How Do Timeshares Work and What Do They Cost? | Pacaso | Pacaso

Timeshares: How they work and what they cost

Ashley Rappa headshot

Ashley Rappa

outdoor cabana with white outdoor chairs
  • Share this post:
It seems almost too good to be true: Own a piece of vacation heaven, a guaranteed yearly getaway, at what appears to be a pretty affordable price. But when you take a closer look at timeshares, you may uncover a slew of potential problems.

How do timeshares work?

The term “timeshare” is just what it sounds like: the right to use a property for a set amount of time, in a place shared by a large number of other parties (usually 52 families per room). In most cases, timeshare “owners” are simply buying rights to use a property type, not true property ownership. Timeshares most often refer to a stake in a hotel or resort accommodation, but almost never apply to single-family homes. The success of the timeshare model depends on each unit being owned by dozens of parties at any given time. And those people travel from far and wide to use the shared space — owners reported an average of 1,001 miles between their timeshare and their primary residence. Timeshares have been around since 1969, and since then have ballooned into a $10.5 billion industry, according to a 2020 study by the American Resort Development Association. What’s more, timeshare sales show no sign of slowing — sales volume has increased an average of 5% annually over the past five years. That’s great for the timeshare industry, but what exactly does it cost potential owners? 

How much do timeshares cost?

The first cost of a timeshare is time itself. Timeshares are usually sold to customers when they are already visiting a resort. Lulled by sunny skies and gentle breezes, would-be-buyers are often lured into extensive sales pitches with the promise of free goods or services. After all is said and sold, if someone decides to purchase a timeshare, the average upfront cost of a unit is about $22,000. Compared to purchasing a whole condo, this may seem like a relatively small price. But there’s more than just the upfront cost to consider when asking, “How much do timeshares cost?” Locked into a specific timeframe of use — often just one week a year — buyers are also locked into maintenance fees, which can exceed $1,000 annually and tend to increase year over year. When you do the math, it’s not uncommon for the total nightly cost at a timeshare to be higher than an equivalent area hotel.

What is a timeshare worth? 

Timeshares are a bit like boats: The second you decide to purchase one, it starts to decrease in value. Timeshare ownership also sidesteps most of the fiscal advantages that owning real estate normally brings, like equity, tax incentives or rental income.What’s more, if a buyer eventually decides to sell their timeshare, the likelihood of recouping the investment plus the yearly maintenance fees is incredibly low. Supply and demand are way out of balance, with 204,100 timeshare units on the market at 1,580 resorts in the U.S., and more on the way every year. The market is flooded with owners looking to pass their timeshare (and annual maintenance fees) onto a different buyer. 

What else do you need to know about how timeshares work?

  • The industry is highly regulated — make sure you learn about industry rules and regulations before you agree to buy.
  • Be very clear about exactly what type of product you are being offered. Ask for a concise, easily understood outline of terminology and purchase terms.
  • Look for signs of good property management and well-maintained facilities. Review the resort’s annual budget, which is usually available through the property’s homeowners association. 
  • Ask yourself, “Is this a place I want to stay year after year?” 

Why Pacaso is a better than a timeshare

One of the main reasons people choose a timeshare over another type of getaway — setting aside the heavy-handed sales pitch — is cost. The price seems like a bargain compared to a whole home purchase, which many buyers believe to be out of reach. When you add in a resort timeshare’s ever-increasing fees and limited access, many owners find it’s not such a bargain after all.An alternative? Professionally managed LLC co-ownership with Pacaso. Owning a share of a Pacaso allows you to co-own an amazing home for ⅛ the cost. It’s the modern way to own a second home.

What Pacaso offers

  • True real estate property ownership that moves in value with the market, so any equity realized is yours. 
  • Ownership of a luxurious single-family second home, not the right to use a condo or hotel room. You and your co-owners own 100% of the home.
  • A professionally designed, beautifully furnished and well-appointed home, complete with everything you need for a comfortable and relaxing stay.
  • Between 2 to 8 vetted owners who have exclusive access to the home that is never rented. A timeshare unit may be sold to 52 owners or rented out when vacant.
  • No hidden fees. Operating expenses are passed along equitably and at cost to owners. 
  • At least 44 nights in your home per share per year, which you can easily schedule and use on an ongoing basis. 
With Pacaso, you enjoy the benefits of second home ownership without all the hassles. 

FAQs

Q: What is the difference between deeded and leased timeshares? A: A deeded timeshare is one in which each owner holds a deed to their share of the vacation property, with the right to sell or rent their share. A leased timeshare is owned by a developer, and tenants may lease blocks of time to use the property. Q: What is the difference between fixed weeks, floating weeks and points in a timeshare contract? A: A fixed week system lets you purchase a specific week to use your timeshare property every year. A floating week system gives you the flexibility to vacation any week within a certain season, but you have to book early. With a points system, you purchase points that you can use to stay in any one of multiple resorts within the timeshare company. Q: How do Pacaso owners schedule time in their Pacaso? A: Pacaso’s SmartStay system lets you view availability and secure a stay in your Pacaso in real time. The app’s technology is designed to ensure that owners are treated equitably based on their ownership share in the property. Learn more about Pacaso’s stress-free scheduling. 

Featured Articles

scheduling app screenshot
ByAshley Rappa

Stress-free scheduling: easy, equitable, flexible

Read
signing documents with two people
ByAmie Fisher

How Pacaso resale works

Read

Receive new listings & exclusive updates

The best homes sell fast. Be the first to know about new listings, and stay informed with second home tips, inspiration and data.

Want to chat? Contact us.