what is a timeshare

What Is a Timeshare? A Guide for Beginners

VWB Blog 1 year ago 22

Did you know that approximately 10 million American households own at least one timeshare? Many people buy timeshares for the opportunity to vacation in destinations they couldn’t otherwise.

But what is a timeshare exactly, and how does it work? Before you decide to purchase a timeshare, it’s essential to learn more about timeshares, including their advantages and disadvantages. This way, you won’t sign a contract and have regrets later.

Keep reading this guide to learn everything you need to know about timeshares!

What Is a Timeshare?

A timeshare involves a shared ownership model of a vacation home. This model allows different people to buy allotments of time. Once you purchase a timeshare, you share the property cost with the other buyers.

In return, you’ll receive a guaranteed time slot to vacation at the property annually.

You’ll find timeshares available in different properties like resorts, condominiums, or apartments. There are also campground timeshares for private campgrounds or RV parks.

Many people buy a timeshare instead of paying a vacation home mortgage. With a timeshare, you don’t have to worry about monthly expenses or the costs of maintaining the property.

How Do Timeshares Work?

A timeshare is what’s known as fractional ownership. With fractional ownership, you’ll buy a fraction of the property based on the time you plan to use it throughout the year.

In other cases, each buyer will lease the property for a specific time without having any ownership of the property.

Timeshare Usage

Typically, timeshares have defined periods measured in one-week increments that determine when you can use the property. You’ll find different systems, which include:

Fixed Week

With a fixed-week timeshare, you’ll have the right to use the property exclusively for a specific week each year. In some cases, you might get multiple fixed weeks.

Many people prefer this structure since they can plan their vacation at the same time each year. On the other hand, changing the fixed period to another time period can be challenging.

Floating Week

Floating week timeshares give you use of the property for a week or more during a predefined period. You may even get different predefined periods throughout the year.

Floating week systems are much more flexible than the fixed week timeshare, but there is often no availability during the busiest times of the year. If you buy a floating week timeshare, you’ll need to book in advance to ensure the week you choose is available.

Points System

With a points system, points represent the ownership of your timeshare. Points are typically based on factors such as:

  • The resort or property location
  • Size of the vacation property
  • Availability throughout the year

Some people prefer the point system because it allows for more vacation choices since you can choose different locations throughout the year.

You can purchase points once you decide on a timeframe and location. You can find point system timeshares at resorts like Disney or Hilton.

Types of Timeshares

There are two main types of timeshares. First, a shared deeded ownership gives you a percentage of the physical property corresponding to the period you purchased. Fractional ownership often involves luxury vacation properties with more amenities and services.

For example, if a resort-style apartment or condominium sells one-week timeshares during the year, it can have a total of 52 deeds. Therefore, you’ll have a one-fifty-second or 1/52 ownership in the unit. The more weeks you buy, the more ownership interest you’ll have.

Next, there is shared leased ownership interest. This type of ownership entitles you to use a specific property for a floating week or a fixed week throughout the year. Many times this type of ownership allows for multiple weeks, depending on how many weeks you’re interested in purchasing.

Having a shared leased ownership interest doesn’t typically mean you have fractional ownership.

Timeshare Advantages and Disadvantages

Before committing, you’ll need to consider the different advantages and disadvantages of timeshare buying. You also must consider your current lifestyle, job, and overall budget.


A timeshare vacation is affordable and offers you no-maintenance ownership. You’ll get the perks of vacation home ownership while only paying for the time you use the home.

You’ll typically pay maintenance fees while using the home, but these are lower than if you owned a vacation home. You also don’t need to worry about handling any maintenance yourself.

In addition, timeshares give you guaranteed accommodations in your favorite vacation destination. You won’t have the hassle of finding a hotel with the availability you need.

Finally, in many cases, you can rent your timeshare to someone else if you cannot take a vacation. However, you’ll need to check your contract to ensure this is allowed.


Although you don’t have to worry about maintenance fees, the annual maintenance fees can add up. This is mainly due to annual increases, which you have no control over. In some cases, you can pay over $500 per year for maintenance fees alone.

You might also have to pay other fees like membership fees or a share of real estate taxes. So it’s essential to read the fine print of any timeshare contract and not get swept up in the luxuries.

Timeshares are also difficult to sell, and many times you’ll have to sell at a discounted rate due to the high amount of timeshares on the market. The high fees and low flexibility in vacation weeks also make it difficult to sell.

If you sell at a loss, the IRS doesn’t allow you to claim the capital loss as they do on other properties.

Finally, canceling a timeshare can be extremely difficult due to numerous rules like recession periods and limited alternative options. You’ll usually need the help of a company like Lonestar Transfer to help you through the cancellation process.

Buying a Timeshare

Now that you have a detailed answer to the question “what is a timeshare,” you’ll better be able to decide if it’s the right choice for you.

Before you commit to a timeshare, read the fine print of the contract before you sign, and make sure you understand the fees and consequences of selling.

To learn more helpful lifestyle tips, check out the rest of our blog today!

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