What Is A Timeshare?
What Is A Timeshare? A Complete Guide
A timeshare, often known as vacation ownership, is a lifetime commitment to pay for yearly visits to the same resort or family of resorts. You prepay for a set amount of money plus annual maintenance expenses. If you want to go somewhere different than the place you booked, there may be additional costs. If you plan on camping for more than one night, expect to pay an extra fee per night. You must factor in both upgrade and change expenses if you wish to stay somewhere else than the site from which you initially paid. Let's find out what a timeshare is and what you need to know before buying one.
How Do Timeshares Work?
There are two distinct sorts of timeshare contracts accessible, each of which will specify who owns the property and how it is utilized to allow you access to your timeshare.
Deeded Contract with Shared Ownership
You and all the other owners of the timeshare enter into a shared deeded timeshare contract. Every person is assigned a specific week or set of weeks to use it. You have the right to sell, gift, or bequeath a share in a deeded contract.
Right-to-use Contract or Shared Leased
A shared leased or right-to-use agreement divides the use of a facility among all those who pay for the timeshare. The contract gives you the permission to use the timeshare for a specific number of years. It does not give you the right to sell or rent your timeshare, nor does it give you any property rights.
According to the American Resort Development Association (ARDA), the timeshare business began in the mid-1970s as a method of getting rid of surplus condominiums. The variety of timeshare models has changed over the course of time because of this market.
Timeshare with a fixed number of weeks
Fixed-week timeshares are the original timeshare. Every year, you'll have a certain date and place (and sometimes even a specific unit) according to your contract. This kind of timeshare is ideal for individuals that appreciate order and routine. A fixed-week timeshare eliminates the wait for your desired date or location since you won't have to wait with other vacationers.
Timeshare with a floating week
The first type of timeshare was designed in the early 1980s in order to give timeshare owners more alternatives. It allows users to utilize their timeshares for a week during a specific season or at any other time of year. However, desirable weeks may be more difficult to reserve under this method.
It's feasible to be a biennial timeshare owner, which means you own a week that you only use every other year.
The point system was introduced in the mid-1970s and allows timeshare owners to earn or save points each year, which they can exchange for stays at certain properties every other year. The number of timeshare points you'll need to book a stay at a particular resort, based on the location, size of your room, and dates of your visit are determined by the rate card. Whatever is in higher demand will cost you more points.
You'll pay a certain number of points upfront based on how many you believe you'll use each year. The cost of each point varies depending on the timeshare company, so the more points you purchase and where you get them, the higher your costs will be.
What is the cost of a timeshare?
This is a difficult question to answer because it's highly subjective. In other words, there are no definitive answers or rules. Let's dive into some more insight below.
The ARDA claims that the typical sales price for a one-week timeshare was $22,942 in 2019. A majority of timeshare owners, however, have spent less than $10,000 on their timeshare. As a result, the cost of a timeshare might differ. Of course, the owners surveyed owned their timeshares for various years. Financing the purchase will increase the price considerably.
Because consumers get weary of their vacation choices or the continuing fees, they are eager to sell their timeshare for a low price. If you buy a timeshare for $1, you can potentially save $10,000 or more. So, what's the catch?
To begin with, you must be very cautious about who you buy from and whether the ownership passes to you. The timeshare industry is a major money-making operation.
Second, you must understand the usage limitations that the resort places on resale purchasers. You may not receive all of the same perks as a timeshare owner who purchases directly; nevertheless, the money saved might be worth it.
Annual fees, also known as maintenance costs, homeowner association (HOA) charges, or dues, are incurred by timeshare owners. Room charges, common area and grounds upkeep, property taxes, property insurance, and management are all charged.
According to ARDA, typical maintenance expenses for timeshare properties in 2018 were $1,000 per year. They have risen by 5% each year, on average, over the last decade, which is roughly twice as fast as inflation. Studios are charged the lowest fees and three-bedroom apartments are charged the most.
