Understanding the distinct differences between timeshare and co-ownership

When it comes to shared holiday home ownership, the two popular choices are timeshare and co-ownership (also called fractional ownership).  You might be wondering what the fundamental differences are between the two? While both options offer an opportunity to own a slice of paradise and have a place to escape to during holidays, they have distinct differences in terms of ownership structure, number of owners, type of home, flexibility, control, and resale. In this article, we’ll explore the key differences between timeshare and co-ownership.

Difference #1: Right to use vs. property ownership

The primary difference between timeshare and co-ownership is the ownership structure. With timeshare, you purchase the right to use the property for a specified period, usually a week or two per year, that may not coincide with your preferred vacation time.

On the other hand, co-ownership allows you to own a percentage of the property. You share the property’s equity with other co-owners, and each owner has the right to use the property for a certain period, based on the percentage of ownership.

Difference #2: Number of owners

Typically, timeshares have many more owners, with some timeshare projects having over several thousands members. A majority of timeshare occupancy is by renters and exchangers (some timeshare programs allow trading resort units with other units in different locations) who have little to no long-term connection to the property. In contrast, small co-ownership groups own and share a single property that they return to throughout the year. Rentals are typically tightly managed or prohibited, providing a more intimate and reliable experience.

Difference #3: Type of property, amenities and interiors

Timeshares are typically located in resorts, hotels, or condominiums, and have many units, often one hundred or more. They usually offer amenities like pools, spas, and fitness centres. The units are mostly furnished with basic amenities and are designed to accommodate a variety of guests.  

Co-owners, on the other hand, share a single stand-alone home, designed and furnished to meet the specific preferences and needs of its co-owners. It becomes their home-away-from-home, providing a more personal and familiar experience. The homes tend to offer premium amenities like private pools, high-end furnishings, and custom-designed interiors. 

Difference #4: Flexibility and usage

Another significant difference between timeshare and co-ownership is the flexibility and usage options, due to the number of owners. With timeshare, you purchase the right to use the property for a set period, usually a week or two each year, generally alongside fifty or more other owners.

Fractional ownership, on the other hand, provides longer access as the ownership is shared, typically, between two and eight like-minded owners. This gives you more flexibility and control over your usage of the property. You can generally use the property from 45 to 180 days per year, whenever you like, subject to the terms of the co-ownership agreement. 

Difference # 5: Control over operations and cost

Timeshare members usually have little to no control over operations and costs, with management agreements often preventing them from exercising oversight.

Co-ownership groups usually have professional management, but owners retain ultimate control and have the ability to change managers if necessary, justly managed by voting pro rata to their ownership stake.

Difference #6: Resale value

Finally, timeshare and co-ownership differ in their resale value. Timeshare can be challenging to resell, and you may not recoup your initial investment when you decide to sell. Moreover, timeshare ownership typically comes with a contract that has an expiry date, and if you don’t renew it, you may lose your right to use the property.

Co-ownership, on the other hand, has a more flexible resale market. You can sell your share of the property at any time, usually subject to a right of first refusal in favour of the existing owners. Moreover, with co-ownership the value of your share is tied to the value of the property and has the potential to appreciate over time.

Conclusion

Ultimately, understanding the differences between timeshare and fractional ownership will give you peace of mind about factors such as usage rights, exclusivity, amenities, and financial investment. If you feel co-ownership might be a good choice for you, get in touch with our international team. We will help you find your dream second home, match you with like-minded co-owners, manage the home for you and ensure you enjoy a hassle-free ownership experience.

Discover more about Lazazu:

How Lazazu co-ownership works | Frequently asked questions about shared holiday homes | The benefits of fractional ownership | Browse Lazazu’s selection of second homes | The difference between timeshare and co-ownership