Buying a timeshare to rent?

[horsecreek]

With prices so low, why not buy the timeshare and rent it out. When prices rebound, unemployment back to 5-6% (someday) then maybe sell? I'm seeing a timeshare prime week that isn't selling, could pickup for a couple hundred. Maintenance fees around $800. The management company will rent the unit for you (for a %) but then you wouldn't have to worry about damages. The profit (1099) would only be a few hundred but it wouldn't require much time or risk. This particular timeshare (beach) always rents out the summer. Is anyone else doing this?

 

[DeniseM]

Renting through the management company can be risky - you need to get the terms in writing. Often, once you give your week up, you can't get it back whether they rent it or not, and sometimes they only rent part of the week and you lose the rest.

You don't have to worry about damages anyway - at most resort, the renter has to produce a valid credit card at check-in and any charges or damages go on the credit card.

The most profitable way to rent a timeshare is to do it yourself.

 

[kaio]

I would avoid doing such a thing. If you want to make money renting with no contingencies, then find someone who wants to rent their week; get their set asking price, and find a renter at a higher price and keep the difference. Then you are not held to MFs / usage if you cannot find a renter at more than the MFs/asking price.

 

[horsecreek]

Are many/some having success?

O.K. then renting yourself. Are people having success? I would just use if it didn't rent, can't go to the beach too often.

 

[horsecreek]

There are always risks.

I'm just trying to measure risk/reward. I own individual stocks and see how thing don't behave logically. The beach rental seems to have $800-1000/week outlay with ever raising dues. The rent is $1200-1500 and may not rise. But for a few phone calls and some mail the risk reward looks good?

 

[kaio]

I'm just trying to measure risk/reward. I own individual stocks and see how thing don't behave logically. The beach rental seems to have $800-1000/week outlay with ever raising dues. The rent is $1200-1500 and my not rise. But for a few phone calls and some mail the risk reward looks good?

Depends on demand of the type of ownership you are referring to.... what is the resort? and usage (IE: Floating weeks/fixed week)? Honestly, the risk does not meet the reward for most timeshares IMO if your intention is to rent first, use second.

If you rent at half the amount of the annual Maintenance Fees, you will have decent success in finding a renter for most ownerships. You have to have a good ownership or know the right supply of ppl willing to pay + top dollar for reward to exceed risk. IMO...

 

[horsecreek]

I hear what your saying.

Is anyone having success? When a resort is sold out during the summer then it seems finding the renter wouldn't be too hard. I realize that maintenance fees are often higher than the prevailing rental rates at many timeshares, I rent more time than I own, but in this case it sure looks right.

 

[timeos2]

Is anyone having success? When a resort is sold out during the summer then it seems finding the renter wouldn't be too hard. I realize that maintenance fees are often higher than the prevailing rental rates at many timeshares, I rent more time than I own, but in this case it sure looks right.

Even Associations often can't rent what they have as delinquent time despite often heavy advertising and walk ups. Trying to find a renter to pay a premium over the annual fee - when far too many owners usually are willing to take 50-75 cents on the dollar just to get SOMETHING - isn't a good, reliable income source. A few have done it but it's not getting easier as the prices are headed down not up while fees are tending to sky rocket. And there is always that dreaded Special Assessment that all too often comes along.

If you're looking for advice don't do it. It is a much bigger risk than you think. Be the renter taking advantage of all the deals not the one having to scramble to get 75 cents on your annual maintenance dollar.

 

[horsecreek]

Thanks

This is why I spent the big $15 for membership. I have learned so much since January. Thanks.

 

[Travelclam]

I asked the same questions myself

I can't say I have personal experience doing this as I am also quite new to this, but if your MF is low enough, the week is a fixed prime week in a location where there's high demand, and you are willing to do the rental yourself, I can see it would work. The key thing for me is to ask this question: what's the worse case scenario? If the worse case scenario (in this would be that you can't rent it out, and you have to pay the MF all by yourself and use the TS yourself so you won't feel like it was wasted) is something you can handle, go for it.

B

 

[MOXJO7282]

Many Marriott prime weeks rent for well over MFs but you have to make a decent investment to buy the resorts I'm referring to. All the units in my portfolio rent very easily to name a few.

 

[4Reliefnow]

Please let me know your success at renting timeshare.

