Owning a Vacation Home: Timeshares vs. Condo Hotels

Beautiful canal of Fort Lauderdale, Florida.
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Investing in a second home can be lucrative if you treat it as a rental property. However, there are specific rules you need to keep in mind.

For example, if you rent out your vacation home for fewer than 15 days, reporting the income you’ve earned from that isn’t necessary. You can also deduct up to $25,000 yearly if your AGI (adjusted gross income) is below $100,000 and if you actively manage the property.

Now, if you’re seriously considering owning a vacation home, it helps to know more about condo hotels and timeshares if you’re not planning to buy a traditional house. Here, we’ll discuss timeshares vs. condo hotels, so you can decide which is the better investment.

What Are Condo Hotels?

Compared to regular condos, condotels or condo hotels are operated as a hotel. That means they come with cleaning services, registration desk, etc.

If you own one, you can opt to place it in a rental program. Then paying guests can rent it out, allowing you to earn some income and offset your ownership costs.

Of course, as the owner, you can also use your condotel for personal use. Like timeshares, condo hotels are usually in resort areas and other desirable locations. You and your guests get access to amenities and features offered by the condotel management, including swimming pools, tennis courts, and so on.

What Are Timeshares?

A timeshare is a property with multiple owners. Timeshares can be condos, apartments, vacation resorts, campgrounds, etc.

If you’re considering purchasing a timeshare, you need to remember that while you don’t have full ownership of it, you can still use it for a specific period, usually a week.

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Keep in mind that not all timeshares use the fixed week system. Some use points, while others implement a “floating” week structure. The last two are more flexible, meaning you can schedule your vacation anytime if you reserve the unit well in advance.

The points system is the most adjustable of the three timeshare options since it allows internal and external exchanges with other resorts. You can learn more about this structure by checking out how to transfer destinations club points.

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Owning a Vacation Home: Some Pros and Cons of Timeshares and Condotels

If you only look at the initial costs, timeshares are more affordable than condo hotels. However, if you plan to sell your timeshare, you should understand that it could be challenging, mainly because they depreciate from the time they’re purchased.

Still, it’s not a bad idea if you plan to use your timeshare as a vacation home year after year. It’s even better if you can find renters during your allotted week or two.

As for condotels, the services available to you and your guests are often closer to a luxury hotel. That’s why you should be ready to pay more for maintenance services. On the upside, you can use it anytime you want as long as you don’t treat it like a permanent residence.

Vacation Home Ownership: Which Is Right for You?

Now that you know more about condotels and timeshares, which option appeals to you as a vacationer or investor?

If you need more tips and advice on owning a vacation home, we have tons of articles that might interest you. Feel free to browse around for more related information.

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