A timeshare is a way to share the costs of owning a vacation property. Instead of all owners having unlimited access to the property, each is allotted a certain time period when that property may be used or controlled by that person.
The idea for timeshares originated in Europe in the 1960s when a developer in the French Alps sold timeshares in a resort hotel. This increased the number of people staying at the resort, and gave people a pride of ownership in the facility. The success of this operation created imitators throughout the world.
The concept of timesharing has spread from vacation resorts to houses, campsites, boats, jets, and many other luxury items. There are many advantages to this system of ownership:
- Limits costs and expenses associated with ownership such as taxes and insurance.
- There are several people looking after the interest of the piece of property.
- Interest in the property can be bought or sold by the owner.
Thus a savvy timeshare owner could conceivably be able to vacation at very little expense considering the ultimate appreciation in the value of the timeshare property, and current expenses can be even less than what renting an equivalent property might be. In fact, a timeshare owner could even rent out his or her timeshare and conceivably make a profit.
In recent years many resorts have gone over to a timeshare system that uses a point system, allowing the owner to use accrued points (from ownership) for utilizing other properties around the world. Point systems have also been developed to give perks to owners such as reduced or free air-fare, restaurant meals, and amusement park tickets.
There are many types of timeshare ownership, all have advantages and disadvantages:
- Fixed Week Timeshares are the type that most people are familiar with. In this system the timeshare owner would control the property for a specific week during the year as defined by a contract.
- Rotating weeks are also a fixture of timeshare ownership. In this system, the week owned would move through a rotation so that coveted times would be shared among the group of owners.
- Floating weeks can also be owned, where the preferred time period is selected based on some agreed upon formula, allowing the owners a degree of flexibility in which they choose to exercise their rights as owners.
- Vacation clubs and points programs give even more flexibility. The club might own condos or timeshares in many locations, giving club members the option to go to any one of a number of locations and venues.
There are two types of ownership of which the prospective timeshare owner should be aware, deeded, and right of use. A deeded property is actual real estate that is owned. The advantage here is that the owner retains rights in perpetuity. However, there can also be disadvantages in regard to the property laws that are associated with the locale in which the property is situated. Right of use signifies that the owner has purchased the right to use the property for a certain period and that all rights of ownership revert back to the original owner after a certain period. Right of use allows timeshare owners to get around some of the property laws restricting foreign ownership in various locations. Yet it can also be a disadvantage in that the company through which the right of use is owned can fold and then the rights of the timeshare owner disappear.
Buyers should remember that timeshare ownership is a purchase on a par with buying real estate, so there are contractual duties incumbent upon them. Always read the fine print when looking into purchasing a timeshare.
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