Timeshares are great way of enjoying the vacation while owning the piece of property with a standard of quality, through which personal expectations are satisfied year after year with the certainty of good facilities with comfortable accommodation made available to the person owning it. The concept of timeshare enables the person to experience a quality holiday among the company of fellow owners like him.
What Is a Timeshare?
The timeshare concept is very simple. A person enjoys ownership by buying a week or weeks for a fixed number of years or for his lifetime in a luxury holiday resort or home. The owner only pays for his share for the upkeep and development of the property he owns. High quality of furnishing and amenities are made very affordable because the developmental cost is shared among all the owners.
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Different types of timeshare ownerships:
• Fixed timeshares
This kind of timeshare is only for a particular week or days of the year. The resort sells the particular unit of time says a week or weeks of the year to the person who is willing to buy it. The rest of the year, other owners in similar fashion utilize it.
• Floating timeshare units
A floating timeshare too is only for a particular period of time fixed. But there is no specification of dates and that is the advantage of floating timeshares, say the owner is eligible to stay for a week of summer, it can be defined by the owner, which week of summer he would like to holiday.
• Rotational timeshare units
This combines the benefits of both the fixed and the floating type of timeshares. The rotation of holiday stay can go either backwards or forward on the season and calendar, giving opportunity to all owners on a rotational basis.
Apart from the above three types of timeshares there are two more kinds of ownerships of timeshare properties, one being the deeded and the other right to use type of ownership.
• According to the deed property, the owner owns a bit of the real property, bought and sold under the by-laws of the community according to the owner’s wishes.
• The right to use kind, allows the person to have right on the property for a particular period of time for a fixed number of years, after which he does not have any rights on the unit or facilities or the time slot.
Due to the increase in popularity of timeshare concepts apart from the resorts and apartment style accommodations, it is possible to have a cruise ship timeshare, campground timeshare, yacht and even private jet kinds.
- What you get. You are purchasing the privilege to use a luxury accommodation in a resort or hotel, usually for one week per year. You get the comfort and convenience of a vacation home with the luxury of a resort, says Howard Nusbaum, president of the American Resort Development Asso¬ciation; see ARDA’s guide, “Understanding Vacation Ownership”). Most timeshares are developed or managed by big-name hospitality companies, such as Disney, Hyatt, Marriott and Wyndham. Urban timeshares are a new variation that have taken off in several cities, including New Orleans, New York City, San Francisco and Washington, D.C.
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- What you’ll pay. The upfront price is based on location, unit size (from a studio to three bedrooms), amenities and the season you select. A week in a new, upscale two-bedroom unit with a view averages about $20,000, although you could pay as much as $40,000 in New York City, says Nusbaum. Most buyers pay cash. Developers offer financing but charge a high rate of interest (typically 15%), says Judi Kozlowski, an agent in Orlando who specializes in timeshare resale. You’ll also pay an annual maintenance fee of $800 to $1,200, she says.
- Same time, same place? With fixed ownership, you’re locked in to a specific week each year. With floating ownership, which is more common, you can reserve your vacation time on a first-come, first-served basis. You gain flexibility, but popular destinations, such as Maui in winter, may be hard to get. Depending on the “exchange value” — the desirability of your timeshare — you may be able to switch to another venue within your home resort’s portfolio of properties, says Nusbaum. Or you may be able to trade through an exchange company, such as RCI or Interval International.
- Buy for less. If you buy a timeshare from the resort, you may be offered incentives (say, free membership in an exchange company), and you may enjoy greater consumer protections. But if you buy from a current owner, you’ll likely pay one-third to half as much, or even less. In May, an owner at Marriott’s Cypress Harbour, in Orlando, listed a two-bedroom, two-bath unit for $3,000, with a $1,208 maintenance fee. To search resale listings.
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- What happens if you want out? The industry is better regulated than it was, say, a decade ago. Most states allow you to cancel a timeshare contract, usually within five to seven days. To sell a timeshare, your best bet is to list it with a reputable resale broker (go to http://www.licensedtimeshareresalebrokers.org); brokers generally charge 10% to 30% commission. During the last recession, some owners who could no longer afford their units fell prey to scamsters who promised quick sales and collected upfront fees. (For more on potential pitfalls, search “timeshares” at http://www.consumer.ftc.gov.)
- Bottom line. Timesharing is almost certainly cheaper, with fewer hassles (in terms of property management) and more flexibility, than buying a vacation home or condo. But don’t think of it as an investment; a timeshare doesn’t appreciate. The value lies in using it, and if you’re lucky it may have some residual value when you sell it.