What is a Timeshare and How Does It Work?

Most people have heard of timeshares. Few people know precisely what they are or how they work. This confusion has contributed to timeshares’ bad reputation over the years. But while timeshares aren’t for everyone, they can be an excellent fit for some. In short, a traditional timeshare is a lifestyle product that lets you enjoy usage rights at a particular vacation property during a specific interval (usually one week) each year. Today, however, traditional weeks-based timeshares are being supplanted by points-based ownership, giving owners more flexibility in where, when, and how long they want to vacation. Still on the fence? Whether you want to create an annual vacation tradition at one resort, enjoy the freedom of points-based vacation ownership, or you’re just curious about the meaning of timeshare, read on as we answer the question, “What is a timeshare, and how does it work?”

What is a Timeshare?

A timeshare is a vacation property (such as a villa or condo-style suite) that is divided for multiple owners by time. Most of the time, they are divided into 52 weeks so that every owner can have a full week at the property. The meaning of timeshare is as simple as it sounds! Timeshare owners share the property by time.

Nowadays, there are many different types of vacation ownership. As mentioned, most timeshare brands are moving to a points-based model of ownership as opposed to the traditional same-week/same-resort ownership. This allows owners to have the most flexibility in their vacation options.

How Does Timeshare Work?

Now that you know what a timeshare is, you might be asking yourself, “But how does timeshare work?” Through a timeshare arrangement, the costs of owning a property are spread out among several people, allowing them to enjoy the benefits of ownership without having to bear the entire cost alone. Vacation ownership is a unique way to share the costs of ownership with multiple people. Depending on the agreement, each party may own a fraction of the vacation property (known as “fractional ownership”) or simply lease it for a period of time.

Types Of Timeshares & How Each Work

Deeded Timeshare

A deeded timeshare property has the same ownership rights as actual real estate (however, unlike real estate, vacation ownership is not an investment and does not appreciate). Deeded ownership means the owner has the right to sell, bequeath, rent, or even give it away.

Right to Use Timeshare

Right-to-use (or RTU timeshare) ownership grants owners the right to use their ownership for a specified amount of time through a lease. Generally, the lease is for 30-99 years. Once the period of specified time is up, the ownership goes back to the resort, or the lease is terminated. 

Leasehold Timeshare

Leasehold timeshares are similar to RTU. However, with a leasehold, you do have ownership without a deed for a set period of time. Disney Vacation Club is an excellent example of a leasehold timeshare company.

Different Timeshare Sub-Types

Fixed Week Timeshare

A timeshare week is the type of ownership that most people are familiar with. As with all timeshares, owners have paid for their share of time at the resort, and generally, that time equates to one full week. Each resort has a different calendar system for its owners. The first week of January is typically week one, however, and the last week of December is generally called week 52. With a fixed-week timeshare, you’ll stay at the same resort at the same time each year. This type of ownership is great for people who love a specific property or destination and want to keep coming back to it.

Points-Based Timeshare

Most companies these days use a point system for timeshare properties. How does a points-based timeshare work? Typically, the fixed week is converted into points. So, based on the week or caliber of ownership, vacation owners will have a certain number of points at their disposal. Guests can use these points to stay at different resorts in the brand’s network or stay at the unit at their home resort. When you check out timeshares for sale in our marketplace, there are point charts available for participating brands. You can see that the point value varies depending on the ownership type. Many timeshare owners love the control having a number of points gives you, letting you visit the beaches, mountains, and theme parks, all with the same ownership. Vacation Clubs are aware of this popularity, so your typical timeshare currently is most likely going to be points-based.

Floating Week

A floating week means that you can reserve your stay for any week of the year on a first-come, first-served basis. In some cases, floating weeks may only apply to a certain season. For example, an owner can own a week of the winter season, so they can stay at their resort any week available within that season. Depending on demand and location, some seasons have a higher value than others.

Biennial vs. Annual

Biennial timeshare just means that owners can use their ownership every other year. Annual is, well, annually! Meaning owners can use their ownership every year, given they pay their timeshare maintenance fees.

The Importance of Reading Your Timeshare Contract

If you decide to buy a timeshare, be sure to read your contract carefully. All timeshare buyers should check their contracts for info like what type and subtype of ownership they’re buying. Your timeshare agreement will also have other important info about your vacation property that may be important if you ever decide to sell your ownership.

Timeshare Maintenance Fees

One other important aspect of being a timeshare owner that you’ll want to keep in mind is maintenance fees. These fees are typically paid annually and, as the name implies, are used to maintain your vacation property. Renovations, new amenities, and staff are all paid for using maintenance fees. So, all the benefits you’ll get during your vacation are thanks to these yearly maintenance fees. Because they’re a major factor in timeshare costs, understanding maintenance fees is something all timeshare buyers should do.

What is a Timeshare Resort?

