Timeshares allow you to purchase the right to use a vacation property for a specified amount of time each year. There are two main types of timeshare ownership – deeded and right-to-use. Here’s what you need to know about how they differ:
Deeded Timeshares
With a deeded timeshare, you purchase a fractional ownership interest in a specific property. This gives you the right to use that property for a set period of time each year, typically 1-2 weeks.
A deeded timeshare works just like any other real estate transaction – you receive a deed showing you own a portion of the property. This deed gets recorded with the local land records. You can sell, rent, will, or gift your specific timeshare interval just like any other real estate.
Right-To-Use Timeshares
With a right-to-use timeshare, you purchase the rights to use a timeshare property for a specific number of years, but you do not own any real estate. These are sometimes referred to as vacation clubs or vacation leases.
Right-to-use timeshares involve much lower upfront costs than deeded timeshares, but you do not get a deed or real ownership stake. Rather, your purchase gives you pre-paid vacation lodging for the time period specified in a contract, often 10-30 years.
Right-to-use timeshares are not investments and do not appreciate in value. But the major advantage is the lower upfront cost compared to deeded timeshares.
Key Differences
Ownership:
– Deeded timeshares provide deeded/real property ownership recorded with local land records. You own a portion of the physical property.
– Right-to-use timeshares do not involve any real property ownership – you simply purchase rights to use via a contract.
Expenses:
– Deeded timeshares require payment of annual maintenance fees that typically increase each year. These cover property taxes, maintenance, and management costs.
– Right-to-use timeshares do not have recurring fees, just lower upfront purchase costs. You may have minor transaction/reservation fees.
Asset Value:
– Deeded timeshares can appreciate in value like other real estate. This allows for potential rental income and profits when selling.
– Right-to-use timeshares have no resale value since they are not assets. You cannot sell or rent out rented timeshare weeks.
Duration:
– Deeded timeshares continue indefinitely – the deed remains in your ownership permanently.
– Right-to-use timeshares expire after the contract term ends (usually 10-30 years). Then all usage rights are lost.
Flexibility:
– Deeded timeshares allow more flexibility – you can sell, gift, bequeath, or rent out your owned weeks.
– Right-to-use timeshares only allow you to use the property yourself during the contract term. No transfers or rentals.
Deeded timeshares offer more upside potential and flexibility but have higher ongoing costs. Right-to-use timeshares provide temporary usage rights for much lower upfront prices.
If you decide you no longer want your timeshare, specialized timeshare exit companies, such as ACA Group, can help you legally and permanently transfer or terminate your ownership. These services will negotiate an exit on your behalf – whether via transferring your deed to a new owner, surrendering it back to the resort, or terminating the contract.
The exit company handles all legal work and fees. This makes relinquishing your timeshare much easier compared to trying to navigate it yourself. Using an exit company is typically faster and more effective than attempting a timeshare exit alone. And it frees you from future timeshare payments and obligations. Just be sure to use a reputable company with a proven track record of successful exits.
