Timeshares
Timeshares, also known as time-sharing, is a model of property ownership where several people hold rights to use the property, usually a vacation resort or split-level condos, for specified periods every year. Each owner buys a specific fraction of time in the unit, typically one week, and the costs associated with the ownership are divided among all co-owners.
Examples
- Orlando timeshare: An individual buys one week of timeshare in a resort unit in Orlando, Florida. They can use the property for one specified week each year (Week 36 each year, for example) and share ownership costs with other timeshare owners.
- Hawaii timeshare resort: A buyer purchases a timeshare for a beachfront resort in Maui. They own a fraction, such as two weeks, of annual usage time that lets them vacation there every year within a specified window, such as December 15 to 29.
Frequently Asked Questions
What are the benefits of owning a timeshare?
Owning a timeshare can offer cost savings compared to renting hotel rooms for annual vacations, ensures guaranteed accommodations during peak seasons, and provides long-term cost predictability.
What are the downsides of timeshares?
Maintenance fees can be high and increase annually, resale value is often much lower than the purchase price, and there can be restrictions on when the timeshare can be used.
Can timeshares be rented out?
Yes, most timeshare agreements allow the owner to rent out their timeshare period if they are unable to use it.
How are timeshare fees determined?
Fees are usually proportional to the ownership share and can include property upkeep, taxes, management fees, and utilities.
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Fractional Ownership: Involves ownership of a property shared among multiple individuals with a broader scope than timeshares, often including equity in the property.
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Vacation Ownership: Broad term encompassing various ways individuals can own usage rights to a property, including timeshares and fractional ownership.
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Resort Properties: Properties designed specifically for vacation-goers, typically offering amenities and services similar to a hotel.
Online Resources
References
- “Vacation Ownership 101” by Shmuel Vaknin
- “Timeshares for Dummies” by Lisa Ann Schreier and Sebastian R. Naum
Suggested Books for Further Studies
- “The Time-Share Fraud: How to Avoid It and Beat It” by Michael K. Bowden
- “Vacation Ownership Sales Training: The One-on-One Successful System” by Nancy Geils
- “The Insider’s Guide to Timeshares: How to Buy Smart and Sell Once You’re Done with Your Slice of Paradise” by Michael J. Schieneman
Real Estate Basics: Timeshares Fundamentals Quiz
### What is a primary benefit of owning a timeshare?
- [x] Guaranteed vacation accommodation every year
- [ ] Full ownership of a property
- [ ] Exemption from property taxes
- [ ] No maintenance costs
> **Explanation:** Timeshare ownership offers guaranteed accommodations during peak vacation periods each year, making it easy to plan and enjoy vacations.
### How is ownership divided in a timeshare agreement?
- [ ] Equally among all owners
- [ ] Based on investment amount
- [ ] Fixed term every year
- [x] By owning specific time periods in the unit
> **Explanation:** Owners have rights to use the property during specific time periods each year, dividing ownership by time rather than equity.
### What is a common drawback of owning a timeshare?
- [ ] Increasing property value
- [x] High and increasing maintenance fees
- [ ] Lack of relaxation amenities
- [ ] Limited access to nearby attractions
> **Explanation:** Maintenance fees for timeshares can be unexpectedly high and tend to increase regularly, impacting the overall cost of ownership over time.
### In what type of properties are timeshares commonly found?
- [ ] Urban residential homes
- [x] Vacation resort properties
- [ ] Commercial office buildings
- [ ] Industrial facilities
> **Explanation:** Timeshares are typically found in vacation resort properties offering vacation-goers semi-luxury accommodations and various amenities.
### How can timeshare owners utilize their specific time period if they do not wish to visit?
- [x] Rent it out
- [ ] Use a hotel exchange program
- [ ] Extend their ownership term
- [ ] Transfer time to another timeshare property
> **Explanation:** If owners cannot use their allotted time, they can rent out their timeshare period to someone else, implied by most timeshare agreements.
### How frequently are timeshare maintenance fees typically paid?
- [ ] Weekly
- [ ] Daily
- [x] Annually
- [ ] Every five years
> **Explanation:** Maintenance fees for timeshares are usually assessed annually and shared among all owners to cover property upkeep and management.
### Who can claim property taxes in a timeshare?
- [ ] Any associate of the timeshare company
- [ ] Renters during their designated time period
- [x] Individual owners based on their share of ownership
- [ ] None of the above
> **Explanation:** Individual timeshare owners are responsible for their proportionate share of property taxes based on their ownership period.
### What is Fractional Ownership?
- [ ] Full property ownership
- [ ] The same as timeshares
- [x] Broader, more flexible ownership of property shared among people
- [ ] Only applies to international properties
> **Explanation:** Fractional ownership involves broader ownership shared among several individuals, typically allowing them control and benefits beyond those offered by timeshares.
### What is unique about vacation ownership as compared to regular home ownership?
- [ ] Higher property taxes
- [ ] Limited to urban areas
- [ ] Properties are designed without amenities in mind
- [x] Includes various ways to have usage rights, such as timeshare and fractional ownership
> **Explanation:** Vacation ownership allows individuals to access specific usage rights, often with built-in amenities, by purchasing either timeshares or fractional ownership without needing to fully own the property.
### Which is a common regulatory body providing timeshare information?
- [ ] Local real estate agents
- [ ] Financial advisors
- [x] American Resort Development Association (ARDA)
- [ ] Municipal governmental website
> **Explanation:** The American Resort Development Association (ARDA) is a crucial resource for secure, regulated, and updated information regarding timeshare ownership and practices.
