How Time Share Exchanges Work

If you own a timeshare, you do not need to go only to your specific unit every year, year after year. You can participate in a timeshare exchange and trade your week with an owner of a different timeshare at a different resort. This opens up a world of possibilities. An exchange allows a timeshare or vacation plan owner to trade units for a desired time with another owner who has an equivalent unit at an affiliated resort within the system.

Here's one way a time share exchange works: a resort developer has a relationship with an exchange company, which administers the service for owners at the resort. Owners automatically become members of the exchange system when they buy their timeshare or vacation plan. At most resorts, the developer typically pays for each new member's first year of membership in the exchange, but members pay the exchange company directly for each subsequent year after that.

Developers are not the only means of joining a timeshare exchange. Owners of timeshares can join exchanges directly themselves. In fact, when asked about timeshares, many owners will speak in terms of the exchange program that they are a member of, rather than the actual timeshare that they have a deed to. Some timeshare owners have actually never stayed at the unit that they own, but simply purchased a time share unit as a means into the exchange system.

To participate in a timeshare exchange, a member must deposit a unit into the exchange company's inventory of weeks available for exchange. When a member takes a week from the inventory, the exchange company charges a preset fee.

In a points-based exchange system, the interval is automatically put into the inventory system for a specified period when the member joins. Point values are assigned to units based on length of stay, location, unit size, and seasonality. Members who have enough points to secure the vacation accommodations they want can reserve them on a first-come, first-served, space-available basis. Members who don't have enough points may want to investigate programs that allow banking of prior-year points, advancing points, or even "renting" extra points to make up differences.

Whether the exchange system works satisfactorily for owners is another issue to research before buying. Keep in mind that, you will pay all fees and taxes on your time share unit involved in an exchange program, regardless of whether you use your unit or one belonging to someone else.

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