Fractional ownership differs from timeshares because you own a portion of the property. For most timeshares, you are only buying time to use the property, but you don’t own the property itself. Timeshares are also shared by many more people (up to 50) than homes owned via fractional ownership (8-13 owners).
- In general, timeshare owners have a right to use a shared property but do not own it.
- The average US timeshare has 130 units, and timeshare members typically occupy a different unit each visit. By contrast, co-owners share a single property, meaning their home-away-from-home feels like home each time they arrive.
- More than 72% of US timeshares have 52 owners per unit, meaning the average timeshare project has over 6,700 members. And only about 50% of timeshare occupancy is by the members; the rest is rentals and exchanges. These statistics translate into a lot of use by people who have little or no long-term connection to the property, and scant incentive to keep the timeshare attractive and welcoming. By contrast, small co-ownership groups own and share a single property, which they return to throughout the year, and rentals are typically prohibited.
- Given the huge marketing investment timeshare developers make to move their product, and the tenuous (or nonexistent) relationship between price and value, it is no surprise that re-selling a timeshare ranges from difficult to impossible. By contrast, almost all of the price of a co-ownership share goes directly to the cost of the co-owned home and its contents, meaning there is always a close relationship between the per-share price and the market value of the home.
- Although most timeshare organizations have a nominal owner board or committee, in practice timeshare members have little if any control over operations and costs. The disconnect stems from management agreements with resort operators or developers that prevent the timeshare members from exercising oversight and, worse still, are difficult or impossible for the members to terminate. By contrast, while co-ownership groups usually have professional management, the owners retain ultimate control together with the ability to change managers if the job is not getting done well and at a reasonable cost.
- The average price for a timeshare purchase is about $20,000 and the median income of timeshare members is about $73,000. The limited financial capacity of timeshare members, coupled with the tendency of member dues to increase dramatically over time and the difficulty of resale, often translates into high rates of member delinquencies. These, in turn, lead to still higher dues and lower accommodation quality. By contrast, the investment and income level of owners in co-ownership groups is much higher, and the level of owner delinquencies is much lower.