Chapter 4
Timeshare Rentals

Not going to use your time­share this year? You can rent your time­share week to some­body who will use it. There is a very active time­share rental mar­ket, and rent­ing your time­share week (assum­ing you have a high sea­son week) is not dif­fi­cult to do.

Friends and Family

It’s always worth ask­ing friends and fam­i­ly whether they’re inter­est­ed in rent­ing your time­share. Broad­cast an email to every­one you know. You won’t find this the most fer­tile source of renters, but it’s worth a try.

Be sure to rent it far in advance, and col­lect the rental fee imme­di­ate­ly. Oth­er­wise friends or fam­i­ly will can­cel at the last minute and leave you scram­bling find some­one else to rent your time­share week.

Local market

If your time­share resort is near the metro area in which you live (i.e., with­in a three-hour dri­ve), you have a ready mar­ket in the metro area in which to adver­tise your time­share. Not every­one wants to trav­el to the oth­er end of the coun­try on vaca­tion. Many peo­ple are just look­ing for rest, relax­ation, and recre­ation. Resorts close by will do just as well as resorts far away.

In addi­tion, adver­tise your time­share week for rent in the locale of the time­share in news­pa­pers and on local web­sites (e.g., Craig’s List).

Local Property Manager or Rental Agency

The town in which the time­share resort is locat­ed may have a prop­er­ty man­age­ment firm or rental agency that has cre­at­ed a mar­ket for time­share rentals. You can take advan­tage of such a mar­ket by list­ing your time­share for rent. The fees for this kind of ser­vice, how­ev­er, may be more than you want to pay. Nonethe­less, this is a rea­son­able means of rent­ing your time­share week.

Rental Website

There are plen­ty of web­sites fea­tur­ing time­shares. Some even spe­cial­ize in rentals. These are great places to rent your time­share because there are plen­ty of cus­tomers vis­it­ing these web­sites to find vaca­tion housing.

Newsletters

Putting an ad in a newslet­ter that’s rel­e­vant to recre­ation­al vaca­tions is also a rea­son­able strat­e­gy for rent­ing. This is usu­al­ly a strat­e­gy that will cost you (for adver­tis­ing) but is typ­i­cal­ly not over­ly expensive.

Resort

At some time­share resorts, the man­age­ment oper­ates a rental pro­gram. You com­mit your unit to the rental pro­gram, and the resort rents it for you. The fees for doing so are large, but this is often the eas­i­est and best way to rent.

Broadcast Approach

You don’t want to adver­tise your time­share week for rent in every pos­si­ble place. That’s prob­a­bly overkill and will take too much of your time and effort. At the same time, lim­it­ing your effort to just one mar­ket­ing sys­tem in one place may not get the job done. Get your list­ing out to sev­er­al dif­fer­ent places.

Information

You are very famil­iar with your time­share resort; but I can guar­an­tee you that most peo­ple don’t know any­thing about it. In any list­ing or adver­tis­ing always include com­plete infor­ma­tion on your time­share resort. Also include links to appro­pri­ate web­sites where poten­tial renters can get more infor­ma­tion on your resort. In addi­tion to gen­er­al infor­ma­tion, include spe­cif­ic infor­ma­tion about your time­share week includ­ing the start­ing and end­ing dates and the unit num­ber. Fur­ther, include full infor­ma­tion on how prospec­tive renters may con­tact you both by email and tele­phone. Post photos.

If you want to be assured of nev­er being able to rent your time­share week, put as lit­tle infor­ma­tion as pos­si­ble into your mar­ket­ing effort.

AirBnB

At AirBnB.com you can list your time­share week for rent. You have to play by the AirBnB rules, but the chances of finan­cial suc­cess are good. Renters also have to play by AirBnB rules, which gives you pro­tec­tion from the mis­con­duct of renters that you wouldn’t oth­er­wise have. One big advan­tage is that AirBnB han­dles all the finan­cial arrange­ments as well as oper­ates a superb ser­vice and website.

Rent Amount

Rent for time­share weeks is all over the place. You’ll find that some time­share week rent are at below the annu­al main­te­nance fee. You will also find some rent at twice the annu­al main­te­nance fee. It’s dif­fi­cult to know what fair mar­ket val­ue (FMV) rent is. Nev­er­the­less, you need to find out.

If you list your time­share week for rent at under the FMV rent, you’ll prob­a­bly rent it quick­ly but in effect cheat your­self. If you list it for rent at far above the FMV rent, it’s unlike­ly that you’ll ever rent it. There­fore, it pays to do enough research to estab­lish the FMV rent; and it makes sense to set your rent at that amount.