You could be liable for unusual one-time fees, in addition to traditional yearly dues. If the resort incurs an unusually large facility cost (for example, as a result of a hurricane or flood), it won't have the reserves to pay for it from the owners' yearly dues, so it will distribute that expense among all owners based on an equitable
Covid-19 has caused some timeshare owners to get a greater assessment or price increase for their yearly charges.
Timeshare Exchange Fees
If you want to exchange your regular timeshare for something else, such as a different location or type of vacation (for example, in an RV instead of a condo), you may be charged an additional fee.
Right to Cancel
If you change your mind and wish to cancel a timeshare, you have three to ten days after purchase to exercise your right of rescission. The number of days differs by state. Consumer Reports suggests writing and sending your letter via certified mail with a return receipt in order to guarantee that it arrives.
If you didn't check before purchasing, you should do so during this period: any lawsuits filed against the timeshare company. A red light should go up if the firm appears to be deceptive, defrauding timeshare owners, or has financial difficulties.
Pros and Cons of Timeshares
- According to the timeshare you purchase, you may be assured of returning home each year.
- When you buy points-based timeshares, you have the option to save or borrow points as needed.
- If you don't want to go home every year, you may be able to visit partner resorts.
- Resort facilities such as spacious rooms, luxury swimming pools, in-room laundry, and fully-equipped kitchens are often available through property management companies. The majority of timeshare apartments (more than 60%) are two-bedroom units with a size of 1,140 square feet.
- You may save money on your vacation renting by buying a timeshare with no traditional timeshares, where you stay in the same unit every visit. You'll enjoy many of the advantages of owning a vacation home without having to deal with as many responsibilities (but also less control over the property).
- While on your timeshare, you may save money on attractions, dining, and shopping.
- You aren't always guaranteed a specific date at your home resort every year, and the choice dates tend to fill up fast.
- If you're thinking about visiting a timeshare property in the near future, you may want to check out our guide on how much it costs to use your timeshare. You may discover that you've bought too many or too few points to take your ideal annual vacation.
- During the sales process, it's difficult to understand how much a timeshare costs and what you'll get for your money.
- It's tough to sell shareholdings in the current market.
- Maintenance costs typically increase each year.
- If you have to reschedule your timeshare vacation and you can't rebook within a year, you'll lose money.
How to Get Rid of a Timeshare
Here are four options for selling a timeshare that you should think about. Learn which choices are realistic and what to be wary of.
For a complete guide on how to get out of your timeshare check this out: https://www.sfweekly.com/sponsored/how-to-get-out-of-a-timeshare/
Get the Timeshare Company to Take It Back on Your Terms
The majority of timeshare providers want you to contact them directly in order to leave your timeshare. The Coalition for Responsible Exit, an affiliate of ARDA, has links to a website on each major timeshare resort developer's site with information on how to leave your timeshare. If you want to find a home by name, there's also a search option.
There's a good chance your timeshare company will try and persuade you to stay by providing you with different alternatives, such as transferring down a points tier that will cost less, taking advantage of a timeshare exchange program, or banking points for a subsequent year.
You can also exit your timeshare through Wyndham's official exit website. According to the site, there are several ways to get out of your timeshare:
- Getting rid of your duty as soon as possible and returning their property in as few as 60 days
- You can free yourself from your lease and enjoy three more years of paid vacations with no maintenance fee.
- With their assistance, you may sell your timeshare.
- For free, you may transfer your ownership to a close family member.
If you transfer your timeshare to a family member or someone else, they must be willing to pay the annual dues.
Renting It Out
Renting out your timeshare may help you get rid of some of the costs associated with timeshare ownership, although it isn't technically a method to get rid of your timeshare. You may be able to rent your timeshare through the timeshare resort company that owns it or a third-party rental firm. Expect to pay a fee for the use of the rental service. Rental rules differ by the developer.
Hire Someone to Help You Get Out of It
The Timeshare Exit Team claims to be able to assist owners in leaving their timeshares. The price may be several thousand dollars, and the process might take years, according to their website.
Timeshares may seem to be good while you are in the presentation but beware of everything that's involved and the long-term commitment. Timeshares are not easy to get out of and may end up costing you frustration for years to come.