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Completely confused...making profit off timeshares?

PeakRunner

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I agree with other responders -- Don't buy to do rentals. Buy to use, but make sure you will use it. Once bought, the present market is flooded with owners trying to unload to escape maintenance fees, so don't think you can easily withdraw. On rentals, from my limited experience in major markets, rental is possible but takes attention and effort. Figure on some losses before learning how to optimize a rental operation. But if you plan well, a failure to rent turns into a forced vacation of your own at the place you tried to rent to others. Finally, children will probably not want your timeshare, so don't buy thinking you will be giving something of value to your children by inheritance.
 

MOXJO7282

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What I'd like to do is identify the cheapest week that generates the highest profit margin rental.

My best is MOW plat + that is still under $1000 MF ($999) and it rents for $3k plus. I did spend $32k for that week but it does generate a nice rental profit margin.

I'm sure there are some other Marriotts or other brand name that genrates a nice profit margin. It has to be a 2BDRM though, no 1BDRM would.

So what is the cheapest week that will consistently bring in $1000 plus in profit margin? These are the weeks you would need to stockpile to develop a profitable business.

Any Marriotts under $10k that you can label can't miss rentals?

A GO gold OF can be had for probably $9k and that brings in $1000 plus in rental profit margin.
 

AwayWeGo

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[triennial - points]
You Typed A Mouthful.

The uninitiated thinking they are getting a great buy will be looking to dump them themselves in a year or two.
And not just the uninitiated.

The Chief Of Staff & I (no way timeshare experts but at least semi-initiated) bought two -- 2 -- nice eBay triennial points timeshares in 2010 that we turned around & gave away for Zero Dollars & Zero Cents last year.

Who'd a-thunk ?

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

ronparise

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So, the former: resorts, not deeds. Thanks.


It is if you are trying to give advice to someone contemplating a business in this space.

I still dont understand your point; the ownership at a resort is indicated by a deed and having a deed indicates a resort...what the difference??
 

BocaBum99

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I know exactly what the formula is for Marriotts and its quite simple. Renting 2BDRM prime weeks. The question how much can you afford to spend to buy enough inventory to make a living off of it.

Knowing what I know from my ownership any of my properties qualify so let's say you were going to start your business right now.

Here's a few examples

Buy 10 plat Aruba Surf for $15k each. Profit is at least $1500 each easy.

So spend $150k = $15000 annual profit margin

Buy 10 MOW plat plus Ocenside units for $18k each. Profit is at least $1600 each week

So spend $180k = $16000 annual profit margin

So spend $330k and you can generate $30k + annually

That $330k is a depreciating asset which reduces your long term rate of return. And, you are only achieving a 9% return on invested capital. The deprecation is probably higher than the income. I make a better return doing nothing and investing my money in this dividend paying stock: SLRC.

To meet my screen, your Marriott's would have to pay back my entire $330k investment in the first year (I could liquidate my holdings in the first year and still earn my return) plus earn me at least $165k in gross income (before expenses). Tough, but not impossible, with a Marriott portfolio.
 

am1

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That $330k is a depreciating asset which reduces your long term rate of return. And, you are only achieving a 9% return on invested capital. The deprecation is probably higher than the income. I make a better return doing nothing and investing my money in this dividend paying stock: SLRC.

To meet my screen, your Marriott's would have to pay back my entire $330k investment in the first year (I could liquidate my holdings in the first year and still earn my return) plus earn me at least $165k in gross income (before expenses). Tough, but not impossible, with a Marriott portfolio.

Yes I would say that is an expensive hobby.
 

funtime

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Did the OP ever come back or is this a thread that just spun out of control? Funtime
 

bangerang

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I think it's safe to say that yes there are people who can and do make a living buying and renting timeshares or at least enough to cover their annual MFs and vacation expenses. They're not the norm though. The majority of owners should evaluate purchases based on their own use. That being said, I think it's naive to buy a timeshare without giving at least a little consideration to the ability of being able to rent it out at some time. Life happens to the best of us and in the long term scheme of ownership, everyone faces the possibility of not being able to use their time at some point. Granted you can't always predict what's going to happen to a property 10 years from now (after all Mexico once was a hot spot) things like seasonal weather don't change all that much.
 

bnoble

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the ownership at a resort is indicated by a deed and having a deed indicates a resort...what the difference??
You are thinking only points. There are plenty of (fixed/floating) week resorts where a few weeks have value, but most don't---almost any seasonal week-based resort. There are also plenty of mixed point/week resorts where the valuable weeks were never converted, and hence can't be booked on points. Likewise for 1-52 float resorts---many of those sold the last 1/3 of inventory (the crap no one wants) as 1-52 floats, even though you can only book the crap no one wants with them.

