FAQ Timeshare

This Timeshare 101 is for you to understand what timeshare is.  It will surprise you on how timeshare members who don’t even know what they have purchased.  All they think is that they have an asset which they can sell later if they don’t use it.  They have implanted this in their mind throughout the sales process.  They can sell of course, but not selling and making a profit.

At Holigood, our aim to impart our combined knowledge from our experience with timeshare.  Coming from the timeshare background and with the help of the community, we hope this shed you some light of what Timeshare can offer.  Take your time reading this and start thinking of where your next holiday destination will be.

Timeshare Basics

What is a Timeshare

A timeshare is when a group of people buy into a property and divide the time usually in weekly intervals.  This is normally a condominium or resort-style developments.  They usually divide the property into 52 weeks and you can buy One, Two or Ten Weeks.  The more you buy, the higher the liabilities which is the yearly Maintenance Fees.  You can choose the size of the unit you like.  When travelling, you can return to the same resort you purchase or choose a different resort in the Exchange System. You can exchange either the time, location or both.  That is how timeshare is summarised.

Types of Timeshare

Just like any product, timeshare comes in ranges.  This is to accommodate the owner likes and budget.  Here are the 4 types of Timeshare:

FIXED WEEKS

The owner will own the rights to a SPECIFIC UNIT ON A SPECIFIC WEEK, year in year out for as long as the contract is valid. There is predictability, but also little flexibility. However, this is popular with retirees who will regard this as permanent holiday and they have made friends with other owners who own the same time and always come back to meet up. They could even own up to two or three weeks. This option can be quite costly as those who opt for the High Peak Season travelling period.

FLOATING WEEKS

As the word suggests, floating you have nothing fixed.  Hence this will be like first come first served.  Bookings are usually made 12 months in advance to secure that holiday you want.  However, with a floating week, owners have the flexibility to choose their holiday time compared to the fixed weeks.

RIGHTS TO USE

With this arrangement, the owner leases the property for an amount of time each year for a set number of years.  The developer maintains ownership of the property.  Upon expiry, the owner can renew or not with new Terms and Conditions apply.

POINTS SYSTEM

This is like the floating weeks, but owners can stay at various locales depending on the points they have accumulated from buying into a specific property or purchasing points from the club.  The Points are currency and time slots at the property are reserved on a first-come-first-served basis.

Timeshare Interval

They usually sell timeshares Intervals in Annual or Biennial usage.  You can choose to accord to your travel pattern (do you travel every year or once every 2 years) Hence, if you choose every year, you get a week of inventory every year and if you choose biennial; you get a week every other year.  The Maintenance Fees will be invoiced accordingly.  If you choose biennial, the resort usually offers Bonus Weeks which you can opt if you don’t have entitlement to use.

Type of Units

After deciding on which type of timeshare and interval, look at the Unit Type.  This depends very much on how comfortable you want to be on your holiday for privacy’s sake or for your pocket sake.  Type of Units ranges from Studio to 3 or 4 bedrooms.  The studio is for 2 people and 3 bedrooms normally can fit 6 to 8 people.  Just remember, the bigger the unit the higher the Maintenance Fees.

Exchange

The major attraction of a timeshare is to travel worldwide.  It takes you places that you have always been dreaming of.  This will not be possible without the Exchange. Exchange happens when you change a location or time.  The 2 largest companies doing exchanges are RCI (Resorts Condominium International) and II (Interval International).  With owning a timeshare, the resort will be affiliated with an exchange company.  All that is required for exchange is to deposit your week with the exchange company and you can exchange at a different time or location.  They have up to 4500 resorts choices.

Season (Week Colour)

As the globe comes in 4 different seasons in different regions, the world has a limited time for travelling.  Summer without a doubt will be the most popular time to travel and with this the demand is high.  Same goes for the Skiing Season in Winter.  With high demand, availability will be limited to who book it first or trading power.  Hence it’s wise to know what you have purchased and what it can give you.

In the Timeshare Calendar, there are 52 weeks.  The most popular week, without a doubt, is week 51 and Week 52 (Christmas and New Year period) If you own this week, your trading power for exchange will be high.  Know what season your week entitles you to.  Below you can see the Season Ranking for both RCI and II.

