What Is a Timeshare and How Does It Work?

Despite the current economic woes inflicted by inflation, around 80 percent of American adults plan on doing some traveling this summer. While many plans on taking road trips, some will fly to their destinations.

Yet, picking destinations is often a sticking point. That’s why some travelers prefer to take that question out of the equation with a timeshare. Instead of arguing about where to go, you can simply plan out what to do at an established destination.

Are you asking, “What is a timeshare?” Not sure how they work? Keep reading for answers to those questions.

What Is a Timeshare?

In essence, a timeshare is a property with multiple partial owners. When buying a timeshare, you essentially buy a period of time each year consistent with your total investment.

So, if you buy a 1/26 share, you are effectively buying two weeks’ worth of periodic control of the location. That ownership stake gives you the right to two weeks of time at the location each year.

The exact period of control varies, but most people sign on for somewhere between one and four weeks per year.

Deeded and Non-deeded

Most timeshares fall into one of two categories: deeded and non-deeded.

With deeded timeshares, you literally own a piece of the property. More specifically, you own a percentage of the property.

With non-deeded timeshares, it’s more like a lease that entitles you to use the property for a specific amount of time each year.

How Does a Timeshare Work?

Most timeshares are located in resorts or similar desirable locations. For example, a timeshare might be a bungalow or condo at a tropical destination. In most cases, a timeshare company runs the administration of the property.

You buy your partial ownership from the timeshare company. When you sign up, they typically assign you a given block of time in the year. This is your block of time, and no one else can use the property for that week or two-week period.

While most people visit during their assigned period, they do sometimes trade their block of time or part of it to another owner, so they schedule their vacation at a different time of the year.

Timeshare companies may or may not assist with this trading process.


There are a couple of variants on how timeshares work. Let’s look at three common approaches.

Fixed Week

The most common approach is the fixed-week approach. Here you get the same week or two weeks every single year.

Floating Week

Under the floating week approach, you get the right to use the property during any week of the year. However, it’s typically based on a first-come, first-served sign-up process.


The fractional approach entitles you to a longer stretch of time at the property, such as a month or quarter of the year. This is less common largely because most people don’t have enough free time in their year to justify the expense of fractional timeshare ownership.

Each timeshare company will set its own policies regarded a fixed-week versus floating-week approach.

Benefits of a Timeshare

Timeshares do offer some benefits, which are often overshadowed by the negative press they receive. One of the key benefits of a timeshare is that it guarantees you a place to take your vacation in a presumably desirable location.

This brings with it some other advantages. It simplifies trip planning.

You can buy your plane tickets way in advance because you already know when you’ll fly. That can save you some money on tickets.

You also avoid the hassle of booking a room. That can prove particularly important if you get your week during the busy season.

You also avoid the problems of maintenance and upkeep. You pay an annual fee for those services, and the timeshare company handles the details.

If you don’t use your timeshare in a particular year, you can rent it out during your assigned week to bring in some extra cash.

Disadvantages to Timeshare Ownership

While timeshares do provide benefits, they also come with some disadvantages. One of the things that most timeshare companies neglect to tell new owners is that the annual fees they pay will continue to go up. Those fees or dues generally include utility costs, maintenance, and taxes.

Buying a timeshare is also fairly expensive. The upfront asking price is usually around $24,000 for the fixed-week option. Since banks rarely, if ever, finance timeshares, you must pay out of pocket or finance through the timeshare company.

Timeshare financing typically comes with, unfortunately, steep interest rates. So, if you are going to buy one, it’s almost always best to pay for it out of pocket.

The last big disadvantage is serious enough that it warrants its own section.

Leaving a Timeshare Is Hard

Leaving a timeshare is difficult at best. There is a brief window of time called the rescission period, where you can cancel the purchase.

State laws vary on how long that period lasts, so make sure you know ahead of time in case you change your mind. As a very general guide, the period normally lasts somewhere between three days and two weeks.

Once you get past that period, you have few options. If you own the timeshare outright, you can try to sell it off.

Your other main option is working with a timeshare cancellation business. These businesses specialize in helping you escape from the timeshare contract.

Timeshares and You

The answer to the question of what a timeshare is is actually fairly simple. It’s partial ownership of a property. That ownership gets you guaranteed use of the property for a specific period of time each year.

Owning a timeshare offers some benefits. You get simplified vacation planning. You also get out of dealing with the logistics of maintenance.

Timeshares also saddle you with some disadvantages, like a high upfront cost, rising fees, and limited financing options. It’s also difficult to leave a timeshare.

Looking for more vacation options. Check out some of the other posts in our Travel section.

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