Time Shares: A Great Vacation Alternative?

How timeshares work and how one might work for you

The love-hate relationship that most time share owners have with their time shares recalls the opening joke from the classic Woody Allen film Annie Hall. Two elderly women are visiting a resort. "Boy, the food at this place is really terrible," says the one. To which the other replies, "Yeah, I know - and such small portions." Talk to someone who advises against purchasing a timeshare and chances are they already own three and plan to buy another. Here's why timeshares provoke such ambivalent emotions.

How timeshares work

The time share concept began with a resort developer in the French Alps in the 1970s. Instead of renting out rooms to visiting tourists, he decided to sell shares in the property so that shareholders could vacation there when they chose.

Since then, timeshares have become the worst kept secret in vacation travel. The American Resort Development Association estimates that 3.9 million American households have now purchased a collective 5.8 million weeks of timeshares worldwide.

In theory, the advantages of owning a time share property are obvious. For an initial investment of usually around $10,000 to $15,000 new, less if used, a timeshare owner receives a perpetual share of time in a vacation property. In other words, guaranteed lifetime lodging at a beautiful vacation spot. This share is typically a true deeded share in the resort, while non-deeded timeshares function more like a long-term membership. The usual timeshare is 1/52, meaning one week of vacation time per year, though 1/104, 1/26, and 1/12 timeshares are also common.

How to know if a timeshare would work for you

Timeshares sound simple, but they can actually be very complicated. To cover maintenance and upkeep, annual fees are charged to timeshare owners, typically in the range of $300 to $750 annually whether the timeshare is used or not. If not included, property taxes may be charged on top of that.

Timeshare flex, points, and swapping are all part of the process of scheduling your stay at a timeshare. If you're interested in staying somewhere new one year, you may have to use a timeshare exchange company. Most timeshare nightmare stories involve booking and difficulty swapping shares.

The key to getting value from your timeshare is research. Learn how the system works, and investigate the tricks and small print that time shares companies use to bilk investors. If you are the sort of vacationer who likes to visit the same spot every year and stay in one place rather than travel from hotel to hotel, a time share property can save you a lot of money in the long term.

More information on time shares