Own (Part of) Paradise

Types of Timeshares
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If you've been to a timeshare sales presentation, you may remember hearing enough new terms to make your head spin. But if you can learn timeshare lingo, you'll have a better chance of getting what you want.

Timeshares come in three basic categories. Most U.S. timeshares are fee-simple, or deeded property—real estate that can be rented, sold, or willed. A leasehold timeshare expires after a certain time period or number of uses. Outside the States, you'll also find many right-to-use timeshares, which grants timeshare owners the right to use property for a specific length of time, often 30 years.

Owners can also choose how to use a timeshare. Many timeshares are fixed-week purchases. Buy a fixed-week timeshare in Hawaii for the third week of December, and that week will be yours, each and every year. Fixed-week timeshares can be terrific for people who have a consistent schedule; they also simplify matters, as your week will be yours unless you want to exchange it.

A floating week gives owners the choice of one week during a certain season. This system offers flexibility, but floating week owners have to plan ahead and reserve, often months in advance, their desired vacation times, especially if they want a high-demand week.

Fractional timeshares come in multi-week increments. There's been a huge surge in high-end fractionals, like the Ritz-Carlton Residence at Aspen Highlands. Here, the price ranges from $190,000 to $525,000 (with annual dues starting at $9,890). Ultimate luxury goes along with the price: a personal concierge can have the fridge stocked, dinner reservations set, and lift tickets waiting when you arrive.

One of timesharing's newest developments is the points system. Instead of purchasing weeks, you purchase timeshare points, which can often be split up for long weekend stays throughout the year. Points give people with smaller chunks of vacation time a chance to travel, but they can be complicated to use.

No matter how a timeshare is used, it should never be considered a real-estate investment in the traditional sense. A timeshare's value comes from vacationing over time. If you buy a $15,000 timeshare and spend $500 each year on maintenance fees, a ten-year ownership would cost approximately $20,000. If you stay in a fancy hotel room, you might spend up to $300 each night. Over a decade, the same ten weeks of vacation could cost $22,000.

"Don't buy for today, and don't buy for next year's vacation," says David Skinner, president of the Holiday Group. If you're going to buy, do it with the goal of a long-term commitment to annual vacations.


Published: 1 Mar 2006 | Last Updated: 15 Sep 2010
Details mentioned in this article were accurate at the time of publication

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