Are Timeshares Real Property is a popular question within the timeshare community. The answer is yes. Timeshares are considered real property, but only to the resort, not the timeshare owner.
Let's unpack this. Timeshares are Fractional Interests of Ownership with "the right to use" the resort's facilities. So is this an investment? The answer is NO.
Are Timeshares Deeded Properties With Ownership To The Property?
When we invest $30,000 in a $10 million condominium and are assigned a Fractional Interest of Ownership of "the property" that provides us ownership of that fractional interest, the value goes up and down based on the current real estate market. That has property value.
When you purchased a timeshare for $30,000 and assigned a Fractional Interest of Ownership with the "right to use" the property, the right to use the property is not an investment that fluctuates based on the current real estate market.
For this reason, you own a "deeded week" or a "point system."
The bottom line is that Timeshares are not property with the expectation of capital gains. You own the right to use the property one, two, three weeks out of the year. Your Fractional Interest of Ownership never goes up in value.
Timeshare contracts state, "Purchaser acknowledges that a Timeshare purchase is not considered an investment with the expectation of capital gains. A Timeshare purchase is an exclusive membership for enjoyment purposes only for members and their guests."
Some developers offer a private residence club with fractional ownership. For example, on Kiawah Island in South Carolina, you can invest anywhere from $625,000 to $1,700,000 for an intimate, gated community of 21 residences nestled along the coastline.
That is an investment to fractional ownership of the property.
Timeshares are memberships used as a "country club" of vacation properties. You have "exclusive" ownership of a membership that allows you to use the developer's properties or trade to other locations within the resort network.
What Is The Best Way To Sell My Timeshare?
The Timeshare Resale Market today is saturated with inventory. As you have learned, you are selling a membership, not property.
For this reason, your timeshare loses 80% to 90% of the original value. By the time you pay closing costs, commissions, and marketing expenses, you may find yourself walking away with pennies on the dollar or, in many cases, in the negative.
Conclusion
Timeshare resale is always an option. If you would like to learn how to sell a timeshare, you may contact our office, and we'll provide you with a free consultation. Many timeshare owners see the benefit in canceling their contract using Timeshare Attorneys. In many cases, timeshare owners have been able to write off their purchase price as a loss.