I rented five or six times before I bought and usually paid $1,200 to $1,400 for the family holiday weeks - Christmas, President's Week, Easter. Now I have an extra week received with a purchase and nobody seems to be renting units. Six weeks of trying to rent a February week in Arizona on EBay, TUG, and Redweek. Look at completed auctions on EBay and only 5% of the listings actually sell.

How are you doing with rentals?

 

[ronparise]

Is anyone having success? .

Depends on how you define success......There are several folks here on tug that buy and rent the sort of weeks that you describe.. But you wont get many reporting on their success. for fear of divulging their trade secrets

 

[presley]

I don't think it is necessarily the best choice. I do, however, if it is a TS that you actually want and would enjoy using for yourself. That way, if the renting market is good, you can rent. If not, you won't care because you will have a nice vacation.

I saw a post earlier for a week at Grand Pacific Palisades for $700. for the week. The MFs are more like $1K, so that member isn't even trying to break even. There was another person trying to rent a Del mar week over Labor Day weekend that still wasn't rented a few days before check in. Those are just what I've seen here on TUG, but I assume that is pretty indicative of the rental market.

 

[4Reliefnow]

Rental Market Barometer? How you Doin?

Please let me know your success at renting timeshare weeks (seller).

I rented(buyer) five or six times before I bought and usually paid $1,200 to $1,400 for the family holiday weeks - Christmas, President's Week, Easter. Now I have an extra week received with a purchase and nobody seems to be renting units. Six weeks of trying to rent a February week in Arizona on EBay, TUG, and Redweek. Look at completed auctions on EBay and only 5% of the listings actually sell.

How are you doing with rentals?

How far ahead of time are people buying rental weeks?

How are your rental agreements compared to maintenance fees?

Thanks for sharing your feel for the real market!

 

[Patri]

Horsecreek, if you are willing to use the unit yourself if it doesn't rent, it would make sense to own close enough so you could drive. Is that what you are thinking? Otherwise, the airfare could kill any bargain of owning.

 

[janej]

I also found it much easier to rent in easy driving distance since I can post it on mailing list of my local community. It is much easier to get people to trust me when they know where I live and where my kids go to school. I also tend to know the market better especially when kids are out of school and many families tend to go vacation.

 

[timeos2]

Buying to rent, trade - anything but use is a big mistake

Five ways for 99% of timeshare owners to assure they will be unhappy:

1) Buy Retail. No exceptions in the long run.

2) Buy a resort/system operated / managed by the Developer rather than the independent owners and independent non-developer management.

3) Buy to trade not use at the resort.

4) Buy to rent and plan on making money.

5) Plan on making money on resale. Even a few hundred dollars

There are a few others such as buying where air/sea travel is required but those are the surefire way to become disillusioned at best and frustrated and beaten at worst. None more certain than any of those five.

 

[theo]

Numerically sound, but not in actual practice...

I would avoid doing such a thing. If you want to make money renting with no contingencies, then find someone who wants to rent their week; get their set asking price, and find a renter at a higher price and keep the difference. Then you are not held to MFs / usage if you cannot find a renter at more than the MFs/asking price.

A well and thoughtfully prepared owner rental agreement will very specifically prohibit any sub-lease beyond the signed agreement between owner and specifically named renter(s). This is the only name(s) the owner will submit to the resort for authorized access to the owner's unit and someone entirely different later showing up for occupancy is a scenario which is not likely to turn out well for anyone involved...

As to the plan for having the resort or its' management company handle a rental for an owner, several valid points have already been made above. I would just add that the customary commission via that uncertain route is generally 23-35% . Yes, the owner is "off the hook" for any occupant damages when the resort has handled the rental, but that's certainly a significant commission taken out of the gross rental figure.

In summary, buying a week with the sole plan and objective to (reliably) rent it out for a profit (with no intentions of ever using it yourself) is something which I personally would not endorse or consider. YMMV.

 

[theo]

Don't take an overly simplistic or rose colored glasses view of "renting"...

But for a few phone calls and some mail the risk reward looks good?

Formal, signed rental agreements should always be prepared and executed between owner and renter.

Life happens; renters plans suddenly change and they want "out" of the agreement. You then have to deal with the aftermath. Many "landlords" just take the position "...No refunds, it's your problem..."; you may or may not be comfortable dealing with the inevitable "pushback" to that position.

Hagglers will seek to haggle, sometimes ad nauseum. Meanwhile, the clock keeps ticking.

A thousand and one dumb questions about every imaginable amenity on the property and within the unit; having perhaps never been there yourself, you maybe can't answer any of those questions. (How many slices fit in the toaster? What is the water temperature in the pool? How are the restaurants in the area? Can you recommend some activities and places to me? What is the meaning of life?...etc., etc.).