So, you know what a timeshare is and how it works. But what is a timeshare resort? Timeshare resorts are properties that feature top-of-the-line amenities and accommodations. Unlike hotels, vacation ownership resorts offer suites that include full-size kitchens, multiple bedrooms, and private balconies. Simply put, a timeshare resort is where vacation owners stay for their vacations. When you purchase a timeshare, you have the option to choose your home resort, which is where you will have priority booking every year.

Resort Amenities

When you decide to book a vacation, it’s important to consider the amenities you must have for a great vacation. Amenities are considered the extras at a resort, like fitness centers, swimming pools, day spas, water parks, and lazy rivers, just to name a few. Depending on the location, you can also find on-site ski slopes in places like Breckenridge, Colorado.

Residence Style Accommodations

The accommodations at vacation ownership resorts are undoubtedly one of the main things that set them apart from hotels. If you love traveling with a large group or extended family, timeshare resort accommodations are perfect. Many resorts offer suites that have anywhere from one to four locking bedrooms. This means everyone can have their own comfortable space to relax in. 

Additionally, accommodations come with more than one bathroom, so you won’t all have to share just one. Not to mention, many villas or suites come standard with in-unit washers and dryers, as well as full-size kitchens and separate dining and living areas. The extra space leaves you more room to stretch out, watch a movie, and cook dinner, like the perfect home away from home.

Timeshares vs. Hotel

There are some key differences between timeshares vs. hotels. Timeshare suites are much like residences, with kitchens, bedrooms, and living rooms. Staying in a resort is more like staying in a vacation home or apartment than staying in a hotel. As you can see, the offerings at timeshare resorts are far more extensive than those at your average hotel. Did you know the average timeshare unit is 3x larger than a hotel room? Plus, you receive more than just a microwave. In addition, you can pack lighter and use the in-room laundry to freshen up your favorite vacation outfits. This is especially helpful for large families or families with children because you can pack less.

Timeshares vs. Home-Sharing

Home-sharing is another form of lodging with many advantages over hotels. Home-sharing apps let you book homes from their owners. Like timeshares, these homes usually offer more space, privacy, and amenities than hotel rooms. However, home-sharing falls short of timeshare in a few key ways. Home-sharing accommodations don’t always live up to their pictures online. Timeshares, on the other hand, are meticulously maintained by the resort courtesy of maintenance fees. Moreover, home-sharing rentals often come with hidden fees, while timeshare rentals feature all their fees upfront. And finally, while a home-sharing rental is just a home, a timeshare is usually part of a resort, which often has amenities like pools, fitness centers, and planned activities.

Top Brands

Make sure you research which company you want to own with before you buy a timeshare. Benefits and systems vary among the top brands.

Vacation Exchange

If you value traveling far and wide, you’ll be pleased to know that timeshares allow a lot of options when it comes to visiting new places. Vacation exchange networks allow members to go to different resorts with their points. Club Wyndham, Disney Vacation Club, and Marriott Vacation Club are all examples of internal exchange networks. You can travel within the brands’ networks to their other resorts. For example, if you own in Colorado, you may have the chance to exchange your week for a week in Hawaii.

RCI vs. II

Timeshare Buying Tips

How Much Does Timeshare Ownership Cost?

According to ARDA, the average cost of a timeshare in 2022 was $23,940. If you’re looking to buy a timeshare, the resale market has ownership at much lower costs than retail. The great thing about resale is that although from the secondary market, it is not second-rate. Brands work hard to keep their units looking luxurious, so you can purchase the same great ownership for less. Knowing the best buying tips is a great place to begin.

Our number one piece of advice is to do your research on choosing the best possible ownership for you. Do you want a fixed week in one location to guarantee your spot every year or points-based timeshare ownership so you can travel to new resorts? There truly is a timeshare perfect for everyone’s preferences. The major flexibility is just one of many reasons why people still buy timeshares.

Why You Should Work With Fidelity Real Estate

When it comes to navigating the timeshare industry, you’ll want to work with a trustworthy company. With Fidelity Real Estate, that’s precisely what you get. Fidelity Real Estate has been part of the timeshare industry for over 20 years and has an A+ rating with the Better Business Bureau. Plus, as a member of the American Resort Development Association, we follow a strict set of guidelines that helps to keep everyone in the industry safe. As a result, you can trust us when you’re ready to buy a timeshare.

Buy a Timeshare With Fidelity Real Estate

Ready to become one of the millions of satisfied timeshare owners? Then check out our marketplace! We have listings from all of the best vacation clubs, like Hilton Grand Vacations Club, Disney Vacation Club, and Holiday Inn Club Vacations. Whether you want a floating week timeshare or one that’s points-based, we’ll help you take the vacation of your dreams at one of the top timeshare destinations. If you have any questions about annual maintenance fees, vacation exchange, or anything else about the industry, call us at 1-800-410-8326 or email [email protected]. Our licensed agents are happy to help!

How to Sell a Timeshare and Avoid Timeshare Scams

There are many options to get out of a timeshare, but if a timeshare exit company advocates strongly against vacation ownership, tells you to stop paying your maintenance fees, or requests large upfront payments, it is wise to be wary and to make sure they are recognized by the American Resort Development Association (ARDA).