Holiday properties shared by users are known in our country as ‘time share’. Sharing the use of a property with joint ownership is known as “fractional ownership.” While they may sound similar, they are fundamentally different. Some key differences are:
Difference #1: Timeshares Typically Include Many Properties
When you own a timeshare, you often stay in different properties each time, which may not provide a sense of ownership and can feel similar to renting a hotel room for a specific period. On the other hand, with jointly owned property, it is like going to your own home or vacation house every year. The items there are familiar and personal to you. Over the years, the connections and relationships you build there will increase your sense of ownership and belonging to your home and the surrounding area.
Difference #2: Timeshares Have Many Owners
On average, only about 50% of timeshare owners actually use the property they own. Most of the people using the properties are non-owning tenants, leading to high usage traffic from multiple families using the same property. In jointly owned properties, only the co-owners use the property and subleasing is generally not allowed. This leads to a sense of ownership among co-owners, making it more special and enjoyable to use whenever it’s available.
Difference #3: Timeshares Resale Is Difficult
In timeshare projects, there is a significant difference between the amount paid for a unit during purchase and its actual market value. Marketing costs of timeshare projects for its developers are high, as the developers need to market the same product to a large number of people. This leads to a resale value that is significantly lower than the initial purchase price, making it nearly impossible to sell a timeshare on the second-hand market. Even if you manage to sell, the property is unlikely to have appreciation in value over time, making it not a profitable investment fort he buyer.
On the other hand, when you invest in a jointly owned property, every dollar you spend goes towards the property’s actual market value. This makes you a co-owner of the property’s true value. Therefore, if the property is later sold and has appreciated in value, you will profit proportionally equal to your share, making it a wise investment.
Difference #4: You Cannot Have a Right in the Management of Timeshares
As an owner of a timeshare, you generally do not have a say or any influence in the management boards of the project. Due to the large number of members and their minimal ownership shares in timeshares, the company that develops the timeshare project typically has full decision-making power and can take decisions on their own.
In the jointly owned property model, a small group can make decisions collectively, all property owners can be members of the management board, and everyone has an equal say in decision-making, fostering a democratic management style.
Difference #5: Buyers of Timeshares Tend to Have Lower Economic Strength
There is an economic disparity between owners of timeshares and those opting for joint ownership. While timeshares may attract demand due to their affordable prices, the quality of service and amenities received in exchange is considerably low. This can result in second-hand sales being sold at a loss or with minimal profit in best case scenario.
On the other hand, the joint ownership property model is preferred by those with stronger economic stability. Therefore, the investment per property is higher, and since the money paid is directly related to the property’s market value, the profit margin is higher. Due to these advantages, finding buyers in the second-hand market is much quicker and easier compared to timeshares.
Understanding the Differences and Legal Frameworks Between Similar Property Acquisition Models
Before making such an investment it is essential to research the differences, legal frameworks, and consumer rights between similar property acquisition models, such as timeshares and other similar systems, which are often mistakenly thought to be the same in practice.
An article shared by lawyer Uğur Yetimoğlu at the bar association explains how similar structures are used with different names worldwide and in our country, detailing consumer legal rights related to these models.