How do you sell a Co-Ownership Share vs a Timeshare?

When it comes to deciding between a timeshare or co-ownership, understanding the property selling options available to you when the time comes is essential for ensuring long-term peace of mind. Our comprehensive guide will equip you with the knowledge to make informed decisions, exploring the differences between selling a timeshare and a co-ownership share, as well as highlighting key considerations to help you navigate the market with confidence.

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How Timeshares Work

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A previously popular property ownership model, with a timeshare, multiple individuals share the rights to use a vacation home, usually located within a hotel or resort, with each owner allotted a specific time period each year to use the property. A key aspect is that you are only purchasing usage rights, rather than actual property ownership, although timeshare owners still have to share in the responsibility of maintenance fees and property management costs, which can increase dramatically over time. As a long-term financial commitment, it is essential to understand that there may be certain clauses within the contract that affect timeshare resale and restrict return on investment. 

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An Overview Of Co-Ownership

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Shared home-ownership involves purchasing a share of a property with a number of other buyers, granting each owner a fraction of the equity and usage rights. Co-ownership works differently to timeshares, some of the benefits include lower maintenance costs and more flexibility in terms of usage arrangements. Most often pertaining to higher-end properties, this model is ideal for those who would like to enjoy luxury properties without the hassle of full ownership responsibilities. The concept has gained significant traction across Europe and the US in the last few years as a co-ownership investment due to providing a lifestyle upgrade while also being a tangible asset that can appreciate over time.

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Timeshare vs Co-Ownership: Your Property Selling Options

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1. Sell back to the company

Timeshare: Also known as a deed-back program, this allows you to sell your timeshare interest back to your developer. However, it is important to note that you do not receive any money in return for a deed back – it can only save you future costs in terms of maintenance fees and mortgage payments. Not all resorts and timeshare developers offer this option and there may be certain conditions in order to qualify, such as being up to date with payments and having your account in good standing with the resort. In fact, it’s often the developers’ preference not to accept deed-backs due to the depreciating value of timeshares. 

Co-Ownership: Unlike a timeshare, co-owners enjoy an equal share of the properties and own 100% of the homes – August does not own any equity. Therefore, instead of buying your share back from you, we will assist you in finding a buyer using our extensive secondary market. We’re typically able to secure share resells within days as we consistently have a waiting list of buyers looking to enter a new Collection and, since a resale share has the benefit of immediate use, this therefore adds a premium to the price of your share. Additionally, you can be assured that the selling price is set by you, in dialogue with August.

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2. Sell independently via the resale market

Timeshare: You can find your own buyer for your shares, however, you will need to check if your purchase agreement allows you to sell directly to a new owner or if your timeshare developer has ‘right of first refusal’ on buy-backs. Additionally, there may be stipulations within your contract that prevent you from selling your shares unless the mortgage is fully paid off, for example, which restricts you from selling until a certain period of time has passed. If you are able to sell directly, because timeshares typically depreciate in value, it is unlikely that you will recoup all your expenditures (including the purchase price) – although you may feel that it’s worth it in order to free you from the stress of owning something you no longer want. 

Co-Ownership: You are free to find a new owner and sell to them directly without any limitations placed upon the sale. The only charges you will need to pay are trading costs and August’s administration fee. 

3. Utilise a timeshare resale company

Timeshare: As the property developer typically has no involvement once all shares have been sold, there are timeshare exit companies that specialise in re-selling shares. However, since there are many fraudulent companies operating, it is always necessary to carry out thorough research to find a legitimate operator and check their credentials. They may have a network of potential buyers, although it’s worth bearing in mind that they charge a hefty fee for facilitating a sale on your behalf.

Co-Ownership: As you own your share of the properties outright, you are able to use an external company to assist you with a resale without any restrictions. However, it is always advisable to speak to August as we have a liquid secondary market. 

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Key Considerations

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When selling either a timeshare or a co-ownership share, the below factors can impact both the process and outcome.

1. How long will it take?

Timeshare: Selling a timeshare can take several months, or in some cases years, due to market competition and the specific nature of timeshare contracts.

Co-ownership: The sale process for co-ownership shares tends to be quicker, especially as the properties are usually in a desirable location and are well-maintained by the co-owners. 

2. How is market value assessed?

Timeshare: Market value is often influenced by location, season, and the reputation of the resort or hotel.

Co-ownership: The market value is typically assessed based on the property’s overall market value, the equity share, and recent sales of similar properties in the area.

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Although we have detailed the practical differences in how you sell a timeshare vs a co-ownership share – from utilising resale agencies to selling independently or working with the company. However, there are also other aspects to consider. 

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Timeshares involve purchasing usage rights only and therefore come with restrictive contracts that affect the long-term value, so they are typically viewed as a depreciating asset due to their inflexible nature – requiring you to find a buyer who is interested in the specific access time that you have agreed to. In direct contrast, co-ownership offers outright property shares and the flexibility to resell whenever you choose, without any restrictions. The fact that the properties are luxury homes, specifically chosen for their charm and elevated amenities, makes them a valuable asset. In fact, the majority of August homeowners who have sold a share have done so in order to move to another Collection as opposed to exiting.

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By evaluating all your property selling options and taking into account more nuanced differences, you will be able to navigate the market confidently and ensure a smoother, stress-free selling experience whenever you feel the time is right. So if you’re choosing between a timeshare or shared home-ownership, our aim is to help you achieve your long-term property goals by highlighting the drawbacks and benefits.

With the August ownership model, our expert team of global advisers are here to help you every step of the way – from advising you on asset value to sourcing legitimate buyers and navigating the legalities. To find out more about the co-ownership model, book a call with a member of our Advisory Team today.

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