Generally speaking, a timeshare is the split use of a property by a group of owners, allowing usage as determined by the percentage one has bought in for. The property may be a residential project such as a condominium or a home, or it could even be a houseboat, RV, yacht, airplane, etc. The information that follows is general information regarding the usage of condominiums.
Fixed Week
- Each year you own the right to occupy the unit during the specific week you purchased (weeks calendar)
- Usually this will be in the same unit each year
- Price is generally determined by the popularity of the week you purchase - holiday weeks, summer at a coastal resort, peak ski season, etc. will all generally fetch a higher sales price.
Floating Time
- Each year you own the right to occupy the unit for a set percentage of time (determined by how many week(s) or credits/points you own), but you must contact the resort to book the time you would like to use.
- More flexible than being locked into a set week
- As all owners have the same rights, you may not always be able to book the time period/location you wish to use.
Rotating Schedule
- Each year you own the right to occupy the unit for a fixed week(s) based on a rotating schedule
- Allows all owners to utilize the resort during peak times
- During some years, you may find it difficult or less desirable to use your time
Deeded
- Most often, you will have ownership of a specific unit during a specific week each year (ie. Unit 744, week #1)
- Less often, you will own a fraction of a given unit (ie. 1/52nd of unit 744) allowing you to book your time at the resort based on when you choose and whether or not the unit has already been reserved by one of the other owners
- Recorded with the local governing agency (Recorder / Assessor)
- Deeded property is ownership of real estate, allowing you the right to sell the unit, give it away, or bequeath it to heirs, just as with other real property
Right-To-Use
- Allows the owner to use the property for a set period of time
- Often used in countries where foreign ownership of real estate is limited
- Ownership may be for perpetuity or for a set number of years - at the end of which the usage rights revert back to the property owner
- Generally speaking, can be sold, donated, or bequeathed; however, the expiration date of the contract remains the same (some contracts will not have a set expiration date or may be renewable)
***For a more in depth look at timesharing, you may find joining the Timeshare Users Group very beneficial.
Points-based timesharing seems to have evolved as the industry's answer to owner desire for increased flexibility and their own need to liquidate less desirable weeks within the system. What has come about seems to be a win-win situation for both owners and developers. Some of the highlights are:
- You are allowed to book your usage each year at the resort of your choosing based on your own individual needs (dependant on availability and booking restrictions)
- You control your costs - invest in fewer points / credits allowing you access to the program with lower initial investment and lower annual maintenance fees, or invest in a larger account for more usage
- Book as little as one day
- Book in any size unit
- Points / credits may possibly be used for other goods and services (depending on your program)
WorldMark is a points-based (referred to as Vacation Credits), right-to-use, recurring membership which is renewed in perpetuity and may be willed to one's heirs.
- You are not given a set period of time (a specific week) to use the Club, but rather may book dates available as governed by Club Guidelines
- You do not "own" in any given property - instead, you have the Right-to-use all properties within the Club
- Each year your credits are renewed and deposited into your account on the first day of your anniversary month - all you need to do is to pay your maintenance fee, book your usage dates, and EnJoY!
- WorldMark may be willed to your heirs - a lifetime of vacations for you to enjoy, and then you may give it to your children, friends, or a charity for them to utilize as well
Trendwest is currently the exclusive developer and marketer of WorldMark the Club. As such, they decide where the resorts will be built, develop them, and then turn them over to WorldMark free from debt. In exchange, WorldMark allows Trendwest the right to sell the Vacation Credits associated with the property. This relationship has allowed Trendwest to become a leader in the Vacation Ownership industry and allowed WorldMark the Club to grow to over 50 resorts throughout the world.
Pros
- Flexible - you choose the unit size, date, and location
- Forever - can be sold or given to others
- Growing - over 50 resorts currently in the system located throughout the World
- Opportunity - allows you to share the experience with family and friends
- Expandable - you can buy / sell / rent credits as your needs dictate
- Stable - points required to utilize resorts stay static
- Bonus Time / Inventory Specials - allow owners to utilize the resorts at a discounted rate without using credits
- Fax Time - allows owners to book up to 13 months out without having to utilize credits
- Affiliates - Associate and Affiliate agreements with other companies allowing us use of their properties utilizing our WorldMark credits
- Adventure Club - allows owners to use their credits for goods / services
- Tradable - a week can be deposited and exchanged to over 10,000 locations throughout the world and WorldMark units currently trade well
- Quality - WorldMark resorts have a strict quality standard they adhere to, insuring each stay is always as good as the last
- Customer service - most owners will attest to the amazing Customer Service they have received from WorldMark. While they are not always perfect, they do seem to strive to make it right!
Cons
- Trendwest decides when / where to build (or acquire) new resorts
- Trendwest policy can affect the desirability of the Club
- Insufficient communication with owners - management does not seem to feel the need to explain themselves, nor to have owners hear it from them first
- Owners do not get to make all the decisions that may affect their Club
- Some booking guidelines may be construed as restrictive
While for the most part, timesharing does not have the negative connotation it held years ago, prospective buyers still wonder if it is a good investment. In deciding whether or not timesharing is a suitable fit for you, there are many things that must be taken into consideration.
- Purchase Price - developer vs. resale
- Annual maintenance fees (current and historic)
- Usage fees - utility surcharges, housekeeping costs, etc
- Exchange membership + fees
- The ability to rent out your week or credits (very important to do due diligence)
- Other benefits - some of the benefits of vacationing this way include: decreased costs associated with eating each meal out, spacious and relaxing environment, room to bring friends and family, and more luxurious accommodations
VS.
- Amount of usage
- Equivalent cost of rental
- Resale amount should you need to liquidate
- Number of years left to utilize the timeshare
- Ability to sell or bequeath to others
- Opportunity cost - the amount of interest you would be accruing if you invested the $$$ spent on purchasing the timeshare
Once you look over all these factors and start assigning number values to them, you can begin to get an idea of whether or not timesharing will make financial sense to you. It may also be prudent to revisit these ownership factors at a later date to see if anything has changed significantly.
A note about rentals:
Few people are able to rent out their timeshares each year for significantly more $$$ than their annual maintenance fees. While salesmen tout the ability to recoup your original investment via rentals, this is usually not a reasonable expectation. Some things to look for should you need to rent out your unit would be size/location and a specific holiday/event week. For example, a unit in the French Quarter during Mardi Gras; Raceweek in Daytona; New Year's in Las Vegas; 4th of July at any beach resort: any of these may be beneficial as a rental. Other weeks may also be in high demand, but please take the time to research which weeks these may be before you choose to buy.
***For a more in depth look at timesharing, you may find joining the Timeshare Users Group very beneficial.
