Timeshare

Why Brits are tearing up their timeshares

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Because you own this timeshare unit, your vacation accommodations are guaranteed every year. Timesharing works for many travelers, because you get the benefits of a high-end vacation home without the high cost of expenses and upkeep.

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Most timeshare ownership programs also now offer the option to exchange your timeshare for a vacation at a different resort in a different location—so you are not tied down to the same spot year after year. In the last two decades, the definition of the term timeshare has expanded to include other forms of joint ownership of vacation properties outside of the traditional week at a home resort , which is why the synonym "vacation ownership" may be a more apt explanation of the types of timeshares now available to new buyers. It is important to understand how each type of timeshare works in order to make an educated decision when it comes to your purchase.

In this section, we will review the types of ownership contracts, types of timeshare ownerships, and usage frequencies available. There are two different types of timeshare ownership contracts available for purchase: Deeded ownership is like traditional real estate ownership in the sense that once you purchase the timeshare, you own it for the rest of your life or until you sell it.

At resorts that sell deeded timeshares, once all the units and weeks have been sold, an HOA typically controls the operations of the resort on behalf of all the individual owners. By contrast, right to use RTU ownership is a system in which you purchase the right to use a specific unit or week at a resort for a set period of time often between 10 and 50 years.

The expiration date for your ownership is written into your contract, at which time you are no longer legally responsible for the timeshare. With both deeded and right to use contracts, there are a number of types of timeshare ownership you may encounter. Fixed week timeshares were the most common form of timeshare ownership prior to the start of the 21st century. Fractionals are similar to fixed week timeshares, except that the usage rights of each owner are typically for larger blocks of time such as four to twelve weeks per year. Fractionals are also typically very high-end and, in some cases, may be standalone homes or condos rather than resort suites.

Floating week timeshares can be deeded or right to use. Seasons are predefined as ranges of weeks for instance, weeks and vary from resort to resort. With a floating week, you contact your resort every year to secure any available week within your season, allowing for more flexible travel dates. Typically, an owner purchases an allotment of points within a vacation club which is essentially a network of affiliated resorts.

Unit sizes and dates at each resort within the network are assigned a points value based on demand, giving owners the flexibility to book multiple shorter trips or a single longer stay, as well as choose a smaller or larger unit size based on their needs that year. Points-based timeshare ownerships also often offer the flexibility to roll over all or a portion of your unused points to the next calendar year.

With any of the above types of timeshare ownership, you can also typically choose the frequency with which you would like to enjoy the benefits. Keep in mind that the frequency of usage rights as timeshare owner will increase the cost of that ownership. Biennial usage gives you the right to use your ownership benefits every other year.

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Triennial usage gives you the right to use your ownership benefits once every three years. This is the least common usage frequency for timeshare ownership. There are many things that set a vacation timeshare resort apart from the average hotel, but the main difference is the quality of the actual rooms available. Compared to traditional hotel rooms, vacation timeshares are far more deluxe and can range in size from studio units to suites with three or more bedrooms that can often sleep ten or more guests.

Here is a head to head comparison of common features you will find in most hotel rooms and those you will find in most timeshares. As you can see from the list, timesharing offers additional conveniences and comforts not available to travelers who stay exclusively in hotels.

In addition to the in-suite amenities listed above, timeshare resorts also provide an extensive range of on-site activities and amenities. Many resorts offer championship golf courses, ski mountain access, equestrian centers, water complexes, world-class spas and even five-star restaurants. The abbreviated answer is yes. But here are some of the main reasons that vacation timeshares are a savvy option for sophisticated but frugal travelers:. As you may already know, timeshares are commonly purchased on the spot following a sales presentation at a timeshare resort.

With Fee Simple Ownership , security increased, along with the costs, which now had to include HOA fees, and maintenance fees: The most common unit of sale is a fixed week; the resort will have a calendar enumerating the weeks roughly starting with the first calendar week of the year. An owner may own a deed to use a unit for a single specified week.

For example, week 26 normally includes the Fourth of July holiday , week 51, Christmas and so on. If an owner owned Week 26 at a resort he or she could only use that particular week every year. Sometimes units are sold as floating weeks. The ownership will be specific on how many weeks the owner owns and from which weeks the owner may select for the owner's stay.

