The timeshare resale market is often viewed as an area of opportunity for vacation owners to “make some money” when times get tough or they grow tired of their interval. Nearly every day, we speak to someone wondering, “Can I rent my timeshare when I can’t use it?” While those posing this question are sometimes convinced they can profit off of something that has inevitably failed them, most simply aren’t sure what’s true. Like we’ve mentioned in previous articles, this oblivion is mostly due to the deceptiveness of the initial sales presentation.
During the purchase itself, many buyers are told they can easily resell, rent or even refinance the purchase at some point if it better suits their needs. A number of things are strategically communicated to prospects in order to put them at ease about the perpetual commitment. Even when some buyers ask the right questions, sales teams know how to respond in a vague manner while using perks and possibilities as a distraction to concerns. Floating the idea that buyers can effortlessly resell or rent a timeshare is down right criminal to say the least. But resorts aren’t the only entities that deceive fractional owners.
The Idea of Timeshare Rental is Meant to Seem Promising.
When consumers find supporting misguidance from resale programs or bias timeshare resources, it encourages them to waste a tremendous amount of optimism and capital on something that was never truly opportunistic. While the message relayed might seem promising, it’s hardly true. Buyers should already be leery of this after the timeshare presumed expectations that didn’t match the experience. Any fractional owner or person intrigued by vacation ownership should look at all information about timeshares as questionable at best.
Let’s make one thing clear, we’re not here to persuade you that our perspective is better or that timeshare cancellation is your best option. We simply believe that owners deserve to know how to critically analyze what they’re told regarding a purchase of this magnitude. If you’re really wondering, “Can I rent my timeshare,” then you ought to know what you’re actually getting yourself into. In order to explain what the timeshare rental process really entails, we have to be able to look at the entire picture. This way, you’ll be able to see that our perspective is valid and that intent isn’t to mislead you further.
3 Types of People That Buy into Renting Timeshares.
If you took the time to poll every owner that tried to rent out a vacation property, a majority of them would tell you to avoid the attempt at all costs. We know this because a good number of them eventually call us. When buyers initially experience remorse, they normally consider selling the timeshare first. This is because they mistakenly believe the property is an asset and holds value. But once they realize getting rid of a timeshare just isn’t that simple, renting tends to always be the fallback plan.
Unfortunately, the decision to continue pursuing resale by leasing intervals is usually a costly one. While many fall into the timeshare rental trap out of desperation, there are others that truly believe renting their timeshare is a great idea. Below, we do our best to give you an idea of their reasoning and motives. Challenge yourself to see if you fall under one of these categories. If so, try to honestly justify your optimism by the end of this article.
1. Gullible Owners that Don’t Challenge Sales Pitches.
The biggest income opportunity for timeshare companies is vulnerable buyers. While many new owners believe the sale is over once the contract is signed, it most certainly is not. The sales cycle for vacation ownership never ends. Because of this, gullible buyers are often preyed upon throughout their ownership experience. These types of people often paint a target on their backs for their willingness to say “yes” to resort upgrades or suggestions. Sadly, most of these recommendations only benefit the timeshare or its affiliates.
When they repeatedly do as they’re told and trust the pitch instead of investigating every solution, they often find themselves in a lopsided situation they can’t escape from. If you’re asking the resort, “Can I rent my timeshare,” you have to understand why they’re going to tell you “Yes.” Using their resale programs allows them to continue collecting your payments with the potential to make even more money off of your inconvenience. The same goes for third party rental platforms that promise you returns.
Those that are easily persuaded – by either or – rarely last long as owners due to the contractual binds they place themselves in. After maximizing options in an attempt to “fully enjoy an experience” they’ve yet to receive, many have little to show for it. When they reach back out to the resort for guidance, many are sold on points programs or the concept of selling or renting timeshare weeks to make some of their lost money back. These people often have the money to spend, but no cognizance of how they’re being taken advantage of. The elderly normally reside in this category.
2. Owners that View Timeshare Rental as a Saving Grace.
While many timeshare owners look to leasing because of an overall disappointing experience, some have no choice but to decrease their overall spending. Whether vacation ownership was the culprit for financial hardship or not, all fractional owners end up paying more than they budgeted for. This usually causes unexpected financial problems for those who had no business owning one in the first place.
In case you didn’t know, resorts specifically target low income households because it allows them to hold the user hostage when funds run out. These types of people are easily persuaded because vacationing is currently considered wishful thinking. An impulse purchase usually transpires when they’re offered free gifts and “once-in-a-lifetime” vacation packages that seem to be affordable. But once they realize they’re in over their head, they frantically look for a way to recoup any of their losses just to stay afloat.
Whether broke vacation owners desperately try to rent their timeshare through a third party or the resort itself, they’re often relieved by the promises they receive. Some are so ecstatic about the possibility of offsetting their costs that they blindly pour more of their precious capital into advertising in hopes of expediting the timeshare rental process. When timeshare renters or buyers never surface, the outcome is monetarily devastating for those already low on cash. Look, if you’re struggling to keep up with payments, leasing the property will never be your saving grace. There are just too many retail travel options to compete against.
3. People Who Buy Timeshares With Intent to Rent Them Out.
Over the years, we’ve spent an awful lot of time analyzing online searches regarding timeshare ownership. When it comes to the search phrase, “Can I Rent My Timeshare,” we found that some inquiries are performed by aspiring investors. The problem is – like we said before – the online guidance regarding timeshare rentals can be quite misleading. This causes a number of aspiring entrepreneurs to pull the trigger on what seems to be a promising opportunity with an easy return.
