Introduction to Timeshares
A timeshare, also called fractional ownership when dealing with other assets, is a program in which you purchase fractional ownership in a piece of property and are able to use it for specific time periods during the year. Timeshare is a specific term that usually refers to resorts or vacation properties and, to the best of our knowledge, the idea of fractional ownership began with timeshares.
Timeshares are usually for a period of a week, though many developers are now offering “fractional ownership,” which refers to periods of longer than a week and may stretch into several months; and so one unit is thus “owned” by multiple owners for their use throughout the year. You can own a fixed week, a specific week each year, or a floating week, a week’s use anytime during the year subject to availability; or you can own a fixed unit, a specific unit each time, or a floating unit, any unit in the same unit category. As you can see, there is a lot of flexibility involved with the marketing of timeshares.
When you buy a timeshare from a developer, you typically pay a fixed purchase price and closing costs. This also puts you on the hook for an annual maintenance fee to cover upkeep and management as well as, usually, a per use fee whenever you book your week of use.
It’s become popular for resorts to join exchange company rosters so that you can deposit your weeks into the exchange company’s space bank and then exchange them for time at other resorts. The same vacation year in and year out may not be appealing for some so the exchange company affiliation adds flexibility. There is usually an exchange fee associated with each exchange plus not every week is created equally.