R C I

RED        : HIGH demand season

WHITE   : MID demand season

BLUE      : LOW demand season

 

I I

RED                        : HIGH demand season

YELLOW               : MID demand season

GREEN                  : LOW demand season

Maintenance Fees

Maintenance Fees are paid by timeshare owners yearly, depending on the timeshare. This covers the cost of running the resort, upkeep, utilities, insurance and taxes. The fees vary according to the type and size of the unit purchased.

Maintenance Fees are highly dreaded subject in Timeshare.  This takes a toll on owners as the fees increase with time.  This will end as a burden if you are not using your timeshare or renting it out to at least cover for the fees.

4 Cardinal Rights

Know your rights as a timeshare owner.  There are 4 and you can decide what to do with your timeshare.

USE

The only way of maximising what you have paid is to USE it.  This is the only way of you seeing your ‘investment’ in the product is to use to its maximum its potential and taking advantage of the savings and discounts.  Travel when possible, even if it’s a short getaway.  Get your friends and family involved and let them use your timeshare.

RENT

If you cannot travel for any reason, you can always rent your weeks or points.  With this, you can at least cover the cost of the yearly maintenance fees.  If you want to profit further, you can rent out Bonus Weeks that you can get at a cheap price.

SELL

One of the advantages of owning a timeshare is selling.  You can sell to someone you know or to another third party at a price.  This is categorised as resale.

 WILL

As part of your asset, Timeshare can be bequeathed to your next of kin.  You can transfer to your children for them to enjoy great savings holidays.

Let’s Compare

Hotel Unit vs Timeshare

It is all too familiar when travelling, especially with big families.  The family gets separated into different rooms and they spend more time trying to get everyone together instead of a relaxing family vacation.  Hotel units can get cramp and you will end up booking at least 4 to 5 rooms to accommodate everyone.

So how can a Timeshare Unit be a solution for this?

There are many things that set a vacation timeshare resort apart from the average hotel, but the major difference is the quality of the units available.

Timeshare units are way more deluxe than typical hotel rooms.  This ranges from Studio Unit right up to 3 to 4-bedroom unit which can sleep 8 to 10 people.  This solves the situation for those with big families.  Most don’t realise that timeshare units provide so much more than hotel units.

In a standard hotel unit, you will get:

  • One Room with a Bed
  • Bathroom
  • TV
  • Coffee and Tea making facility/bar fridge (if you are lucky)

This is ideal for couples only and even so; privacy is still limited.  Imagine if you want to read a book while your partner is blaring the TV Volume while both of you are in the same bed as you don’t have any other separate area.

However, with a timeshare unit will typically offer the followings:

One, two or three bedrooms.  Some resorts offer more than this depending on each configuration.

  • Living area complete with TV and entertainment system (this normally comes with a pull-out sofa that sleeps an extra 2)
  • Kitchen with complete facilities with fridge, microwave, oven, dishwasher together with dishes and utensils
  • Washing machine / Dryer
  • Bathrooms–depends on unit size, you can get one, two or even three bathrooms

Generally, a timeshare accommodation is for a week.  With the above configuration, the family can spend quality time together in the living area and yet have their own privacy in an individual bedroom.  With full kitchen facilities, they can stock up groceries and cook up some meals should anyone feels hungry.  It’s just like a home away from home. 

Before booking, owners can ask the resort a copy of the floor plan to know what you will be getting.  Most of the resort will have this information online and some have virtual tours of the resort and the unit.

All in all, timeshare units give better quality and space compared to hotel units and in the long run will save you more money.

Fixed vs Floating Weeks

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Deeded vs Rights to Use

To choose between the Deeded or Non Deeded depends on the degree on how involved you want to be with the Resort.  If your intention is just to use your Timeshare for a number of years, choose Rights to Use.  However, if you want to have more say in the Timeshare, for example, Maintenance Fees, Deeded will be the best option for you.

Deeded Timeshare means you own a fraction of the property through the Deed.  This is normally a perpetuity contract.

Rights to Use gives you the right to vacation at the property in stipulated time.  This generally has an expiry date.

