Types of Timeshares
You already know how often you vacation and how much you tend to spend on your family's accommodations. Before you consider timeshare resort destinations (which you will read more about in upcoming chapters), you should think about exactly what kind of timeshare you want to buy. Your choices will be deeded or right-to-use properties, which you will be able to purchase in either weeklong units of time or in points that are similar to airline frequent-flyer miles.
Deeded Properties
A deeded timeshare is exactly what it sounds like: a timeshare that comes with a deed. When you buy a deeded timeshare, you are gaining ownership rights to your timeshare unit. This — at least in the United States — usually means that you own your timeshare forever (or “in perpetuity,” as the lawyers like to say), and that you can sell it or pass it on to your children or grandchildren just as you might with any other type of real-estate investment that you purchase. Deeded timeshares also often give you the right to rent your unit during years when you cannot use it.
Right-to-Use Properties
A right-to-use timeshare unit is also exactly what it sounds like:A timeshare that gives you the right to use somebody else's property for a certain number of years or for a specific number of times.
FAST FACT
Right-to-use timeshares do not come with deeds, and thus are not transferable upon your death. You may be able to rent your right-to-use timeshare during the years when you cannot use it, but you will have to check the fine print of your specific contract for details about that.
For instance, you might buy a timeshare unit that gives you rights to one week per year for the next twenty years. Or you might buy a timeshare unit that gives you the right to use it twenty times during the next twenty years, meaning you could use up all of your usage rights in one year if you wanted to vacation for five months straight.
No matter whether your timeshare unit is a deeded or a right-to-use property, you will be buying either time in the form of weeks or time in the form of points that you cash in.
Weeks-Based Systems
Timeshare units traditionally have been sold in the form of weeks, meaning that you buy the right to use your unit for a specified number of weeks each year (most often, one week).
Most timeshare units are designed for annual use, though there are some plans that allow you to become a biennial timeshare-unit owner. This means that you end up being able to use your timeshare unit every other year — usually designated as odd or even year usage. Biennial timeshares typically cost less than annual timeshares, simply because you are purchasing less usage time.
There are two kinds of weeks: fixed and floating. Each has its benefits and its drawbacks, depending on how you like to vacation.
Fixed Weeks
Fixed weeks are seven-day units of time that you own at your home resort and that do not change from year to year. If you buy the third week of the year at a Colorado resort, you can show up at that Colorado resort every third week of every year until the end of your contract, or forever if it is a deeded property. (You can see the weeks calendar that timeshare resorts use in Appendix B.) You sometimes will have to make reservations annually, just to let your resort and exchange company know that you do, in fact, plan to use your week, but short of that, you will have few other tasks in terms of using your timeshare unit each year.
A common misperception is that when you buy a fixed week, you absolutely must take your timeshare vacation during that week every year. This is
E-ALERT
Buying a fixed week of timeshare does not mean that you have to take your vacation during the same week every single year for the next thirty or forty years. It simply means that you own a specific week of time, which you are allowed to trade for other people's timeshare units during any season of the year.
In fact, many people buy high-demand fixed week timeshares for the sole purpose of trading them. The week between Christmas and New Year's Day, for instance, is very popular in Orlando because children are out of school and many families want to visit Walt Disney World. If you are the person who owns that fixed week at a popular timeshare resort near the Magic Kingdom, you should have very strong trading power should you want to exchange your week for someone else's.
Other people with an eye on the worldwide marketplace might buy a high-demand week during the middle or end of August in Spain's Canary Islands, where many European travelers enjoy taking their vacations during that time of year. Americans who own such timeshares may never once set foot in them, but can trade them with the same kind of high demand as someone else might closer to home.
Investing a larger sum in a fixed-week timeshare in a popular location during a high-demand week, then, can essentially give you all the flexibility of — or even more than — a floating week timeshare.
Of course, if you really do want to return to the same destination at the same time every year, a fixed week makes the most sense for you. Some examples include families with small children that want to vacation during the summertime or elderly couples who want to escape to warmer climates during colder months.
Floating Weeks
When you buy a floating week timeshare, you are buying the right to one week of timeshare use, usually during a given season of each year. By seasons, the exchange companies do not mean spring, summer, fall, and winter. Instead, they mean high-demand, low-demand, and everything in between.
Different exchange companies have different names and coding systems for seasons of the year. Resort Condominiums International, for instance, uses red, white, and blue color codes to indicate high, medium-, and low-demand seasons. Interval International also uses red to identify high-demand seasons, but uses yellow and green to indicate medium- and low-demand seasons, respectively.
Sometimes, a resort's timeshare units are all considered red. Las Vegas and Orlando are good examples. These are year-round hot spots for vacationers from all over the world, so the timeshare units are always in high demand. If you purchase a floating week during red season in Las Vegas, your vacation could occur any time of year.
Of course, floating week timeshare units make the most sense if you maintain a busy schedule that changes from year to year. But bear in mind that if you buy a floating week, you will have more vacation-planning tasks than a fixed-week unit owner. You will have to plan ahead and request your floating week of choice as early as possible in order to get the vacation time you want later in the year.
Points-Based Systems
Points-based systems are relatively new to the timeshare marketplace. They are similar to the airline frequent flyer and credit card company points systems in that you are essentially given a number of points in bulk that you can spend as currency on whatever you choose.
These points systems were introduced into the world of timeshares to accommodate owners who did not want to take an entire week of vacation each year. With the points, these people could cash in two or three days' worth of points one month, and then another two or three days' worth of points several months later, allowing for two long weekends instead of one long vacation.
In some cases, leftover points that aren't quite enough to purchase a vacation can be used for other things, such as car rentals, airline tickets, and the like. With brand-name development companies that also own hotels, such as Hilton and Hyatt, you may also be able to use timeshare points as payment for overnight hotel stays outside of your regular timeshare vacation period. Your individual timeshare contract should spell out these options. Keep in mind that they will vary depending on which resort and which exchange company you choose.
TRAVEL TIP
Any timeshare unit you purchase under a points-based system will be, by its very nature, a floating week. You can use the points whenever you choose, for whatever you want, and you often will have the option of buying additional points each year that you can put toward things like cruise-ship vacations and other getaways.
The downside that some people see to the points-based systems is that the points may not keep up with inflation — a major reason for buying a timeshare in the first place.
Why not? It's simple: With a weeks-based system, a week is a week is a week. No matter what interest rates do during the next thirty years, the third week in August is still going to be the third week in August. On the other hand, with a points-based system, a purchase made in 2006 may entitle you to 10,000 resort points per year, which, in 2006, may be enough for one week of vacation. Who is to say that in 2026, 10,000 points will still be the equivalent of one week's vacation time? Just look to the airline frequent flyer programs as an example — tickets that used to cost 20,000 points sometimes now cost 50,000 points — and it's easy to see that points can go down in value just as easily as they can go up.
On the other hand, the value of points can go up — something a weeks-based system is not likely to do (unless the government changes our calendar to an eight-day week, giving you an extra day of vacation for the same price!). Some owners of Disney timeshare points, for instance, have seen the value of their points increase. How? The price has gone up for newcomers who want to buy the same amount of points today as those other owners bought for less money a few years ago. The folks who bought first are entitled to the same amount of points as their newcomer colleagues, but at a lower cost overall.
The point, then, is that points-based systems have more built-in uncertainty than weeks-based systems. The points-based systems are definitely a bit more of a financial gamble over the long-term, but that may be a gamble you are willing to take if you foresee yourself needing the flexibility of two- or three-day vacation choices that points-based systems offer compared with weeklong plans, which are always seven-day vacation periods.
