Timeshare is when a group of people share the cost of a vacation home. These individuals do not know each other in most cases but have the same passion for vacationing in a particular place. Although you will hear timeshare called "interval ownership", "vacation ownership", or "holiday ownership", the concept is all the same.
Although timeshares can cover any type of accommodation such as house, apartment, houseboat, villa, and so on, most often you will see timeshares as condominiums. The way it works is that the building is bought outright and is then subdivide into 52 separate units of time, one for each week of the year. However, only 51 units of time are sold so the remaining week can be used for any annual maintenance or remodeling.
Each owner has ownership rights and privileges of the shares purchased. The difference in buying a home and timeshare is that although you make an investment with a timeshare, the profit and equity actually goes to someone else. However, when you take you favorite vacation, you are staying in your "second home".
The first timeshare in the United States was on the island of Kauai in Hawaii. This timeshare offered a 40 year lease that began in 1969 covering Lake Tahoe, California. From that time, the idea of timeshare exploded. Today, you can find timeshare options all over the country.
If you are considering going in on a timeshare, you need to understand how it works. First, the exchange will be value for value and as one of the owners you need to be somewhat flexible. The reason is that you may not always get the week or weeks you want. Remember that timeshares are similar to hotels, meaning you have to work with what is available.
With timeshares there are three primary programs available ? Fee Simple, Leasehold, and Right-to-Use (RTU). With the Fee Simple, you would buy an actual deeded interest in real estate. This is then recorded with the courts and any other authorities so you would receive a title in perpetuity.
With a Leasehold timeshare program, you would have much the same basic ownership rights, interests, obligations, and so on, as you do with the Fee Simple option. However, with the Leasehold, there is a specific expiration date. In this case, it could include a first right to renew ownership prior to the expiration. Therefore, if you go this route, you should check for this, as you may want to have the option of renewing ownership without losing it to someone else.
Finally, there is the Right-to-Use timeshare program. For this program, unlike Fee Simple or Leasehold, you would purchase only the right to use a specific unit or unit size every year but would not own interest in the real estate. This right would expire after a specified number of years at which time the property reverts back to the property owner or developer.
Although a timeshare is not for everyone, they work in many instances. Just imagine going to your favorite ski resort year after year and opening the door to your own home. You can add your own decorative touches, come and go as you please, invite friends and family, and know that as long as you are involved with the program that is your home at the resort. In many cases, you will get to know your neighbors that also have timeshares, making new friends along the way.