Thinking of creative ways to make some extra cash using that timeshare vacation rental? Many timeshare owners will explore options like renting out their timeshare in order to help offset their annual maintenance fees. Some potential buyers have the intention to rent out their timeshare at the sales meeting to make it a worthwhile "investment", while others may have been deceived by pushy timeshare sales people into timeshare ownership because, "you can rent your timeshare when you aren't planning to use it."
Regardless of how you entered into a timeshare agreement, there are some plausible options for a timeshare owner to at least cover part of their annual timeshare costs by choosing to rent out the timeshare during its available window of time.
If you're considering renting your timeshare, be sure to first do your due diligence by ensuring the original agreement allows you to use your resort unit for something like a temporary rental program. Although timeshare point systems might allow flexibility in dates and locations, some exchange companies will not allow someone to put those points toward timeshare rentals for third parties; this same restriction could apply for traditional resort units as well. Ultimately, this is definitely a situation when you'd like to ask permission rather than forgiveness, so do your homework first!
Before you can break down daily rental charges or determine the overall costs of a timeshare's rental, it's important to determine how the resort unit will be managed. Some preliminary concerns that should be addressed might include:
Regardless of how an owner might choose to manage the timeshare's nightly rent, it's important to have a rental agreement for each party that chooses to rent your timeshare. This agreement should be between renters using the timeshare and owners of the timeshare. If an owner chooses to hand over the rental reins to a management company, that rental agreement is usually generated by the management company as well.
When pricing the nightly rental rate of your timeshare, it's important to evaluate internal and external pricing factors.
Internal factors would include a timeshare's annual maintenance fees as well as your personal debts related to the timeshare. External factors would include nightly rental rates charged in the nearby rental market, the costs charged by the rental management company (if that is the management route you choose), and any extra fees that might be charged to timeshare owners by the timeshare resort company itself for any activity outside of the owners' usage of the timeshare.
As stated earlier, most overhead responsibilities, including advertising on any website, property photos (including resort amenities),reservations, check in, and direct contact or communication with short term guests, are handled by management companies if that is the route that owners choose to take. These timeshare rentals services, similar to long term rentals, are charged depending on the agreement between owners and management company. These types of fees should definitely be factored into the overall daily rental price.
Ultimately, if you don't calculate a reasonable daily rent price for both the owner and the renter, you will waste weeks of time and thousands of your dollars when you attempt to rent out your timeshare. As the owner, you must factor in the costs needed to cover (or mostly cover) the average maintenance costs charged by the resort. However, the price you charge for daily rent must also be reasonable and accurately reflect the current market's prices.
How close is the timeshare in proximity to any cities or vacation amenities? If your potential vacation resort spot is nowhere close to a city or ideal location, it will be hard to justify the right rental price for the unit each night. Similar to property appraisal and pricing in a traditional real estate market, no timeshare renters will want to pay top dollar and then have to commute to an area farther away just to get the most out of their vacation.
The value of your timeshare to a potential renter will be seen on a very similar model to long term rental property value. An immediate, telling detail in the value of your timeshare can be seen by looking for nearby timeshare resorts in proximity to your resort location.
Is the timeshare unit size really family friendly? Again, much like traditional real estate, the timeshare market tends to demand family-friendly, multi-bedroom units for most families to accommodate everyone in their group. If your resort unit is not as accommodating, you may find it difficult to rent the timeshare week.
To put it plainly, history proves that timeshares are not good financial investments. If you are considering a timeshare purchase solely to make extra cash, it'd be wise to look elsewhere for viable financial investments. Many timeshares tack on unnecessary fees that could be spent on actual vacations at four or five star resorts after all those extra associated costs and transactions are added up!
If you have already purchased a timeshare unit and find it to be useful some weeks but not others, you could look into rental services in order to cover some of the annual maintenance costs and related fees that often plague timeshare owners. It's not likely that you will cover all the costs or make a profit on your timeshare, but it may help cover some of your fees.
No matter your choice, it's important to underline the fact that every process (whether it be buying, selling, cancellation or timeshare rental) associated with timeshares is a very hands-on process for you, the owner, and this can only be outsourced so much. Do your research and be sure to understand each step of whatever process you choose. Choose wisely!
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