Today, timeshares are very popular when it comes to planning a trip or going on a vacation. It has become an ideal choice for some people regardless of the reason. Although it is not for everyone, the fact that the number of people prefer it over other accommodations is growing, it clearly shows that there’s something about it. Something that appeals to people, but no matter what, one thing is for sure. Timeshares are now part of the society and they are to stay.
What are Timeshares and the Way They Work
A timeshare is a vacation real estate property that has a shared ownership model. It is usually a vacation property shared by multiple owners who purchased usage allotments that is generally measured in weekly (one week) increments. Timeshare is typically vacation type properties such as vacation resorts, camping grounds, luxury rest houses, etc.
It is possible also to rent a timeshare from an owner instead of buying one.
The principle of time-sharing is simply explained as a kind of fractional ownership. A model of ownership where buyers purchase the right to exclusively use or occupy the property during a specified period every year. The period is represented as one week. Ownership models used in timeshares are usually applied in vacation properties because owners may only want occasional occupancy of the property.
Two Kinds of Timeshare Ownership
There are two types of ownership when it comes to timeshares. Ownership structure with different conditions. All buyers must agree to the same kind of ownership model and everyone should abide by the rules. The two types of ownership are very different that is why buyers should confer and agree.
- Ownership with Shared Deed – In a share deeded type of ownership each part-owner has a percentage share of the property, physically. The percentage is based on the purchased time period. For example, a resort unit sold with timeshare increments will have 52 deeds in total. If the part-owner purchased for one week specified period, the share of the buyer will be 1/52 interest of the unit. In this type of ownership the interest is often held in perpetuity, it can be resold to another party.
- Ownership with Shared Lease – The second type of ownership has shared leased interest structure. A part-owner is entitled with the use of the property in terms of fixed or float weeks for a specified number of years. Here, the developer still holds the deed of the property which makes the reselling restricted. Lowering the value of the interest.