How does a timeshare work?

Question

When I was in Las Vegas a few months ago, everywhere you went people were trying to sell me a timeshare. I know a couple of people who have them. I wanted to know how they worked and why half the people who have them love them and the other half go bankrupt?

Answer 1

Timeshare at its core is essentially a group of people sharing the cost of a vacation home.

The word "timeshare" has grown over the decades to include a wide variety of vacation products and plans. Also known as "vacation ownership" "holiday ownership" and "interval ownership" , its umbrella covers traditional deeded timeshare ownership, fractional ownership, private residence clubs, points clubs, and more. Some would even broaden the term further to include campground memberships and the " condo hotel" concept, in which a condo is purchased outright but the owner is only allowed to use it for a specific periods of time and it is rented by a hotel management company for the remainder of the time.

Regardless of how loosely or rigidly you choose to define the term, the basic premise of timeshare is simple. You and a group of other people share the purchase cost of a vacation accommodation, in increments of one week (or more) per year of use, thus guaranteeing your ability to use that accommodation during the period of time you choose, either for life or for a specified number of years. Accommodations range from hotel rooms to condos, from cabins to luxury houses and castles, from yachts and cruise ships to RVs and houseboats.Owning timeshare in the traditional sense means a condominium/villa/house/hotel unit, etc. is subdivided into 52 separate units of time (52 weeks in 1 year), and usually sold to a maximum of 51 owners (leaving one week each year closed down for annual renovations and/or maintenance). Each owner would own 1/51 of the unit. Each share repesents one week of vacation. Each owner is entitled to ownership rights and privileges of the shares that they purchased.

Timeshare is definitely for people with NO FINANCIAL problems and when doing it for the RIGHT reasons and under the RIGHT CIRCUMSTANCES it can be a GOOD THING.

BIG "NO,NOS" IN TIMESHARE:

*If you normally spend less than $100 USD a night for accommodations then timeshare is NOT FOR YOU

*It is not a financial investment

*Don´t buy if you plan to rent it

*Don´t buy if you plan on reselling

*Don´t buy if you plan on exchanging often

*Make sure you can afford to travel at least one week a year

*NEVER BUY FROM THE DEVELOPER

THE RIGHT CIRCUMSTANCES:

*This system makes vacation home ownership possible for many people who cannot afford a second home or who otherwise would not be able to enjoy such resort facilities. Timeshare is an investment in lifestyle, in future holidays, in family time together, and when viewed that way it can be a good investment indeed.

*Get it in an area the you LOVE and that you would visit every year without a problem

*Get it in a very nice Resort (where normally people would pay at least $200 a night)

*Get it in the resale market (it would cost you less than $1000 USD) so all what you have to spend is the maintenance fee.

HERE ARE THE NUMBERS:

$200 USD a night (in a decent resort) x 6 nights = $1200 USD

Maintenance fee in a NICE RESORT  x 6 nights     = $700

*Maintenance is a "decent resort"      x 6 nights   = $400

You do your numbers.

Answer 2

The reason some people love timeshare and others go bankrupt is that many consider timeshare a financial investment. Timeshare is best considered an investment into your future vacations and well-being.

The best way to get the most out of your timeshare is to use it. Many owners purchase a timeshare week and find that they are unable to use it because of personal or professional obligations. Be sure that you and your family can make the commitment. Also, consider buying resale. You'll be helping an owner whose lifestyle no longer fits timesharing and saving your family a considerable amount of money.