In any given year, around 100 million Americans go on vacation each year. While some of them will go to a vacation property they own outright, ownership like that is out of reach for many people. It’s just not financially practical for every family to own and maintain a second property strictly for time away.
Instead, most families simply book hotels and fly or drive out to their vacation destinations. The middle ground between full ownership of a vacation property and hotels or imposing on friends is a timeshare or vacation ownership.
Wondering what a timeshare actually is and what pros and cons come with it? Keep reading for a quick breakdown.
What is a Timeshare?
Timeshares follow two essential models. There is a lease model. In that model, you divide the right to use the timeshare among a group of other leasees. It’s usually a time-limited approach that designates your right to use for a specific period of years.
You only get a right to use the property, but cannot modify, sell, or rent the property.
The other model is an ownership model. This approach is more of an investment opportunity. You share legal ownership of the property or unit with other owners. In most cases, you get a designated week of the year that the property is for your use.
This model lets you give the timeshare ownership to an heir, rent the space for your week, or sell off your ownership stake.
Timeshares offer several key benefits. It gives you an established place to go on vacation, which may encourage you to actually take a vacation when you might otherwise skip it.
It’s also an opportunity to make money under the ownership model. If you know you won’t use the timeshare this year, you can rent out the space for your week and pocket the profit.
It’s less work than maintaining a vacation home that you own. It can also save you money in the long-term on hotel and restaurant costs.
Timeshares are not without their problems. They can often prove hard for owners to sell. After all, you need a buyer who wants to go on vacation during the week you have a claim on the property. Although, there are legitimate timeshare exit options.
They can also come with hefty upfront costs. You’re on the hook for any annual maintenance and administrative fees for as long as you own your part of the timeshare.
Vacation Ownership and You
Taking vacations is good for your mental and physical health. Vacation ownership gives you an opportunity to lock in a time and place to take those vacations every year. That can help ensure you plan a vacation instead of cashing out vacation days.
On the flip side, you may find it difficult to sell your timeshare once you have it. There are also ongoing and upfront costs to keep in mind.
Looking for more travel tips? Check out the posts over in our Travel section.