An example of this may be a floating summer week where the owner may request any week during the summer season, generally weeks 22 through In this example there would be competition for prime holidays such as the weeks of Memorial Day , Fourth of July , and Labor Day. The weeks when schools may still be in session would not be so high in demand. Some floating contracts exclude major holidays so they may be sold as fixed weeks. Some are sold as rotating weeks, commonly referred to as flex weeks.

In an attempt to give all owners a chance for the best weeks, the weeks are rotated forward or backward through the calendar, so in year 1 the owner may have use of week 25, then week 26 in year 2, and then week 27 in year 3. This method gives each owner a fair opportunity for prime weeks, but unlike its name, it is not flexible. A variant form of real estate-based timeshare that combines features of deeded timeshare with right-to-use offerings was developed by Disney Vacation Club DVC in Purchasers of DVC timeshare interests, whom DVC calls members receive a deed conveying an undivided real property interest in a timeshare unit.

Each DVC member's property interest is accompanied by an annual allotment of vacation points in proportion to the size of the property interest. DVC's vacation points system is marketed as highly flexible and may be used in different increments for vacation stays at DVC resorts in a variety of accommodations from studios to three-bedroom villas. DVC's vacation points can be exchanged for vacations worldwide in non-Disney resorts, or may be banked into or borrowed from future years. Resort-based points programs are also sold as deeded and as right to use.

Points programs annually give the owner a number of points equal to the level of ownership. The owner in a points program can then use these points to make travel arrangements within the resort group. Many points programs are affiliated with large resort groups offering a large selection of options for destination. Many resort point programs provide flexibility from the traditional week stay.

Resort point program members, such as WorldMark by Wyndham and Diamond Resorts International , may request from the entire available inventory of the resort group. A points program member may often request fractional weeks as well as full or multiple week stays. The number of points required to stay at the resort in question will vary based on a points chart. The points chart will allow for factors such as:. These larger units can usually accommodate large families comfortably. Units normally include fully equipped kitchens with a dining area, dishwasher , televisions , DVD players , etc.

It is not uncommon to have washers and dryers in the unit or accessible on the resort property. The kitchen area and amenities will reflect the size of the particular unit in question. Units are usually listed by how many the unit will sleep and how many the unit will sleep privately. Traditionally, but not exclusively:.

Sleep privately usually refers to the number of guests who will not have to walk through another guest's sleeping area to use a restroom. Timeshare resorts tend to be strict on the number of guests permitted per unit. Unit size affects the cost and demand at any given resort. The same does not hold true comparing resorts in different locations. A one-bedroom unit in a desirable location may still be more expensive and in higher demand than a two-bedroom accommodation in a resort with less demand.

An example of this may be a one-bedroom at a desirable beach resort compared to a two-bedroom unit at a resort located inland from the same beach. The timeshare will often provide incentives for the prospective buyer to take a tour of the property: The vacationing timeshare prospects are presented these incentives in exchange for the promise to the marketing company that they agree to take a timeshare tour before the completion of their stay. If the vacationing prospects refuse to take the tour, they may find the price of their accommodations significantly increased, perhaps be directed to leave the property, and all incentives withdrawn or voided.

The prospective buyers hereby referred to as prospects are seated in a hospitality room a term designated by the land sales industry in the 60's with many tables and chairs to accommodate families. The prospects are assigned a tour guide. This individual is usually a licensed real estate agent, but not in all cases.

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The actual cost of the timeshare can only be quoted by a licensed real estate agent in the United States, unless the purchase is a right to use as opposed to an actual real estate transaction via ownership. Since timeshares are sold internationally, these laws vary from venue to venue.

After a warm-up period and some coffee or snack, there will be a podium speaker welcoming the prospects to the resort, followed by a film designed to dazzle them with exotic places they could visit as timeshare owners. The prospects will then be invited to take a tour of the property.

Depending on the resort's available inventory, the tour will include an accommodation that the tour guide or agent feels will best fit the prospect's family's needs. After the tour and subsequent return to the hospitality room for the verbal sales presentation, the prospects are given a brief history of timeshare and how it relates to the vacation industry today. During the presentation they will be handed the resort exchange book from RCI , Interval International , or whatever exchange company is associated with that particular resort property.

The prospects will be asked to tell the tour guide the places they would like to visit if they were timeshare owners. The rest of the presentation will be designed around the responses the prospective buyers give to that question. If the guide is licensed, the prospect will be quoted the retail price of the particular unit that best seemed to fit the prospective buyer's needs. If the tour guide is not a licensed agent, a licensed agent will now step in to present the price. If the prospect replies with "no", or "I would like to think about it", the prospect will then be given a new incentive to buy.

