Condo Hotel or Timeshare?
Posted: Monday, March 20, 2006
by Jared Emin
Condo Hotel or Timeshare?
Why a condo hotel is a better choice for those interested in purchasing a vacation residence?
“Timeshare" is a common word. Most people know what it is and what it means to purchase one. “Condo-hotel", however, is a term still unfamiliar to many people. The descriptions are quite similar a timeshare gives you partial ownership in a vacation property, a condo-hotel is a resort condominium unit also available for purchase.
Because the definitions are so similar, most people don’t think there’s much difference between a timeshare and a condo-hotel. But there are significant differences that could affect your decision if you’re considering purchasing a timeshare.
Timeshares became popular in Europe in the 1960’s when most people found themselves unable to afford purchasing vacation homes. A ski resort developer in the French Alps is credited with being the first to offer his guests the opportunity to “stop renting a room" and instead “buy the hotel". Since then, timeshares have become an increasingly popular way for people to own a vacation spot.
Condo Hotels, on the other hand, are just beginning to increase in popularity and demand. Though the most well-known and popular condo-hotels are in Southern Florida, they are being developed all around the world.
So now, if you’re in the market for a vacation home, you have a couple of choices. But how do you choose? Here are some of the important differences between timeshares and condo-hotels. Differences that you may find make a condo-hotel unit the more appealing choice.
Condo Hotel Verse Time Share Usage
If you own a timeshare, you often own exactly that – time: specific dates during which you can use a specific resort or network of resorts. That can pose some scheduling challenges if you’re not able to get the same week or two off of work every year. If that’s the case, you can trade your time through several timeshare networks, but it takes, well, time to do. Time to find a good network, time to find someone who wants to trade. If you want to exchange your time, you have to do it through a network that your timeshare is affiliated with. Most timeshares are only affiliated with one network, which reduces your chances of finding someone willing to trade. In addition, trading time costs money. Most timeshare networks charge a fee for every “transaction".
Owning a condo hotel means your time is already flexible. You can stay at your condo during the same weeks every year if you’d like. But if your schedule is unpredictable, you have the option of staying whenever you’d like. And when you’re not in your condo, you can have the hotel’s management company rent it to hotel guests. They share the rental fee with you, which can help cover some of your ownership costs.
Some timeshares offer what’s called “floating time". Floating time means you’re not locked into specific dates. The challenge is that you’re competing with several other people. Any one of them could reserve the dates you want before you get them. So, while floating time offers some flexibility, it also means you run the risk of not finding an open date that coincides with your schedule.
When you own a unit in a condo hotel, you’re the only owner. That means that, when it comes to reserving dates, you get first choice. Yes, others can rent your condo if you’re not there, but you’re not competing with them, because it’s your condo.
Condo Hotel Verse Time Share Upkeep
Most timeshare units require the “owners" to share the responsibilities of maintenance and upkeep of not only the unit, but the common areas of the resort as well. Timeshare owners must often elect people to a homeowners’ association that, in turn, handles maintenance, oversees the expenses of the property, and selects a resort management company.
By comparison, a condo hotel already has a management company in place to oversee the hotel and resort aspects of the property. This management company also assumes responsibility for the maintenance and upkeep of your condo unit when you’re not there. Most condominium hotels, because they are also five-star resorts, have daily cleaning services and a full-time maintenance staff. This frees you, and the other condo owners, from the responsibility of electing a homeowners association, or finding a management company.
Resale value
In an article titled “Time and Again: Buying and Selling Timeshares and Vacation Plans" the Federal Trade Commission is quick to point out that if you purchase a timeshare and later decide to sell it, it will likely sell for “a good deal lower than what you paid."[1] While neither timeshares nor condo hotel units are meant to be strictly investment properties, the fact is, most people want to purchase property that will appreciate over time.
In contrast, though condo hotels are a relatively new concept, all indications are that re-sale values will increase (significantly in some cases). One reason for the difference in resale value is that a condo hotel is an actual residence. When you purchase a condo hotel unit, you’re not buying something as ambiguous as time, you’re buying real property. This fact alone makes a condo hotel unit more appealing than a timeshare.
Though there are many other differences between condo hotels and timeshares, these are the most important and most universal. If you’d like more information about condo hotels or Miami Real Estate, contact the Realtors at Hansen Homes.
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