What is a Timeshare and How Does it Work?

Timeshares are shared ownership of a vacation real estate property. Multiple people will buy a timeshare at the same location from a timeshare resort or company, and they will all share ownership for a price.  

Each owner will buy time, usually in weekly increments, to spend at the property each year. The property could be an apartment, resort home, condo, or campground. Companies typically split timeshares into one or two week periods, but it may be possible to purchase multiple timeshares and get more time. 

On the surface, this vacation model appears to be an effective way to ensure you and your family have a destination for relaxation without spending extra money on a hotel room. Though buying a timeshare will provide you with at least one week of vacation time at the real estate property, most people are unaware of the annual maintenance fees, which are burdensome for some people. 



What Is a Timeshare ?

How Do Timeshares Work?

If you're wondering how does a timeshare work, you're not alone. Though you will have a right to exclusive use of the vacation property at least once every year, understanding ownership can be tricky. The primary factors you need to know are what type of timeshare contract and ownership you have. 

Other Factors to Consider Before Becoming a Timeshare Owner

The timeshare industry is notorious for intense sales practices that make it difficult to reject their offers.

For some people, having a designated destination that you enjoy is the best way to vacation, so timeshares may entice them, especially if the timeshare is at a premium resort with beautiful scenery and plenty of activities. You can visit the timeshare each year without worrying about your lodging’s conditions because every owners' fees keep the unit looking its best all year long.

HomeTimeshare AssessmentLearnAboutGet Started

Taking your family on vacation at least once every year is something many people aspire to do. 


What Are Timeshare Costs and Maintenance Fees?

If you're thinking about buying a timeshare, you can expect to pay a hefty price, both upfront and on an annual or monthly basis. The costs associated with timeshares are the most significant issues with this type of vacation ownership, even if they initially sound like a great deal.


Even if the timeshare isn't on a resort, it may have resort-like features and amenities to improve your stay. The grounds have professional management, and the timeshare unit will have plenty of room for you and your guests, so you can rest assured everyone will be comfortable while vacationing.

Disadvantages of Timeshares

The most significant drawback of owning a timeshare is the ongoing costs after paying the high upfront price. Before you decide to become an owner, you must make sure you are prepared to handle the annually increasing costs and maintenance payments. If you hold a deed to the property and take out a high-interest mortgage, you must pay the monthly loan payments, or your timeshare can go into foreclosure. Foreclosure can significantly impact your credit score and ability to purchase another property.


As travelers to another part of the United States, your family will likely rack up hundreds of dollars on hotel room costs, especially if you intend to treat everyone to vacation at a resort destination, like Disney World. These costs will quickly add up, so you may seek other ways to spend quality time with your loved ones on vacation. That’s why timeshares sound so attractive when you first hear about them. 

The timesharing industry is a bustling billion-dollar empire that provides people with vacation properties they may not otherwise afford. You may have heard about timeshares from advertisements sent to your email address or heard about a timeshare presentation while visiting a resort. 

People who sell time shares are expert salespeople who deliver aggressive pitches to entice people to buy a timeshare. Still, the process is not as cut and dry as they make it appear during the presentation. If you are considering purchasing a timeshare, you must understand what is a timeshare and what it means to be a timeshare owner. 

The structure of a timeshare usually falls within either shared lease ownership or a deeded ownership.

Shared Leased Ownership Interest

Just as you can lease a vehicle or an appliance, you can also lease a timeshare property. Shared leased ownership interest gives an owner the right to use a vacation property for a specific number of years. When signing the contract for the vacation home, the owner will select their week or weeks to spend at the property to not infringe on other owners who will spend time at the house or apartment.

With shared ownership interest, the timeshare resort retains ownership of the real estate property. You still have a right to use the property until your contract expires, but you aren't a real owner. A timeshare resale or transfer is more restrictive, but not impossible, with this type of ownership, often reducing its value. 

Shared Deeded Contracts

This type of timeshare ownership gives a fraction of the property to all the buyers. With deeded ownership, you would have a contractual obligation to use a specific week or weeks every year, or at the bare minimum, pay for it. This option is real ownership that people sometimes take out mortgages for, so you shouldn't enter into this type of contract without considerable thought.

If timeshare resorts sell their units in weekly increments, one property can have 52 owners or deeds. By buying one week, you will technically have 1/52 ownership interest in the timeshare unit. The more weeks you purchase every year, the more ownership you will have.

Unlike shared leased ownership, deeded ownership doesn't have an expiration date on the contract, but you can sell it. You can also include it in your will for a relative or pass the vacation ownership to someone else, like a charity.

Types of Timeshare Contracts

Types of Timeshare Ownership

Now that you understand what is a timeshare, you can learn how to use the property. You will have a right to exclusive use of your vacation property for a period of time every year. You can choose between three options: fixed week, floating week, and points system.

Fixed Week

With this option, owners will have exclusive use of their timeshares on specific dates that usually fall within one week or two weeks. With a fixed week, you can take vacations on the same week every year, which is ideal for those who prefer to take their vacations during a particular point in the year, like the holiday season.

One of the drawbacks to taking the same week each year is that it is tough to switch the dates. If multiple owners have a fixed week timeshare, shifting dates can be cumbersome, and timeshare resorts won't make the process easier for their timeshare owners.

Floating Week

A floating week gives owners a bit more freedom when choosing their vacation dates. For instance, your contract may allow you to book vacations between February 4 and April 4, but it still may have exclusions for holidays or blackout dates.