This incentive will usually be a discounted price that will only be good today good today only is an untrue statement, and has been used as a sales closing device since day one of the timeshare industry's inception. If again, the reply is "no", or "I would like to think about it", the sales agent will ask the prospect to please talk to one of the managers before the prospect leaves.

It is at this moment that the prospect realizes that the tour has actually just begun. A sales manager, assistant manager or project director will now be called to the table. This procedure is called: This tactic is commonly used as a sales ploy, because the resort is not interested in reselling already deeded property. Similar to the automobile sales industry , the manager and salesman know beforehand exactly what the lowest price is that will be offered to the prospect, well before the prospect has arrived for the tour.

If one incentive doesn't move a prospect to purchase, another will follow shortly, until the prospect has either purchased, convinced the usually very polite sales crew that no means no, or has gotten up from the table and exited the building. Timeshare sales are often high-pressure and fast-moving affairs.

Some people get caught up in the excitement of the sales presentation and sign a contract, only to realize later that they may have made a mistake.

What is a Timeshare?

Federal Trade Commission mandates a "cool off period" that allows people to cancel some types of purchases without penalty within three days. In Florida , a new timeshare owner can cancel the purchase within ten days. However, such a waiver is not legally enforceable anywhere in Mexico or the United States. In recent years, a timeshare cancellation industry has formed by companies who provide one simple service: However, some of these companies are suspected of being fraudulent.

It is more than likely that a new timeshare owner could have purchased the same product from an existing owner on the timeshare resale market for drastically less than what the buyer paid from the resort developer, simply by doing a computer search. In many cases, the exact or similar accommodation purchased, will be happily transferred by an unhappy timeshare owner.

The reason for this anomaly is that the lion's share of the cost of a new timeshare are sales commissions and marketing overhead, and cannot be retrieved by the timeshare owner. Another reason a new owner might want to cancel, is perhaps the buyer has made a large financial commitment in the excitement of the sales presentation, and now at home, the new owner has buyers remorse. The new timeshare owner may also feel they haven't had the time to research the company the timeshare was just bought from, because it was purchased during the first visit to the timeshare resort.

Critics contend timeshare units are overpriced. Many timeshare owners complain about the annual maintenance fee which includes property taxes being too high. Timeshare developers contend that pricing compared to staying at hotels in the long term is projected to be lower to the timeshare owner. However, a hotel guest does not have a monthly vacation mortgage payment, upfront cost, fixed schedule, maintenance fees, and preset vacation locations. Many owners also complain that the increasing cost of timeshares and accompanying maintenance and exchange fees, are rising faster than hotel rates in the same areas.

The industry's reputation has been severely injured by the comparison of the timeshare salesman to the used car salesman , because of the sales pressure put on the prospective buyer to "buy today". Many have left a timeshare tour complaining of being exhausted by the barrage of salespeople they had to deal with before they finally exited the tour. The term "TO", or " turn over " man, was coined in the land industry, and quickly evolved to the timeshare industry. Once the original tour guide or salesman gives the prospective buyer the pitch and price, the "TO" is sent in to drop the price and secure the down payment.

However, the biggest complaint is that timeshare reselling by the private owner is almost impossible to do. Timeshares are generally treated as real property and can be resold to another party. However, timeshares do not appreciate in value, and therefore should not be considered a money-making investment. Resale price can be considered a market price of the timeshare. There are brokers and agents who specialize in reselling timeshare units on behalf of their owners. This marketing can take the form of printed materials, Internet postings, radio and television advertisement, and direct telephone solicitations.

Most of the fees associated with third party resales are up-front and non-refundable, regardless of whether the unit sells, or for how much. Depending on the terms of the timeshare contract, an owner may rent their week or interval to another party in exchange for payment to the owner. There are third parties that will try to rent timeshares on behalf of their owners as a one-time event or an annual occurrence. In addition to a hands-off experience for the owner, third parties typically handle the money transfer as well. The obstacle of finding a suitable renter remains the same as with any real estate owner, with the usual associated liabilities renting any real property: Charities sometimes accept timeshare donations.

They must be able to convert the timeshare into cash to benefit from the donation. Charities do not want to become obligated as owners and assume the same annual fees that face the donors. Unless a charity can convert it to cash by resale or rent, the acquisition can become a liability instead of an asset.

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