Guest Fee

Many time­share resorts charge a guest fee when you trans­fer the use of your time­share week to some­one else. It does­n’t mat­ter who the some­one else is. It could be some­one in your fam­i­ly or out­side your fam­i­ly. It could be a friend. And it could be a stranger. But you’ll have to pay the fee in advance, or the guest will not be allowed to occu­py the time­share unit. The fee might be nom­i­nal, or it might be more than you want to pay. But that’s just the way it is.

Don’t expect your renter to pay this fee or any oth­er fees. The renter should be only required to make only one pay­ment, and that’s the rent. Con­se­quent­ly, you need to take any fees or oth­er costs into account when you set the rent.

Far in Advance

Start mar­ket­ing your time­share week as far in advance as pos­si­ble. The longest time on the mar­ket has the best chance of pro­duc­ing a good result: get­ting a pre­paid renter. If you wait to the last minute, you’re unlike­ly to rent your time­share week; but if you do, you will like­ly rent it at reduced rent.

Prepayment

Always require pay­ment imme­di­ate­ly upon reach­ing agree­ment to rent your time­share week. If you allow the renter to wait until a month or a week before the date of the time­share week, you will have a good chance of get­ting stuck with an unrent­ed week.

You should nev­er get angry at some­one, how­ev­er, because they won’t pre­pay. If you treat them cour­te­ous­ly, there’s a rea­son­able chance they will get back to you lat­er when they are more cer­tain of their vaca­tion plans and rent the unit from you with a prepayment.

Rental Agreement

Find a time­share rental agree­ment on the web, down­load it, and use it. Fill it out com­plete­ly and have the renter sign it. It should include claus­es that state the agree­ment does not go into effect until the renter has pre­paid the rent and that the rent must be paid imme­di­ate­ly or by a cer­tain dead­line. Make sure all the blanks in the con­tract are filled in.

Trust

There has to be trust between the own­er and the renter. As an own­er, you want to make sure that your renter does­n’t tear the place up and leave you with the cost of clean­ing up the mess. A renter is going to be con­cerned that when she writes a check to make the rent pay­ment that she will get the time­share week in return.

In the case of a sale of the time­share, the trust fac­tor can be large­ly sat­is­fied by clos­ing the trans­ac­tion in escrow. But for a rental trans­ac­tion, that’s too expen­sive and too much trou­ble. Trust must be estab­lished in some oth­er way.

On many web­sites (e.g., eBay, AirBnB) buy­ers and sell­ers devel­op rep­u­ta­tions. You can check a renter’s rep­u­ta­tion to deter­mine whether they are a respon­si­ble per­son. And they can check your rep­u­ta­tion. But what you do if you rent the time­share week out­side a web­site with such a trust mechanism?

One solu­tion may be to ask the renter where they have estab­lished a rep­u­ta­tion in online com­merce. You can go to that web­site (e.g., eBay) and view their rep­u­ta­tion. Like­wise, you might offer your rep­u­ta­tion from a web­site on which you buy and sell goods. A renter can then go to that web­site and see your reputation.

Anoth­er way to estab­lish trust is just by talk­ing with some­one on the phone. Although not infal­li­ble, a phone con­ver­sa­tion can give you a rea­son­able idea of whether the oth­er per­son is trust­wor­thy or not. You can also ask ques­tions aimed at estab­lish­ing trust.

Customer Service

You are the sell­er and the host for your poten­tial renter. Do every­thing rea­son­able in your pow­er to make the rental trans­ac­tion easy and to assist the renter to have a hap­py and pleas­ant vaca­tion stay. Not only is this the right thing to do, but there is sig­nif­i­cant oppor­tu­ni­ty for repeat busi­ness in future years.

Transportation

For many time­share resorts, a renter may not know how to get there. For instance, for my Col­orado time­share the only way to get there is by cor­po­rate jet, pri­vate air­craft, or car/truck. There are no trains, bus­es, sched­uled air­lines, shut­tles, or stage­coach­es that will take you there. It’s nice for renters to know the trans­porta­tion sit­u­a­tion ahead of time so they can plan accord­ing­ly. Pro­vid­ing such infor­ma­tion is an essen­tial cus­tomer service.

Phone Call

I enthu­si­as­ti­cal­ly advise you to have at least one phone call with the renter. Trans­ac­tions that take place only with text via email or oth­er text for­mats are nor­mal­ly not very sat­is­fy­ing to humans. A cor­dial phone call to dis­cuss the use of the time­share is often very sat­is­fy­ing to both par­ties and also works to estab­lish trust. If the phone call turns out not to be cor­dial, that may be a sig­nif­i­cant clue that the poten­tial renter is not some­one with whom you want to do business.

Effort

All in all, rent­ing your time­share week is per­haps the best way to get some finan­cial return in any year that you can­not use it. But it takes effort to pro­mote and rent a time­share week. If you’re not will­ing or don’t have time to make the effort, you’re not like­ly to be successful.