Buying from Developer vs Buying from Resale

Buying from Developer

If you have never heard of Timeshare and bought a membership while on holiday, this means that you have bought from a Developer.

This is a beautiful set up to attend a presentation during your holiday with the promise of a free gift after 60 or 90 minutes which normally ends up more than 3 to 4 hours.  Sometimes it might even take the whole day.

Buying from a developer will mean that you are paying the full price with all the bells and whistles.  This is generally heavily priced as the inventory you are buying has a big marketing cost attached. 

You could have gone through a pleasant presentation or generally a mind-battering-high-pressure sales presentation that you can’t say no to.  Developers have engaged the best sales team out there.  Luckily buying from Developers have now been regulated with cooling-off period which means that you can cancel during this period without penalty.

Another way of buying Timeshare is through the Resale Market.  This might not be well-known but the trend is catching up as it makes more financial sense. Let’s discuss.

Buying from Resale

A timeshare resale is a timeshare available for sale by the current owner.  Owner can choose to sell on own accord or through a resale agent.  This would mean that since no developer is involved, the price is now remarkably lower than many people would expect.

One of the perks of owning a timeshare is that you can sell if you don’t use it anymore.  That is what the Sales have implanted during the sales process.  But in reality that is not the case.

Nowadays Timeshare resales are fairly common.  With the internet era, buyers can find out more information before buying a timeshare.  They can now take their time to buy a timeshare at a fraction of the price without the high pressure sales tactic.  All this is done by the comfort of their home.

RCI vs Interval International

RCI and Interval International are the 2 biggest exchange companies in Timeshare.  There are other exchange companies but these 2 have the biggest number of resorts under their wings.

The best advice is to check the Timeshare that you are purchasing.  They could either be affiliated with either RCI or Interval International or even both.  Check what works best for you.

RCI

Being the oldest exchange company with over 4, 500 resorts, owners feel that RCI has more availability and flexibility.

Partnership with prestigious brands like Hilton Hotels, Disney, MacDonald Hotels and Resort, Sol Melia, nothing seems to stop RCI from expanding their network.

The RCI Weeks programme provides member to trade their vacation week for exchange of the same at other resorts around the world.  When you deposit your week, they will assign trading power value by a variety of criteria:

  • Supply and demand at that resort
  • Type of unit owned
  • Season owned
  • Type of deposit

RCI also offers Auto-confirm comparison when creating a search.  RCI will email you the match and gives you a couple of days to decide.  If you don’t decide by then, they will release the space and give you another match.  If they confirm an exact match and send you the confirmation, you can choose to cancel at no penalty.

Membership and Exchanges Fees are a little higher Interval International.  Yearly fees are around USD99 and Exchange Fees is at USD239.  For a full listing of fees, click HERE

Interval International

Interval International is the second biggest exchange company affiliated with over 3,200 resorts in more than 80 nations.

The general consensus indicates that Interval International has higher quality resorts (Marriott and Starwood) than RCI.

Also, their membership and exchange fees are cheaper than RCI.  For a full listing of fees, click HERE

However, owners find Interval International procedures for extending deposits don’t work well and they have trouble using their deposits with them.  Ongoing searches are not that easy because their policies are not as good as RCI.

Nonetheless, both these companies provide the best options for exchanges compared to other exchange companies.  It’s best to check with the Exchange Companies on their policies before choosing one.

Timeshare vs Fractional

For those who already own a timeshare, they might have been approached by their Home Resort into upgrading to a Fractional Ownership.

Both are similar in character and still referred to as shared ownership.  However, they have a significant difference between them

Timeshare

A particular unit is broken up in 52 inventories (52 weeks).  Each purchaser to the inventory is given the right to use either one or 2 weeks depending on purchase.  The title of the unit however remains with the property owner.

Maintenance fee payable will depend on the number of weeks owned.

Fractional

Fractional ownership is when a property purchase involves several buyers.  This is usually around 6 to 12 persons.  Each owner holds an equal part of the title.

The owners have a stake in an asset without having to pay for the entire property cost, maintenance expenses and taxes.

Instead of traditional timeshare usage of one week, the fractional owner usually has from 4 to 8 weeks per year.

Timeshare vs Vacation Home

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Yearly vs Biennial

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Owning vs Renting

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