The days of a single type of homeownership are over. It’s not breaking news – we’ve just evolved our idea of ownership and created new models to account for changing lifestyles and demographics. Whether you’re on the Miami boardwalk or downtown Toronto, there are new ways to own real estate today. 

Enter co-ownership and timeshare. Although these terms are used interchangeably, they are very different in structure, costs, legality, and more. Before we talk about the differences between the two models, let’s quickly understand what these terms mean.

What is Key’s Co-ownership model? 

Co-ownership, or co-equity, is a novel way to own a home where you co-own your home alongside another entity. At Key, which leverages a co-ownership model, if the value of your condo is $600K, you would make an initial down payment of $15K, which represents 2.5% ownership. You pay monthly payments on the portion of your home that you don’t own. As you increase your ownership stake beyond the initial 2.5%, the monthly payments decrease – the more you own, the less you pay in rent. 

When you decide to move out you will receive your home equity plus any appreciation back. You can always increase your equity at your own pace, either through a lump sum or monthly payments. 

Here’s Mark McLean, Key’s Head of Business Development explaining our model: 

@lifeatkey

Reply to @eshaaaa9 Here’s how it works! #realestate #homesweethome #fyp #toronto #416 #realtor #invest

♬ April (No Vocals) – The Young Ebenezers

What is Timeshare? 

Timeshare, on the other hand, gives the buyer the right to use the property for a certain period of time every year – usually 1-2 weeks. Each property has multiple buyers who receive the same time period with the same rights of usage. The number of owners usually ranges between 26 to 52, depending on the length of stay. It’s essentially a prepaid vacation once a year where timeshare owners don’t have to book hotels or make reservations.

The cost of a timeshare is the market value of the property divided by the number of purchasers. If the condo costs $600K, and there are 26 owners with two weeks of allocated time each, then each would pay $23K plus maintenance fees. Timeshares comprise cottages, parts of a resort, vacation homes in exotic locations instead of condos in big cities. 

Comparison between the two 

Co-Ownership Timeshare
Actual Ownership Yes No
Building Equity  Yes No
One co-owner Yes No
Length of Stay Security of tenancy Limited
Ease of selling 75 days’ notice  Hard to exit

This comparison chart highlights a number of differences between co-ownership models and timeshare. One significant benefit with co-ownership is that you have the ability to own and grow home equity. This is a highly important investment, as home equity is a central way to build personal wealth. Additionally, unlike timeshare where you have a small window of time to stay in your property, with co-ownership you are the sole co-owner which gives you more security of tenancy. 

If you’re interested in co-owning real-estate with Key, learn more about how it works and how Key compares to other models such as renting and traditional ownership.