What is Timeshare?
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, destination 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 a deeded interest in 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. Price is usually determined by the resort’s location, size of the unit and the time of year purchased by a new owner, and owners pay an annual maintenance fee for the upkeep of the property.
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.
The deeded aspect of timeshare is the reason that in most USA states the sales representatives are required to be licensed real estate agents and a broker must oversee the transactions. (See “Sales Licensing by State” for a list of states and their individual requirements.) Note that outside of the United States deeded ownership is uncommon, utilizing instead a “Right to Use” program.
A Points system is the other common means of ownership in traditional timeshare, and it has been around since Vacation Internationale invented it around the early 1970s to make their timeshare product more flexible for their owners.
You can find out more about Points, Right to Use and other timeshare systems, including Fractional Ownership, Private Residence Clubs and Destination Clubs at Types of Timeshare Programs.
It is important to remember that purchasing timeshare should never be viewed as a financial investment with the expectation of gaining a profit in either reselling it or renting it to someone else. 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.