The prospect of a fractional property initially entices many timeshare buyers as a long-term investment. They hope to offset their costs by renting out their timeshare during periods when they can’t use it. Sales presentations often highlight this potential income stream as a key benefit, making ownership seem more financially viable. However, once they sign the contract, owners often discover company restrictions and practical challenges to renting out their timeshare.
Promises vs. Reality
During sales presentations, potential buyers are often shown the financial benefits of owning a timeshare. The ability to rent out their unit when not in use is presented as a major advantage, promising a way to recoup some of the ongoing costs associated with ownership. This potential income stream is frequently emphasized to make the purchase seem more attractive and financially sound.
However, many timeshare agreements explicitly prohibit or severely limit renting out the unit. These contractual clauses can come as an unpleasant surprise to owners who had planned on rental income to help cover their expenses. For example, contracts might limit rentals to certain times of the year or impose additional fees and conditions.
A Flooded Market
Even when renting is permitted, the reality of the market can make it difficult to achieve the expected rental income. The short term rental market is often saturated, with more units available than there are interested renters. This oversupply can significantly drive down rental rates, making it challenging for owners to cover their costs, let alone make a profit. The disparity between the anticipated rental income and the actual market conditions can be a harsh wake-up call for many owners.
A Complicated Task
Managing rentals also involves considerable effort, including advertising, communicating with potential renters, handling bookings, and ensuring the unit is maintained and cleaned. These additional tasks require an investment of time, money, and effort on the part of the owner that they might not expect based on what was shared at the initial sales meeting.
The Resale Myth
Other timeshare owners are persuaded to purchase a fractional property with the goal of selling their contract when they’re done. Buyers are often led to believe their timeshare will retain or even increase in value over time, similar to traditional real estate. However, the reality is starkly different. Timeshares are notorious for their poor resale value, often depreciating significantly the moment they’re purchased.
Seeking Assistance
The disparity between the promises made during timeshare sales presentations and the reality of ownership can leave many feeling misled and financially burdened. Understanding the limitations and challenges associated with renting out a timeshare is essential for anyone considering this type of investment.
Given these challenges, many owners seek professional assistance in exiting their contracts. The team at Vacation Ownership Consultants is happy to consider your story and develop options for your situation during a free consultation.