In short, and to use an example that you yourself know well: it's not as simple as "I can make a fortune renting Mardi Gras in New Orleans, so I just need a NO deed."
 

ronparise

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You are thinking only points. There are plenty of (fixed/floating) week resorts where a few weeks have value, but most don't---almost any seasonal week-based resort. There are also plenty of mixed point/week resorts where the valuable weeks were never converted, and hence can't be booked on points. Likewise for 1-52 float resorts---many of those sold the last 1/3 of inventory (the crap no one wants) as 1-52 floats, even though you can only book the crap no one wants with them.

In short, and to use an example that you yourself know well: it's not as simple as "I can make a fortune renting Mardi Gras in New Orleans, so I just need a NO deed."

I dont think we disagree, I think we are saying the same thing. The way I put it is that for a successful rental, you need a special week at a special place.

The week is important (the deed) and the place is important (the resort)

By the way, I reserved a Mardi Gras week with my wyndham points that I rented for $1500 (about $700 profit) and I own a Mardi Gras event week at the same resort that brought in $2900 ($1900 profit) In both cases the deed the resort and the time and the town were all important....The problem of course is I cant scale this up to the point that I can make a living. But it does give me a good model when Im looking at other possible purchases
 

BocaBum99

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I dont think we disagree, I think we are saying the same thing. The way I put it is that for a successful rental, you need a special week at a special place.

The week is important (the deed) and the place is important (the resort)

By the way, I reserved a Mardi Gras week with my wyndham points that I rented for $1500 (about $700 profit) and I own a Mardi Gras event week at the same resort that brought in $2900 ($1900 profit) In both cases the deed the resort and the time and the town were all important....The problem of course is I cant scale this up to the point that I can make a living. But it does give me a good model when Im looking at other possible purchases

Focusing on holiday weeks is a great way to make your annual vacations free. To earn a living in rentals, you have to move beyond those special events/dates. You have to find a market and a sustainable low cost supply.
 

timeos2

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The one way (at least for awhile)

The more I think about it there IS a way to make money in resale timeshares but most here probably couldn't stomach the risk or the method.

Become a PCC type. Tell people you'll take $3000+ and they'll be out of their timeshares forever! Then don't actually take title and if it can be sold for a dollar or less great - you make thousands. If not you quietly disappear as best you can (living in timeshares and using an anonymous PO box paid with cash might help with that) and by the time they find out you've scammed them & they still owe all the fees and own the property they'll never find you.

Of course the law might and that could ruin any profits but if you're the risk taking type - that buying a timeshare to rent or trade today also qualifies - then this is one of the more profitable routes to go.

In other words thinking you'll make a killing or even just a living on the vast majority of timeshares out there is less than a pipe dream. It's a losers money pit for most that even dabble in it. If it were easy then many would be doing it and they most certainly are NOT!
 

e.bram

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Timeos2:
For a little more effort and expense you dump them in a LLC or Corp. , try to rent or sell them and go belly up eventually.
 

ronparise

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Focusing on holiday weeks is a great way to make your annual vacations free. To earn a living in rentals, you have to move beyond those special events/dates. You have to find a market and a sustainable low cost supply.

Exactly what I said.. "the problem of course is I cant scale this up to the point that I can make a living"

and Ill add this

with few exceptions, I dont think there is anything where the annual cost ( mf plus amortized purchase price) is low enough to make a profit renting except the special event weeks and holidays

I think however, Ive stumbled on one of the exceptions...I sure hope so I own 7 weeks there and am looking to add several more this year.
 

ronparise

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so you guys are going against the conventional wisdom here and saying its easy to make a living renting timeshares?...just buy a bunch of those easy to find prime summer or ski weeks and they will rent well


Low cost prime weeks are what Id call an exception... low cost and prime just dont often go together...


I dont get it; on the one hand you seem to be saying its difficult to make any real money renting timeshares, and now on the other you make it sound like anyone could do it.

What am I missing?
 
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vacationhopeful

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BocaBum99 and MOXJO7282 have VERY different business models. And very different cashflow incomes, ROI and net income level. Ron, please re-read this thread looking not for the ease of renting or what season or place, but the business model.

Like the differences in real estate agents for commerical properties and the suburban condo. Very different businesses and ROI.
 

am1

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I do not think anyone will say that it is easy.

There is all kinds of risk. Not being able to find a renter for a week is down low on the list.
 

vacationhopeful

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I do not think anyone will say that it is easy.

There is all kinds of risk. Not being able to find a renter for a week is down low on the list.

Well stated. A special assessment due to a major weather. An elevator failure (yes, that happened at one tall building RECENTLY). A water cooler on a roof (A/C system) was a $500 SA. Economic failure of owners with disposal income or paying MFs. Airline fares or airlines terminating service to an region.
 
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