Timeshare occupancy rates reach over 80% while hotel occupancy is only around 66%. More people are opting for timeshare contracts for when they want to go on vacation.
However, a vast number of people will own a timeshare without understanding it fully. This is a mistake you don’t want to make.
Read on to learn what you need to know about timeshare contracts.
How a Timeshare Contracts Work
Timeshare contracts come in two varieties. Both contracts outline details like who owns the property and your visitation rights.
Share Deeded Contract
When getting a timeshare, you could opt for a share deeded contract. This divides the property between you and every other owner of the same timeshare.
For visitation, you’ll be assigned a specific week or multiple weeks where you can use the property. You can transfer ownership through selling or gifting with this contract.
Before exiting a timeshare contract, read this guide and speak to a timeshare attorney.
Shared Leased or Right-to-Use Contract
This second type of timeshare contract, shared lease/right-to-use, gives no ownership rights to the people paying for the timeshare. This means you cannot sell your contract or get any real estate value from it.
Payers can use the timeshare for an agreed-upon number of years.
Types of Timeshares
The type of timeshare you have will depend on the contract you choose. Be sure to read the fine print so that you get the best deal for yourself and your family.
A fixed-week timeshare is the original type of timeshare that dates all the way back to the mid-1970s. With this timeshare, you have a guaranteed date, location, and sometimes even unit, to visit each year.
You can cancel a timeshare like this, but getting your money back without the help of a timeshare lawyer is difficult.
This is the best option for those who enjoy a good routine and stability. However, there is not much wiggle room to change things around.
The biggest plus is that you’ll never compete with travelers visiting the same location as you.
The floating-week timeshare option was created to give owners more flexibility. Payers can use their timeshare for one week during a certain season or point in the year.
Yet, you will be competing with the other timeshare owners for the most desirable weeks. This makes it harder to book your dream vacation.
Point System Timeshare
Through a point system timeshare, owners can gain several points each year or every other year. These points allow them to redeem for stays at different properties.
The process is similar to hotel points or frequent flyer miles. The places that have a higher demand will cost you more points.
You can purchase points upfront and the prices will vary from different timeshare companies. Only buy the points you think you’ll use in a year.
Understanding Timeshare Contracts
If you are considering signing a timeshare contract, it is important to completely understand the fine print before doing so. Timeshare contracts are tricky and often hard to get out of, so don’t make an impulse decision. Timeshares aren’t for everyone so decide if a yearly vacation in the same place is the right choice for you. For more interesting reads, check out the other articles on our blog.