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Understanding Timeshares, Fractionals, Residence Clubs and Destination Clubs

Fractionals, Residence Clubs and Destination Clubs

What are the differences between timeshares, fractionals, Residence Clubs and Destination Clubs?

Ownership

While time-shares and fractional residences are related; both involve shared ownership of a vacation property. There are a few key differences between the two.

What is a Timeshare?
A time-share is generally an annual or bi-annual usage of time (one week in duration) within a specific resort. Some weeks may be fixed; meaning you are obligated to take the same dates every year. They may also float within a broad season. Timeshares also tend to be less expensive than fractional real estate: They average $12,000 a week, with a range of $5,000 to $25,000 plus annual fees. Regardless how the time is managed, chances are the resort is affiliated with a timeshare exchange company. Additional annual fees will apply for the service of swapping your week for any one of the thousands of time-share properties available worldwide.

There are two methods of ownership. Deeded ownership: you own a tiny fraction of a condo or a villa. Right to use: gives you no deeded real estate interest.

What is a point based system?
Points-based system in which the owner may or may not have a deed, are awarded points that can be redeemed at other properties run by the same company.

What is fractional ownership?
Fractional residences are similar to a true second homes or at least part of one. The term implies, for a fraction of the cost and without the usual maintenance hassles. There are fewer owners per residences than with time-shares. They range from 4 to 13 owners, as opposed to 25 to 50 resulting in more usage which is generally 3 to 13 weeks. For example, a quarter-interest share translates to four owners per unit gives 13 weeks per owner. The most common share for upper-end fractionals (sometimes called private residence clubs) is a one-eighth share, which equals six weeks.

Fractionals also tend to have a luxurious level of furnishings, services and amenities compared to time-shares. In the late 1990s, high-end hotel companies began investing in fractional ownership and the newer clubs often operate like four- and five-star hotels. Owners arrive at their furnished properties to find the refrigerator stocked, twice a day housekeeping, and spa appointments prearranged.

Fractional residences average between 1,700 to 2,500 square feet and are typically larger than traditional time-share units. Similar to time-shares, fractional residences may be affiliated with a free timeshare exchange program, such as RCI or Interval International. Owners may only exchange weeks with similar properties operated by the same company. For the vacationer who want the experience of visiting new location each year, this product may not be suitable. That's where destination clubs come in. Their emphasis is more about availability and diversity of locations. Initial membership fees are required and a portion is refundable should a member leave. Destination clubs target upper-end buyers who purchase a membership in lieu of an additional vacation home purchase. Just like high-end fractionals, these destination clubs are amenity-rich. Some potential buyers may see a downside to destination clubs because they may not always benefit from the price appreciation of the real estate.

Residence Clubs and Destination Clubs

Private residence clubs and vacation fractional ownerships offer tremendous benefits and are an excellent investment. However, one of the drawbacks has been the complexity and confusion related to governing the actual usage. Frequently changing rules and regulations along with very time sensitive deadlines request a high level of management to ensure full enjoyment of the benefits. This can be a stressful and time-consuming process. MembersTrade® can successfully manage your fractional.

Timeshares Explained

Many of you have specific preferences when it comes to your vacation lifestyle. The timeshare industry offers you many options to fit your leisure time. Their variety of products, allows you to decide what is right for you. Time-shares also know as interval ownership, applies to fractionals and biennials. Vacation ownership products are designed to provide greater usage, that you will use and enjoy for many years. Listed below are the definitions that are used and should allow you to understand the products.

  • Fixed week - One week of use same time every year
  • Floating week or flexible use plan - One week of use anytime if available.
  • Split week -The use of less than the one week timeshare
  • Biennial timeshare interest - Use every other year
  • Fractional timeshare interest - More than a single week of use.

The most important aspect of each of these vacation products, however, is the exchange program.

Private Residence Clubs and Fractional Products Explained

  • Fixed means set or permanent, the months/weeks initially reserved will stay the same over the years. Keep in mind; most fixed plans do have options for space available reservations throughout the year.
  • Floating plans allow owners to reserve vacation time during a specific season or time period, but unlike fixed plans the owners do not have a specific week each year. Although owners have a fixed amount of vacation time, the usage is much more flexible with a floating plan.
  • The hybrid plan is a blend of floating and fixed plans. The typical use plan for a private residence club provides for two weeks of prime winter and summer use with unlimited flexible use during non-peak periods year round. Often key holidays are also fixed under this system.
  • Rotating priority systems were developed to equally distribute usage time among owners of clubs using floating plans.
  • Space Available - Many residence clubs offer space available reservations, duration accessible after all owners have been allocated their specific vacation time for the year.

Account Management

We handle everything to allow you to focus on the enjoyment of your precious leisure time. You would be assigned an Account Manager who would work with you to create a travel profile and review your preferences. Your Account Manager will assist you by making reservations, requesting changes and monitoring your waitlist.

  1. Basic Allocation Management
  2. Your desired dates and locations will be a priority, as we take the responsibility to meet the rigid request deadlines and continually monitor those requests

  3. Supplemental Time
  4. We can manage additional time that may be available for you through your fractional or private residence club, most commonly on a space available or per diem basis.

  5. All Inclusive
  6. This option allows us to manage both your basic allocation and supplemental time.

I am interested in Allocation Management (Fees vary according to each program).

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