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Home » Real Estate Investments: This Is How Timeshares Work

Real Estate Investments: This Is How Timeshares Work

April 5, 2020 By The Fortunate Investor | This article may contain affiliate links. For more information visit our Disclosure

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Real Estate Investments This Is How Timeshares WorkAre you looking to make an investment in these troubled times?

There are many ways you can achieve this. You can invest in cryptocurrency or save up to get on the property ladder. You could even start your own online business

Alternatively, you could invest in a timeshare. You may have heard a lot about them but do not understand much about what they actually are.

Here’s everything you need to know about how timeshares work.

1. What Is a TimeShare?

Owning a timeshare involves purchasing a percentage of a property, usually a vacation house. This allows you to spend an allocated portion of time on the property once a year.

They can be great if you want to ensure you have a guaranteed vacation home every year and the costs can be minimal compared to buying your own vacation home in a prime part of the world.

However, there are many downsides to timeshares. You may not know who you are dealing with and you could have trouble allocating a time that works for you to enjoy the property.

The other timeshare holders could sell their portion to other owners that you don’t approve of or who want to make changes to the property.

You can, however, make some money from a timeshare via a timeshare exit if you so wish.

Types of TimeShares

Types of TimeShares

There are two types of timeshare that you should be aware of.

Shared Deeded

This is where the ownership of the property is divided between all owners of timeshares in the property. The house deeds are also shared.

Your ownership of the house is usually tied to a specific week of the year so in theory, there could be 52 different owners.

A problem with a shared deeded arrangement is that all the owners will have to agree on any changes to the property before they are carried out.

If the timeshare company wants to make maximum revenue, it could mean liaising between 52 different people all over the world, which could change regularly, just to make a minor alteration to the property.

Shared Leased Arrangement

This arrangement is worse than a shared deeded arrangement as no one person owns the property. All the owers are merely leasing it form each other for the period of time they are using it.

Because it’s a lease, your timeshare can run out and only entitles you to use the property for one or a few weeks a year over the course of the length of the lease.

The deeds for a shared leased arrangement are always stored on the premises and do not belong to any one person.

Remember that one of the benefits of timeshares is that they can be considered charitable deductible under tax arrangments.

Now You Know How Timeshares Work

A timeshare can be a complex set of arrangements that allow the owners to access a property at a certain time of year. It’s important to know what you’re getting into before signing up.

If you’re interested in learning more about how timeshares work, be sure to check out the rest of our site.

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