Practical tips for renting out a timeshare
- By Nick Stoles
- Published 01/3/2009
- Finances
- Unrated
Practical tips for renting out a timeshare
Buying a timeshare can be an excellent option for you if you vacation regularly and prefer to stay in a location or resort that is familiar for you. Most people who buy timeshares actually use them personally, setting a schedule that matches the week their timeshare falls on. However, in case you can't make it for that particular period of time, it would be a good idea to rent out your timeshare. That way, it won't go to waste and you could actually make some money out of it. Here are some practical tips you can use when renting out a timeshare:
Do it yourself.
If you do not wish to do the legwork necessary for renting out a timeshare, your timeshare resort could actually do it for you. That way, you save yourself from marketing, advertising and negotiating.
However, you might want to reconsider. First of all, your week's worth of share may not be rented throughout. Guests may just come in for 2 to 4 days, which means whatever profits you earn may not be maximized. Next, the resort will charge you a fixed commission, which can range from 30% to 40%.
If you go with a broker, the same thing could happen, although he'll probably charge you a lower commission rate of 20% to 25%. Furthermore, if he's a busy broker with plenty of timeshare clients, your share may not get the attention it deserves.
If you choose to do it yourself, you're most likely to find the best deals, particularly because you'll be putting in more effort in marketing your timeshare.
Determine the right rental charge.
Your goal is to make sure that the whole week is rented out, just to make sure you maximize your profits on your timeshare. Figure out how much to charge for your share, not only so that you could turn a profit but also to make it more attractive to potential vacationers. Research this figure carefully so you could offer competitive prices.
Advertise, advertise, advertise.
Exhaust all available advertising media you can find to promote your timeshare. If possible, do this weeks ahead of time so you have plenty of room to make adjustments. Look for online and offline classifieds, particularly those that cater to the industry. Sites running ads for timeshare resorts are more likely to attract the right kind of people to your ad.
Check out auction sites. Plenty of timeshare owners use these sites to advertise their available shares. Work with realtors as well, particularly those who regularly put up ads. Some may even be promoting units for your particular resort company, which means you're more likely to target the right market segment.
Draw out a rental agreement.
Unless you know the person very well and could trust them, make sure to have a rental agreement ready that you and the second party can sign. Write down all the terms of the agreement you want to include, along with any conditions you might want to implement. If you had informed your renter about any conditions verbally, include these in the agreement. Include the period of time of the rental, location, exact address, price and other conditions you discussed.
You might also want to include a clause stipulating any fees you might want to charge in case the renter suddenly backs out of the agreement. Last minute changes can spell a mini disaster for you, wasting not just your time and effort but also your potential profits. Consider if charging a fee is a good idea.
Do it yourself.
If you do not wish to do the legwork necessary for renting out a timeshare, your timeshare resort could actually do it for you. That way, you save yourself from marketing, advertising and negotiating.
However, you might want to reconsider. First of all, your week's worth of share may not be rented throughout. Guests may just come in for 2 to 4 days, which means whatever profits you earn may not be maximized. Next, the resort will charge you a fixed commission, which can range from 30% to 40%.
If you go with a broker, the same thing could happen, although he'll probably charge you a lower commission rate of 20% to 25%. Furthermore, if he's a busy broker with plenty of timeshare clients, your share may not get the attention it deserves.
If you choose to do it yourself, you're most likely to find the best deals, particularly because you'll be putting in more effort in marketing your timeshare.
Determine the right rental charge.
Your goal is to make sure that the whole week is rented out, just to make sure you maximize your profits on your timeshare. Figure out how much to charge for your share, not only so that you could turn a profit but also to make it more attractive to potential vacationers. Research this figure carefully so you could offer competitive prices.
Advertise, advertise, advertise.
Exhaust all available advertising media you can find to promote your timeshare. If possible, do this weeks ahead of time so you have plenty of room to make adjustments. Look for online and offline classifieds, particularly those that cater to the industry. Sites running ads for timeshare resorts are more likely to attract the right kind of people to your ad.
Check out auction sites. Plenty of timeshare owners use these sites to advertise their available shares. Work with realtors as well, particularly those who regularly put up ads. Some may even be promoting units for your particular resort company, which means you're more likely to target the right market segment.
Draw out a rental agreement.
Unless you know the person very well and could trust them, make sure to have a rental agreement ready that you and the second party can sign. Write down all the terms of the agreement you want to include, along with any conditions you might want to implement. If you had informed your renter about any conditions verbally, include these in the agreement. Include the period of time of the rental, location, exact address, price and other conditions you discussed.
You might also want to include a clause stipulating any fees you might want to charge in case the renter suddenly backs out of the agreement. Last minute changes can spell a mini disaster for you, wasting not just your time and effort but also your potential profits. Consider if charging a fee is a good idea.
Nick Stoles
Nick Stoles has contributed many articles on Timeshares topics like timeshare rights. Want more timeshare tips? Visit http://www.financecontrols.com for more information.
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