How Do Timeshares Work? The Complete Guide
Now that your kids have some time out of school, you’ve been thinking about planning a vacation. Well, you thought about it until you saw how much it would cost to rent a hotel for the week.
In some nicer areas, you can expect to pay 400 dollars a night for a room. The cost of vacations is one of the main reasons why people opt-in for timeshares.
How do timeshares work and are they worth it? They’ll give you the deed to a vacation home that you’ll share with other people. In return for your payments, you’ll have a certain block of time during the year when you can occupy the residence.
Are you looking for more timeshare information that can help you decide if it’s a good option for you? Keep reading this handy vacation guide.
What Is a Timeshare?
As we stated above, a timeshare is a type of rental property. You’ll share the cost of the home with other vacationers. In exchange, you’ll have a guaranteed block of time during the year when you can use it.
For the most part, your home will be located in a community of other smaller vacation houses.
Why Are They So Popular?
So, now for the big question. Why should you bother with buying a timeshare?
Most timeshare options are expensive. Can they really give you and your family a cheaper vacation?
They’re Great for Everyone
Spending a vacation in a hotel room is all well and good, but they tend to be sort of cramped. Depending on how many people you have with you, it might be necessary to rent more than one room. That means more spending more money!
One of the well-known facts about timeshares is that the houses have several rooms. It makes it the perfect vacation solution for people with huge families.
You can split your timeshare with family and friends and plan to vacation at the same time every year.
You’ll Have a Built-In Vacation
The worst part of going on vacation is planning the entire thing. You’ve got to search around for the best and most affordable hotel.
Having a timeshare cuts out a lot of hassle. You’ll already have a guaranteed place to crash.
You’ll most likely be familiar with the area and the amenities the vacation home has to offer, so you won’t have to worry about finding something to do.
They Can Be Worth the Cost
The main downside of buying a timeshare is the expense. It’s almost the equivalent of taking out another mortgage.
If you and your family tend to take a vacation once a year, however, the expense might be worth it. Getting a nice hotel in a high tourist area can cost you hundreds of dollars every night.
Types of Contracts
There are different types of timeshares that you can choose from. First, we’re going to go over who owns the deed.
You can go the shared deeded or shared leased route. They both come with different limitations and advantages.
Shared deeded timeshares give everyone who buys into the rental property a little piece of the pie. You share the deed with a bunch of different people.
No one can take your timeshare away from you. No matter how many developers the property goes through, you’ll still own part of the resort.
You’ll have some say when it comes to making the big important decisions like who does your maintenance and lawn care.
The best part is that your deed will be transferable. These timeshare resale listings all once belonged to someone just like you. You can post yours too and give it to someone else for a price.
When you buy into a shared leased timeshare, you’re renting part of a vacation home. You pay for your right to use the property for a certain amount of time every year, but you don’t own it.
The timeshare company can up the price for your property, and there’s nothing that you can do about it. Since you don’t own the home, your contract will expire at some point. You’ll get to have about 20 years of guaranteed fun.
The most disturbing part is if the property management company were to go bankrupt, you’d lose your timeshare.
How Can You Use Your Timeshare?
You’ve signed the contract for your timeshare and paid the necessary fees. how can you use your new property?
There are three ways to go about it. You can choose a floating week or fixed week option. If those don’t work for you, there’s always the point-based system.
The floating week option gives you a certain timeframe that you can choose from every year to use your vacation home. There are limits on it.
For example, you can book your vacation any week between February and December. The weeks before and after Easter are grayed out. You can’t select those as an option.
In some cases, you’ll only have a certain window of time to reserve your spot. You’ll have to book your summer getaway in January or you’ll lose your chance.
The fixed week option will allow you to reserve a specific week to use the house every year. The catch is that it’s always going to be the same week.
If you need to change your scheduled time, you can, but you’ll have to jump through a ton of hoops. That includes paying an expensive fee.
The points system is also called a timeshare exchange program. Your timeshare will be worth a certain amount of points. You can cash them in to book your vacation.
When you’re reserving your spot, it’s important to note that not every resort is created equal. Some of them might come with a bunch of extra fees after using your points.
How Much Do Timeshares Cost?
Again, timeshares can be expensive. They can run upward to 10,000 dollars or more. Most people can’t buy one without taking out a loan of some kind.
You’ll also have to pay around a thousand dollars on yearly maintenance for your vacation home. It can vary, depending on how large the property is.
Are There Downsides to Timeshares?
There are some downsides to getting a timeshare. They don’t offer much when it comes to flexibility.
You can sell them, but it’s a pain. You may also run into a bunch of fees that you weren’t prepared for.
The biggest downside to timeshares is that they aren’t flexible. You have one block of time during the year where you can stay in your vacation home.
In the case of floating week timeshares, sometimes your week will roll around when it’s not convenient. Now you’re left with the choice to sell the timeshare so you don’t waste the money or to eat the expense without getting anything out of it.
If you buy a vacation house, you’ll be able to visit it whenever you want. You have the freedom to go on vacation whenever.
It’s Not Easy to Sell Them
If you’re tired of paying for your timeshare, the best solution is to sell it to someone else. You may find a buyer, but the market is pretty saturated. It will most likely take a while before you find an interested party.
For the most part, you won’t be able to get back the money you spent on the property either. It’s not a good investment.
You Might Run Into Fees
There are a lot of fees associated with timeshares. You’ll have to pay for utilities, taxes, and maintenance. That’s something that the property manager will be outright with in the paperwork.
Where they get you is special assessment costs. They tend to hit timeshare owners out of nowhere. These fees include upgrades and repairs.
If your vacation home is located in a place that sees a lot of hurricanes and other natural disasters, expect to pay for special assessments more often. The damage has to get taken care of somehow.
How Do Timeshares Work to Give Your Family an Awesome Vacation?
Do you and your family plan a vacation once a year? Instead of booking a hotel room and paying 400 dollars a night, consider purchasing a timeshare.
How do timeshares work? You’ll get the deed to a property that you’ll share with your fellow vacationers.
By paying into it, you’ll reserve a week out of every year where you can stay on the property. While it’s not the perfect way to plan your getaway, it’s one of the easiest.
Do you want to learn more about timeshares and how to buy into your vacation home? Visit the Lifestyle section of our blog.