as pools, tennis courts, and golf courses. Just like residential condominium owners, after management has been turned over to vacation owners, they determine the fees through their HOA Board of Directors. The amount of the yearly maintenance fee typically depends on the size, location, and amenities of the resort. Maintenance fees are assessed and paid annually by each vacation owner.

 

There are a Variety of Timeshare or Vacation Ownership Products and Usage Plans

Today, there are several types of timeshare programs from which to choose, enabling consumers to purchase the type of vacation ownership that best matches their needs and lifestyle.

Timesharing or Vacation Ownership is a term that describes a method of use and ownership. It denotes the exclusive use of accommodations for a particular number of days each year. Usually sold by the week, it is also called interval or Vacation Ownership. The purchase of a timeshare interval can take various legal forms. Under a fixed-unit,fixed-week deeded agreement, the purchaser receives a deed allowing the use of a specific condominium at a particular time every year, forever, just like buying a house. Benefits may include the tax advantages of ownership, plus a voice in the management of the resort. Under this agreement, the owner may rent, sell, exchange, or bequeath the vacation interval.

Under a right-to-use plan, ownership of the resort remains with the developer. The purchaser reserves the right-to-use one or more resort accommodations for a specified number of years, ranging generally from 10 to 50 years, after which all rights return to the developer. These plans come in a variety of forms, most commonly known as club memberships. Vacation intervals are sold as either fixed or floating time. With fixed time, the unit, or unit type, is purchased for a specific week during the year. That week is reserved for the owner every year, subject to cancellation if the vacation owner does not plan to use it in a given year. Floating time refers to the use of vacation accommodations usually within a certain season of the year. The owner must reserve his or her desired vacation time in advance, with a reservation confirmation typically provided on a first-come, first served basis. The purchaser may also receive a deed under a floating arrangement. Within floating time, price differences are based on demand within each season.

Vacation clubs or point-based programs provide the flexible use of accommodations in multiple resort locations. With these products, club members purchase points that represent either a travel and use membership, or a deeded real estate product. These points are then used as currency to access the various size accommodations, season, and a number of days at the participating resort. The number of points needed to access the resort accommodations will vary by the members' demand for unit size, season, resort location, and amenities. A vacation club may have a specific term of ownership or be deeded in perpetuity.

Fractional ownership enables consumers to purchase a large share of a vacation ownership unit usually from 5 to 26 weeks. This type of ownership is popular in ski, beach, and island resort areas.

"Lock-off " or "Lock-out " units allow vacation owners to occupy a portion of the unit and offer the remaining space for rental or exchange. The units typically consist of two bedrooms and two baths, or three bedrooms and three baths.

Split weeks are popular with consumers who prefer shorter vacations, as the owner may split the use of the interval into two separate visits to the resort, such as one 3-night and one 4-night stay at two different times of the year. Reservations are usually granted on a first-come, first-serve basis, and are based on availability.

Biennial Ownership, or alternate year ownership, allows the use of a resort ownership product every other year and cost less than annual ownership at comparable resorts.

 

Seeing the World through Exchange Vacations

Vacation Ownership offers unparalleled flexibility and the opportunity for affordable worldwide travel through vacation ownership exchange. Through the
international vacation exchange networks, owners can trade their timeshare interval for vacation time at comparable resorts around the world.

 

How vacation or timeshare exchange works

Most resorts are affiliated with an exchange company that administers the exchange service for its members. The two most popular are RCI or II. Typically, the exchange company will directly solicit annual membership. Owners individually elect to become members of the affiliated exchange company. To exchange, the owner places his or her interval into the exchange company's pool of resorts and weeks available for exchange, and in turn, chooses an available resort and week from that pool. The exchange companies charge an exchange fee, in addition to an
annual membership fee, to complete an exchange.  Exchange companies and resorts frequently offer their members the additional benefit of saving or banking vacation time in a reserve program for use in a different year.

 

Important Vacation Ownership or Timeshare Purchasing Tips

A Vacation Ownership or Timeshare purchase is a significant commitment, not only financially, but also in terms of future vacations. You should be sure that the resort or club in which you purchase an interest will provide many pleasant vacations for years to come, and can evolve with your lifestyle. Here are some important tips to consider when making a purchase.

 

Buy to Use:

Buy because you plan to use the vacation ownership product in the future. Consider your vacation ownership purchase as an investment for future vacations, not in terms of an investment for financial profit.

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Choose a vacation that fits your lifestyle:

Think carefully about what you value most in a vacation and travel experience, then explore the wide variety of vacation ownership products and options available and choose those which best suit your needs. In addition to visiting a resort and talking to industry professionals, a friend or relative who owns a timeshare may be a great resource as you gather information about the timeshare experience.

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Visit a Timeshare resort on your next Vacation:

Take a tour of a local resort. While there, talk to existing owners about their ownership experiences at the resort. Many resorts offer mini-vacations which provide opportunities to experience the resort first-hand.

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Look for signs of good management:

Look for things such as well-maintained facilities and resort amenities, good housekeeping, and friendly service.

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Verify the resort is in an Exchange Company:

Check to see who the resort affiliation is with and learn about the resort's exchange policies and member benefits.

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If you are primarily purchasing for exchange benefits:

Provided you are looking to only use the Villa purchased for trade, buy the largest unit in the most popular season, or largest points package you can afford, as this will provide greater exchange potential.

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How to Buy a Timeshare or Vacation Ownership!

It’s simple! Go to our Buyers section and search the available listings. Be sure to look at the For Rent as well as For Sale properties if you’re interested in visiting a resort before buying at it. Once you find a unit you’re interested in, simply click on the Make Offer link and we’ll present your offer to the seller. If you can’t find a unit at the resort of your choice, just email us and let us see what we can find for you.

 

Important Facts About Vacation Ownership:

• There are approximately 4,150 vacation ownership resorts located in 81 countries, with 65% of the resorts found in 6 countries.

• An estimated 3,150,000 households worldwide now own a vacation interval, with owners residing in 174 countries.

• The U.S. is the leader in the global vacation ownership resort market, with 1,546, or 37.3%, of the resorts, 1.7 million vacation owners, and nearly 125,000 new buyers each year.

• With 384,000 new owners purchasing 560,000 vacation intervals, and gross Sales of $4.76 billion, 1994 proved a record year for the industry.

• While on a timeshare vacation, the average visitor party stays 11.6 nights. During the stay, the party spends an average of $1,900 of direct consumer expenditures and another $1,160 on travel expenditures.

• Timeshare owners will return to their home resort an average of 5.5 times during the next 10 years, as compared with an average of just 2.7 times if they had not purchased the timeshare.

• Florida is the single-most preferred state by Americans for a recreational property purchase. The next 5 most preferred states are California, Colorado, North Carolina, Texas, and Arizona, in that order.

• As of 1995, 60.3 % of U.S. households now feel they have a chance of purchasing recreational property within the next 10 years.

• Most important among the motivational benefits cited by U.S. owners in their decision to purchase vacations were the high standards of the resorts at which they own and exchange, followed by the flexibility offered through vacation exchange opportunities, and the value of vacation ownership.

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