What is a Vacation Timeshare?
At some point, you or someone you know may have been asked to listen to a timeshare sales pitch. You may find the chance to own a piece of resort property and enjoy a yearly vacation with your family a lifetime opportunity, but what exactly is a timeshare?
Definition
of Timeshare
A timeshare is a type of property ownership. When you buy a timeshare,
you are buying deeded weeks of property from timeshare resort owners. You
acquire a percentage of interest in a vacation property for a specific interval
of time, and you have the flexibility to do what you wish with your weeks.
Timeshare use and running costs are shared by timeshare owners. Most timeshares
are condominium resorts, however, they can also be in the form of houseboats,
yachts, or motor homes.
Timeshare
Basics
There are two kinds of timeshares:
• A deed to own real estate that allows you shared interest in a timeshare unit that you use for a defined time each year
• A lease, license, or membership that allows you to use various properties like hotels, resorts, or condos for a specific time over a defined number of years
Timeshare
Benefits
A timeshare can be an attractive investment. If your family is large, it
is generally less expensive to vacation in a timeshare. Because you have
a guaranteed vacation destination, there's less hassle with a timeshare
than if you have to always search for hotels and make reservations.
Timeshares can be hassle-free, cost effective, and flexible depending on your lifestyle and recreational interests, so listening to the sales pitch may be worthwhile for you.
Sources:
Federal
Trade Commission
BBB Aware
What
Are Typical Timeshare Costs?
You picture yourself sipping a drink by the pool of your new timeshare,
but have you pictured how much that scenario will cost? You should do some
investigation to decide if a timeshare purchase is a sound financial investment
for you.
Timeshare
Prices
While the average timeshare costs between $8,000 and $12,000, there are
several other variables you must consider when pricing timeshares:
• Location: A timeshare in a less desirable location will typically be less expensive than a timeshare in a more desirable location. Examples of high-demand timeshare locations include Hawaii, the Caribbean, and Cancun.
• Property condition: Newer timeshares are usually much more expensive than used timeshares
• Variables: Timeshare cost can depend on share size, time of year, and market value
Timeshare
Fees
When purchasing a timeshare, initial price is not the only factor. Here
are a few added costs you may not have considered:
• Annual Fees: Timeshare resorts charge owners annual fees for maintenance, tax, and utilities. You can expect to typically pay around $300-$500, but larger share or peak-season share fees could average more per year.
• Miscellaneous Costs: Includes the mortgage, closing costs and fees, annual maintenance fees, property taxes, broker commissions, insurance, and any finance charges
• Cost of Travel: You may need to pay for a plane ticket or car service to get to your timeshare.
• Real Estate Fees: A resort may be able to charge the shareowners for costs incurred to make major improvements on the property.
Your incentive for purchasing a timeshare is most likely to enjoy a low-cost vacation. Research the expenses, and before long you can be relaxing poolside.
Sources
Federal
Trade Commission
Federal Trade Commission
Documents
BBB Aware
History
of Timeshares
The evolution of the timeshare industry has been shaped by various events
in history.
Freedom to Explore: The 1960s
Travel and tourism was revolutionized in the 1960s by both space exploration
and the commercial jet. Travelers were inspired to vacation further from
home, inspiring the origination of the timeshare. A hotelier from the French
Alps pitched the world’s first timeshare with the motto, “No
need to rent the room, buy the hotel--it’s cheaper!”. The
concept spread worldwide.
Oil Crisis and Cost Savings: The
1970s
In the 1970s, the global economy faced two oil crises. Due to increased
gas prices, travel became expensive and vacationers were forced to change
their plans and save money. Ideal for cost savings, timeshare developments
were launched in Florida and spread to other vacation hot spots throughout
the United States. In 1974 the first vacation exchange company was established,
providing consumers with the vacation resort flexibility.
Financial Boom: The 1980s
Business and leisure habits were revolutionized with the growing fortunes
in the 1980s. Timeshares exploded throughout Europe as vacationers discovered
the benefits of timeshare developments and had more money to travel.
Established Market: The 1990s
In the 1990s, the timeshare industry became a mainstream vacation sector
in Western Europe and North America and expanded rapidly throughout Asia
and Eastern Europe. The multi-billion dollar timeshare industry attracted
large corporations to pursue timeshare interests.
Timeshares
Today
Social trends have helped the timeshare industry prosper. More people have
the money to travel and own vacation property. There are nearly 5,400 timeshare
resorts in over 100 countries, and analysts predict timeshare revenues to
double within the next decade.
Sources
18th Century
History - The History of Timeshare
RCI
Affiliates - History of Timeshare
How Can
a Timeshare Be Used?
You may think that if you buy a timeshare, you are stuck vacationing in
the same location year after year, or you’ll lose money if you don’t
use your timeshare. However, there are different ways you can optimize your
benefits.
Types
of Usage
Timeshare use is usually separated into weekly increments and sold as partial
ownership of real property. Here are your options for how you use your time:
• Personal Usage: You can stay at the resort during your scheduled time, depending on the terms of the ownership
• Rent out Your Owned Usage: You can sub-lease your timeshare and profit from your unused time
You don’t have to vacation at the same spot every year. With so many timeshare usage options, you can customize your use to fit your lifestyle, needs, and interests.
Sources
Federal
Trade Commission
Copyright ©
2006 HQ Publications, LLC.
All rights reserved.
This advertising material is being used for the purpose of soliciting sales of timeshare interests.
What is a Vacation Timeshare