Vacation Timeshare Principals
Explanation of the overall concept
There are two basic types of vacation timeshares - deeded and non-deeded ( also known as a right-to-use).
In addition, there are points-based ownerships that themselves can be deeded or non-deeded.
Non-deeded timeshares are typically located on leased land, common in Mexico and Hawaii.
The vast majority of timeshares are deeded, wherein each vacation condominium in a timeshare resort is owned by several owners. That ownership is typically structured in one of two main ways: 1. Fixed week 2. Floating week.
In a fixed week arrangement, each owner owns one or more weeks (pieces) of the condominium and receives a deed to that portion. The condominium is divided into weeks 1-52, so an owner of one week would own 1/52 of the condo, with the common areas such as the pool and grounds, owned in common with all the owners. See 16 year timeshare weeks calendar
With a floating week, the number of total sales is restricted to no more than one owner per week, times the number of condos in the project. So a 200 unit project would be comprised of 52 times 200 = 10,400 "pieces" of ownership. These pieces, in turn, are usually allocated as a certain number allocated to different months of the year relating to the higher demand and lower demand times of the year. For example, perhaps the three summer months might represent the highest demand time of year, so 3/12 of the pieces might be designated as High season, and sold for a higher price, while the remaining months might be designated as mid or low season, and sold for lesser sales prices.
It is important to know what the reservation period is, from and to, for a floating time resort. It is common for timeshare owners to think they can reserve year around, when in fact they are restricted to certain months. Holiday weeks are also often excluded and sold separately. If a floating time resort has 10,400 "pieces" of ownership, the deed often expresses the ownership for one week as 1/10400 ownership in the entire resort. It is common for floating time developers to assign names or colors to the different times of the year during which owners can make reservations. These names or colors should not be confused with EXCHANGE COMPANY colors assigned to SEASONS PERTAINING TO EXCHANGING. The developer names have to do with what months reservations are allowed to be made. For example, the right to reserve in the prime summer months might be called "Platinum", and the mid demand months might be called "Gold" and the low demand months might be called "Silver". There seems an unending variety of ways developers have split up and named the time of year, but they all boil down to asking, "during what months of the year can the owner request a reservation." Be sure you know the answer to that question before you buy into a floating time resort because the value differs greatly between high and low season floating time ownership!
The next logical question is, which is better, fixed or floating?
There is no set answer to that question because both categories are common, and both are fine. There are advantages to each, and it is up to the vacation habits of the individual as to which choice might make the most sense.
A fixed week owner does not have to bother calling the resort and requesting a reservation because that owner knows every year when the week falls on the calendar. This type of ownership is great for someone who has to know for sure, without exception, that a certain time of year is blocked out. People who ski, and people who must have certainty as to say beach time, are logical candidates where fixed time would probably be best.
Floating time is very popular with those who cannot plan ahead easily each year as to when they might vacation. They don't like the idea of being "locked into a particular week" and they would rather call and make a reservation. Note that no-one is ever totally "locked into a week"because fixed time owners can always opt to exchange to a different time of year, however, it does require payment of an exchange fee. Fixed time owners say that they don't like floating time because of the possibility of not being able to reserve the time they want. It has been our experience that floating time owners who reserve well in advance usually don't have any trouble getting their reservation. Floating time is very popular in certain areas of the world, such as Hawaii and Mexico and others.
Regardless of whether you buy fixed time or floating time, we recommend that you always buy "Red" (exchange company designation for high season)weeks, with only one exception: If you are extremely flexible as to where and when you vacation, and if you can buy it at extremely low price, some people actually intentionally buy offseason (White or Blue) weeks with the intention solely of exchanging them using the exchange company's "Instant Exchange" which means 60 days or less prior to travel date. On this short of notice, you can usually exchange for any size, any season, using any "color" of the week. We usually recommend Red weeks, however, because if you own a red week, you do not have to worry about being locked out of any time of year - you can exchange into any of the 52 weeks of the year, including the highest demand times of the year. And you can do so well in advance in order to accommodate airline reservations and other plans.