A timeshare is the name given to piece of real estate where a number of individuals share ownership in the subject property. As opposed to a standard home where an individual or, for example, a husband and wife share ownership, a timeshare is almost always owned by a number of people who have no relation to one another whatsoever.
Timeshares can be sold or passed down to heirs as with other forms of real estate. Many people not only look at their timeshare as a means to have a great vacation, but they also view it as an investment. Should they decide not to use the property for their own usage, they can rent their timeshare to others. Also, the value of many timeshares increases with the passage of years, so long as the destination remains attractive.
Most timeshare agreements allow owners to trade and swap locations. For instance, an owner in the Bahamas could swap his weekly ownership for a similar timeshare in Hawaii. Many major hotel companies, such as Marriott International, manage and sell timeshares at resort locations.
There are two basic types of timeshare plans:
? Deeded Timeshare
True property ownership with deed recorded in the county where the property exists. This type of property has the same rights of ownership accorded to it as other deeded real estate. The owner may sell, rent, bequeath, or give away the property. A deeded timeshare functions just like a home. The owner owns the property forever, unlike a leased timeshare. With this type of property, an owner can will the property to loved ones.
? Non-Deeded Timeshare
A non-deeded timeshare is more analogous to a rental or lease. You do not own the property, but get to use the property as agreed in the Time share agreements for a certain period of years.There are a number of considerations you should take into account when purchasing a timeshare.
Why A Timeshare?
What is the purpose of your purchase (e.g., investment, vacation, etc.)? And how long do you plan to use the timeshare? If it is for investment, you should have an exit strategy--i.e., when, where, to whom, and for how much are you going to sell the timeshare? Generally a deeded timeshare would be a better investment than a non-deeded time share and is more easily transferable (of course, one should check into any restrictions on resale of deeded timeshares, or subleasing for non-deeded timeshares). A non-deeded timeshare, however, may be better if you're looking for something for the family to enjoy. For example, maybe you want a Florida condo for a week each of the next three summers--but who knows where you might want to go after that? With a three year non-deeded timeshare after your interest expires you're free to move on just like any other
rental agreement. |