When you make your reservation for your floating week timeshare, you will have a short amount of time to book the property. Floating weeks operate on a first-come, first-served basis, so if you choose this option, you must follow through with the reservation dates to ensure you get the week you want.

Points System

A timeshare points system is another way to get access to timeshares. Otherwise known as a "timeshare exchange program," this points-based system will allocate a specific number of points to your timeshare based on size, location, and availability. You can use these points plus any additional fees to gain access to other resorts within the timeshare company's internal system. Each case is different, and it may be possible to use the points at resorts outside of the system.

 The problem with this option is that not all timeshare properties have the same amount of points. If you don't have enough points with your timeshare to vacation at another desired resort, you'll have to pay out of pocket to make up the difference.

Timeshare owners pay upwards of $20,000 for a unit. If you have the money in your bank account to pay the purchase price, then you'll save yourself the hassle of trying to obtain a loan, which is an option many people take because most people don't have tens of thousands of dollars to spend on a vacation home.

While you may get a bank loan to buy a residential home, you likely won't get one to finance a timeshare. Banks need collateral, and if you stop paying your loan for any reason, they can't repossess the property. Even if you have a deeded timeshare, it still has other owners, so your bank likely won't give you the funds to satisfy the upfront costs for a timeshare.

Your timeshare resort may have financing options to help you make your purchase. Unfortunately, your resort loan will have incredibly high interest rates that can reach 20%, so you can be sure you'll pay the resort a substantial amount of money on top of the outrageous purchase price. Because there aren't many financing options for timeshares, you will be stuck paying for a high-interest loan to the resort.

Maintenance Fees

Timeshare owners also have to pay yearly maintenance fees after they make their purchase. The purpose of a maintenance fee is to cover upkeep expenses for the property, regardless of if the owners can use the home during their assigned weeks.

Additional Fees

In addition to the costs of buying and owning a timeshare, people often get stuck dealing with additional fees for various services. These costs can include everything from HOA dues to repairs to the unit.

Some owners try to recoup their money or at least break even by renting out their timeshares. While this may seem like a worthwhile idea, you can still end up paying out of pocket fees for a rental agent, cleaning services, and booking fees.

Timeshare Purchase Price

Timeshare maintenance fees are not a once-and-done payment. You must pay them annually for the contract's duration or until death or resale for deeded timeshare ownership. The maintenance fees will have an annual increase of up to 4%, making it difficult for many people to keep up with the payments.

Advantages of Timeshares

If you have the resources and prefer to spend a brief amount of time in a predictable setting, a timeshare may be a worthwhile option.

The contract you sign at the beginning of your ownership is legally binding. If your financial situation changes, you still maintain an obligation to pay all expenses associated with the timeshare. Depending on your contract’s allowances, you may choose to sell your timeshare, but the resale market is saturated with unwanted units, so it may not sell quickly.

Flexibility can also be problematic with timeshares. There is little room to budge with fixed-week timeshares, but floating weeks aren't much better. Every time period you want to spend at your unit must be requested long in advance, sometimes making vacation-planning difficult.

During the initial presentation, the salesperson may not fully disclose all the fees and ongoing costs associated with buying and owning a timeshare. Most of them work on commission, so they will do whatever it takes to get people to sign contracts. The truth is, you could probably find your own vacationing spot on the secondhand market for a better price.

With its high costs, depreciating value, and limited liquidity, a timeshare may not be the best investment to make. Instead of buying a timeshare, some people become members of a vacation club to get discounts on vacation destinations. Still, this option's ongoing fees can be just as expensive as a timeshare.

Instead of being bound to one location and a resort company, it is better to save your money throughout the year and take a vacation at a destination and time period of your choice. Once you break down the total costs for the timeshare and all the times you have a right to use it, it could end up costing more than $500 a night, making the timeshare more expensive long-term than a hotel room.

While some people feel like a timeshare is worth it just so they don’t have to worry about planning a trip, there are other, more affordable alternatives. You could book at an all-inclusive resort one time without having to worry about doing it again a year later. You could also pay for the services of a travel agent who does all the investigating and legwork for you for a minimal fee. Either way, these types of alternatives will often still cost less than the potential $500 a day mentioned above.

If you signed on for a timeshare without fully understanding the purchase and ownership obligations, Timeshare Cancellation Experts could help. Our team helps vacationers who were pressured to sign timeshare contracts or were lied to about their ownership obligations. We specialize in finding effective legal solutions to get people like you out of their contracts.

We take the time to thoroughly research and vet timeshare exit firms to help you get rid of your timeshare. We understand the ins and outs of the timeshare industry, and we will use our knowledge and expertise to help you get out of your timeshare. Take our free online assessment now to get started on your case today.

We help people who need advice for their timeshares! Keep it or cancel it, let's find out the best decision for your circumstances. 


This is to state that this is not a financial product. This page doesn’t relate to anyone getting a loan. This is NOT a loan product, a requirement to get financing, or related to getting financing. This page is in no way endorsed by Facebook. There is no guarantee of a refund or financial compensation by acting on the information herein. 

Results are not guaranteed and will be looked at on a case by case basis. Not all clients will qualify for timeshare cancellation and compensation in the form of a refund from their timeshare resort. We work carefully to select timeshare relief firms. Once you are qualified and accept our terms, we will introduce you to them to look after the management and administration of your recommended plan. Our online service is 100% free to use, and you are under no obligation to accept any of the quotes or product offers. Timeshare relief options are subject to conditions and acceptance. Timeshare Niall does not administer timeshare


600 Congress Ave, Austin, TX 78701, United States
+1 (737) 377-1811