If you’re like most people, you’ve gotten mail invites offering great prizes in return for sitting through a timeshare presentation. Maybe you’ve even gotten invited into a sales pitch when you were walking down the street in a tourist area.
These one-off encounters may have left you wondering, “How does a timeshare work, anyway?” Timeshares may not be new to the spectrum of vacation properties, but the high-pressure sales tactics have left them with a confusing reputation. You can be forgiven for not understanding what these opportunities really offer!
Let’s take a look at what you’re buying when you purchase a timeshare, plus how they work and where to buy them.
What Is a Timeshare?
A timeshare is a type of resort or vacation property. However, unlike other vacation properties you own outright, you won’t have year-round access to your timeshare.
As the name suggests, you’ll share ownership of the property with other owners by using the property at a specific time you agree upon, usually a single week out of every year.
Though timeshares have gotten a bad rep over the years, purchasing a timeshare through a reputable company can help you avoid the hassles of less-than-savory organizations. Many of the best timeshares are bought and sold via major hotel companies like Marriott or entertainment companies like Disney. Some offer only basic benefits, while others provide a spectrum of hospitality services and customization options.
How Does a Timeshare Work?
As mentioned above, you “own” your timeshare for a short period of every year, often one week.
Sometimes, you’ll have the ability to select the week you prefer either on a first-come, first-served or according to the resort’s point system. With other timeshares, the resort in question may assign you a specific “fixed week.” In some cases, you may even be able to get an every-other-year (EOY) ownership to space out your vacations.
However, beyond these basics, each resort does things a little differently, so you’ll find that scheduling options vary from place to place.
Once the details of scheduling are finished, of course, you’re set for a guaranteed high-quality vacation each year! Because you’re paying up front, you won’t have to worry about being able to afford a vacation you love: you’ve already invested in your future. Plus, with flexible vacation club programs, properties around the world, and plenty of features and resort amenities, you’ll be packing a great deal of value into every trip.
Types of Timeshares
As you start researching timeshares to buy, you may come across different types of timeshares up for grabs. Here are the basics of what you can expect from the two most common kinds:
Shared Deeded Timeshares
With a deeded timeshare, you own a small percentage of the unit in question. Ownership is divided between all of the people who have purchased time with the timeshare.
As you might expect, with a deeded timeshare you’ll receive a deed that explains your rights as an owner. From a legal standpoint, your timeshare is your property, meaning that you can rent it, share it, sell it, or transfer it just as you would any other type of real estate investment.
Right-to-Use Timeshare
With a right-to-use timeshare, also known as a shared leased timeshare, you won’t own the property outright. Instead, you’ll be paying for—as the name suggests—the right to use the timeshare during a specific period of the year. This option is more like pre-paying for a hotel room than buying a property.
Cost of a Timeshare
The cost of a timeshare can vary wildly, just like traditional real estate varies. Factors like the condition and size of the unit, the location of the property, and the features and amenities on hand can affect the selling price.
The average timeshare will run you anywhere from $10,000 to $25,000. This cost must be paid up front. Beyond this, you’ll also need to factor in the annual maintenance fees, which can cost anywhere from $600-$1,000.
It’s worth noting, of course, that you can find special deals and opportunities with timeshares just as you would any other type of property. Taking extra time to do your research online can help you score lower prices than you would by jumping into a timeshare sales pitch and buying the first one offered.
Notably, the secondary market—or the resale market of people selling their timeshares—can offer great discounts over the full-priced alternative.
How to Buy a Timeshare
Knowing where to buy a timeshare is critical if you want to get the best deals. First things first: reputable companies won’t force you to sit through the salesy, high-pressure pitches that have made these properties infamous. Instead, it’s easier than ever to take care of the entire transaction online.
Of course, you’ll need to consider your long-term vacation plans and preferences as you make the decision. If you enjoy seeing new destinations on every trip, for example, buying with a vacation club or timeshare points company can allow you opportunities to change up your travel.
If you’re looking for an affordable price on a great vacation, on the other hand, searching the secondary market may be the way to go. Searching sites that offer reputable access to the resale market can help you find great bargains on world-class vacation options, sometimes at 10-50% below the original price. From a Disney Animal Kingdom DVC to beachfront options in major resort cities, you’ll find plenty of opportunities online.
Note, of course, that if you’re not sure whether you’d like to buy a timeshare, you can always rent one first to see if it’s what you want!
Start Searching for the Perfect Timeshare Today
Now that you’ve stopped wondering, “How does a timeshare work, anyway?” it’s time to do some research and find the perfect option for your needs! Knowing the fundamentals above can help you navigate the market as you sort out the opportunities, so be sure to consider the types and sources above as you go. With a little effort, you’ll be enjoying pre-planned vacations for years to come!
Want more tips to help you make the most of your money? Check out our other insightful guides for additional advice.