Consumers unfamiliar with the concept of a vacation rental may confuse it with the seemingly similar, but distinctly different, timeshare. A timeshare can still be rented as a vacation rental should an owner decide to put his owned week(s) on a vacation rental program. Many timeshare resorts offer quarter-ownership which offers the owner 13-weeks of ownership and, therefore, more weeks to offer for rental.

A timeshare is a piece of real estate—often a fully furnished condominium—that is jointly shared by multiple owners. While different types of timeshare ownerships exist, in general, each owner bears a portion of the responsibility, along with the right to a segment of time in which he or she is granted sole use of the property. Timeshare resorts allow financially qualified guests to rent and tour their unowned properties and then make those properties available to the guest for purchase. Timeshare owners can also choose to bank their week with and exchange company such as RCI, or rent the unit

Although lower rents for vacation rentals by owner were once the norm, this is not always the primary benefit. Quite often a vacation rental will feature more amenities and features, such as more space, fully-equipped kitchens, sports and beach equipment, games, DVD libraries, books, etc. Owners managing their own properties tend to be more aware of wear and tear and have better cash flow to use to maintain and upgrade the property. Perhaps the primary difference is that vacation rentals tend to offer more space and the advantage of sampling what life in one's destination is truly like for the locals.