In short, in my opinion time is money too. There might well be considerably more than "a few phone calls and some mail" involved in becoming a landlord, but you might have much more patience than I for it all.
I own what I own to use those the weeks; on the rare occasions when I have to rent out any of my weeks, I dread the rental process and the loss of my valuable time playing "landlord". Again though, YMMV.

 

[vacationhopeful]

As a property manager with years of experience, you MUST know what you are renting. Simply reading the Owner's Directory is not what the average tenant asks. Theo is absolutely correct - distances, activities, toasters, views, and the meaning of life (will my wife like this resort?). And it truly helps to know a KEY person or two at a resort where you send people regularly. Yes, resort personal are professional, but the absurd gets to them too ... then they boot your guests to the curb.

I have had the "con couple" who outwitted the front desk staff; thankfully I was the "guest" who tried to checkin near midnight finding them sleeping in my unit. They almost MET the local police after telling the front desk "we are in bed and will talk about this in the morning"; I had my own words for the staff who woke up their supervisor for advice -- "take security and beat on their door; order them to move. IF they do not comply, call the police and remove them from the property". Also, I have gotten a 6AM phone call and was onsite, to "walk" an inbound into a last minute unit reassignment and smooth over his ruffled concerns.

Still think it is a few phone calls?

 

[horsecreek]

I'm just amazed at the low costs of ownership.

With very prime weeks being given away it just seems that there are opportunities aplenty. I do rent in Orlando, Vegas, this summer in Branson and found a steal in Ireland (not a timeshare). One has to be cautious. But if I try to rent a beachfront, near me, nothing available or very high prices. I bought my timeshare just because I will go every year and want that lower price and availability. My biggest hesitation is special assessments and out of control maintenance fees. With more people wanting out of the low and shoulder periods the resort need to increase cost on those who remain. However I think this is temporary and most people want to vacation, I live for it. :whoopie:


I'm still figuring out retirement investments so I'm not likely to pursue this line of thought further and if it was easy I'm sure many TUGGERs would already be snatching up the good ones.

 

[timeos2]

With very prime weeks being given away it just seems that there are opportunities aplenty. I do rent in Orlando, Vegas, this summer in Branson and found a steal in Ireland (not a timeshare). One has to be cautious. But if I try to rent a beachfront, near me, nothing available or very high prices. I bought my timeshare just because I will go every year and want that lower price and availability. My biggest hesitation is special assessments and out of control maintenance fees. With more people wanting out of the low and shoulder periods the resort need to increase cost on those who remain. However I think this is temporary and most people want to vacation, I live for it. :whoopie:


I'm still figuring out retirement investments so I'm not likely to pursue this line of thought further and if it was easy I'm sure many TUGGERs would already be snatching up the good ones.

Your thought process is a good one. The key is that PURCHASE cost means nothing. No matter how high or low it is merely getting you the right (obligation) to pay the annual fees. Those are where the actual costs live. And they tend to go nowhere but up - often by amounts that far exceed inflation and rental fees.

You took a look and it doesn't make sense as you discovered. There are far better ways to potentially make a few bucks.

 

[theo]

O.K., I'll bite here...

... if I try to rent a beachfront, near me, nothing available or very high prices.

I'm no geography expert, but do tell --- what "beachfront" is "near" you in San Antonio, TX?

 

[AwayWeGo]

It Seemed Like A Good Idea At The Time -- & For A While, It Was.

Buying a timeshare to rent?

For a few years, we were able to rent out our own timeshares for a bit more than maintenance fees, then use the "bit more" for Last Call & Instant Exchange reservations at other people's timeshares for our own vacations.

We are not expert at advertising & marketing, so getting renters was always chancy -- although 1 family kept on renting our outstanding big Orlando 3BR timeshare 3 years in a row.

Last year, with the economy in free-fall, we chickened out -- lost confidence we could keep on renting out our big timeshare. So, being hooked on Last Call & Instant Exchange, we gave our own timeshare away el freebo (to a fellow TUG-BBS member).

Not saying we're typical, just that renting out timeshares is not a sure thing.

Full Disclosure: We still still own some timeshares, 1 biennial 3BR lock-off floating weeks unit & 2 dinky triennial points units -- also, a standard-grand 2BR unit at a far-off overseas resort that says it's converting to rental-only non-timeshare status.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​