At the same time, multiple timeshare purchases aren’t always pursued as initial investments. First time buyers with high income levels often purchase additional timeshare packages with the intent to rent when the initial purchase doesn’t work out. They believe a quantitative approach will increase their chances at usage while they make money on unusable intervals. While this may seem like a smart solution to a less-than-stellar timeshare, what happens when you can’t rent or get rid of either property?
What ends up happening is, the financial competence of these types of buyers allows them to be patience while they await a sale. Most view timeshare rental or resale like that of selling or remarketing a house. But it’s nothing like that. Although a lack of interest during the first 6 months may seem normal to them, a year or more of no return can financially cripple their aspirations. The demand for vacation ownership isn’t anything like the residential real estate market – and it should never be viewed that way.
When you assess the reality of timeshare sales, people end up buying because they’re aggressively sold or misled about investment return. Nobody – besides the resort, resellers or investors – are looking to rent a timeshare. They’re looking for those asking, “Can I rent my timeshare,” because they want to take advantage of their desperation so they can make money. Trying to make supplemental income on something people aren’t looking for is a good way to lose a lot of money. Truth be told, many owners can’t even get rid of timeshares for a dollar.
The Disadvantageous Cost of Renting A Timeshare.
Since we’ve hit you with a lot of hypothetical scenarios thus far, we can understand if you still think you can successfully rent a timeshare. So, let’s take a look at some of the disadvantages that renting brings before breaking down how much it will more than likely cost you to try.
1. A Large Investment of Time and Money.
Once owners begin the timeshare rental process, they’re normally caught off guard by how much time it takes them to setup the listing. Not only will you need to provide ample descriptions, a list of amenities and up-to-date imagery, but you’ll also have to manage availability and booking. Although the initial listing cost is fairly cheap, costly upgrades are usually offered to help you with setup and increase the exposure or appeal of the property.
While every rental platform is different, most recommend advertising to improve results. What was originally viewed as an easy way to profit off of an unused week can quickly add hundreds of dollars to your monthly timeshare expenses – with no money earned. This is especially frustrating when buyers spend countless hours managing their listing.
2. No Guarantees Should Catch Your Eye.
Even though a timeshare rental pitch may sound great, you have to understand that nobody can make promises regarding resale outcomes. Unless there is some sort of money-back-guarantee in writing, you can’t buy into the things you’re told. Far too many owners confidently partake in rental opportunities without much thought because they’ve been reassured the result will be favorable. But even when resale reviews seem positive, you have to learn to separate sales pitches from reality in the timeshare industry. Like most relief options, they’re nothing more than a revenue ploy.
3. Timeshare Rental Scams Are Real.
This disadvantage is pretty self explanatory. Whether you’re looking to rent a timeshare due to dissatisfaction or supplemental income, predatory agencies are built to collect payments and drag out the process. Since most scams are run by former timeshare employees, the operation knows how to dupe and persuade vulnerable owners. They know how to create phony company information so they’re perceived as a valid business with a reliable reputation. Like resale and exit fraud, rental scams should concern you.
4. An Unwarranted Peace of Mind.
One of the most overlooked elements of misleading timeshare rental practices is the simple fact that most owners believe they’ve found resolve. In the midst of financial hardship or extreme inconvenience, they temporarily feel as though they can see the light at the end of the tunnel. Sadly, many continue the cycle of regret when they’re left feeling duped and betrayed by another entity that promised relief. Creating peace of mind with empty guarantees while the owner makes payments is pretty low.
Breaking Down the Actual Cost of Renting Timeshares.
When you take the time to analyze the overall expense of timeshare remarketing, it can be quite staggering to say the least. In this example, let’s assume the aspiring renter pays around $4500 per year for their mortgage, maintenance fees and special assessments. We believe this is a generous number (below average) which breaks down to about $375 per month. If the owner were to spend $1000 on remarketing setup, management and advertising, it would add $83 to their monthly total ($458). If they purchased an additional timeshare interval with the intent to rent the property, then we can double this total ($917).
After inspecting some online reviews for “successful” rental solutions, we found that most happy owners typically waited at least 6 months before they saw results. This means, the average reseller spent nearly $3000 before any transaction occurred. While they may have collected a few thousand for the week, they’re still on the hook for the remaining balance. If you owned 3 properties and only rented one interval then your expenses could be extremely one sided – and not favorable by any stretch.
Keep in mind, this scenario is assuming you find someone to lease the timeshare. If you’re experiencing financial hardship, you can see why this isn’t a wise choice. If you’re purchasing multiple units with the intent to rent or sell, then you’ll be digging quite the hole to kick off your investment project. If you don’t take the time to research the purchase initially or any other option throughout, you could find yourself swimming upstream for quite some time.
So Do I Rent My Timeshare or Not?
In conclusion, renting timeshare intervals is one of the biggest mistakes fractional owners make. While you may not value what we have to say – because we specialize in terminating timeshare contracts – we hope this article has given you some insight on the reality of reselling your perpetual property. We understand that a number of third party agencies and biz operations have had success with timeshare rentals, but it doesn’t necessarily mean you’re equipped to experience the same.
Many of these resale companies know how to prey on desperate timeshare owners, purchase intervals for nothing and target unexpected consumers with what seems like amazing deals. Unless you’re a con artist yourself, it’s going to be difficult to compete with these guys. They know how to publish mass income opportunities and “stay at home jobs” that attract uninformed consumers – you don’t. In most cases, you probably don’t even have the capital available to pull it off. Even Disney timeshares, that are high in demand, are hard to resell or rent on your own.
If you really think, “I can rent my timeshare and make some money,” we encourage you to explore other options. Instead of waiting years to master the process and coup a few thousands dollars, you could cancel the timeshare agreement altogether and move on. What could potentially turn into a loss that exceeds tens of thousands of dollars could eventually be avoided with a one-time-payment that’s significantly less.