Renting Timeshares?

Hi guys,

I’m net to the forum and fairly new to REI. I know the basics but that’s about it. Anyway I was looking on eBay the other day and saw some timeshares going for cheap. Anyway, I was wondering if anyone had thought about buying deeded timeshares and then renting out their week to a person using one of the timeshare rental websites or a travel agency or something. Anyway, let me know if you think that might be a good idea. I mainly thought of it because they’re cheap and I want to cashflow something for very little money. Thanks everyone!

In general timeshares have a lot of fleas. By that I mean that I mean that they have a lot of barriers to making money unless you buy the whole complex and run it as a timeshare. First one advantage to real estate is that there is no other place where your place is. With a timeshare there are basically 49 other places where yours is (the other 49 weeks of the year. They usually keep 2 weeks open for maintenance.) The other problem is that the real cost of a timeshare is not the purchase price but the maintenance fee. This can be $200 to $500 per week. You only own 1 week and they charge you the $200. But they are charging the other weeks $200 per week also (that is $100,000 per year per unit). So if you pay the timeshare off completely and you don’t get your week rented, it will cost you $200. Also when your tenant shows, up, they are going to try to sell him the week right next to your week. You will not get repeat customer because he will own the unit also. What you want to do is buy the building, and sell it as timeshares. Say the building has 200 units. You sell each week for $5000 give that all (or most of it) to the salesman for selling it. You can operate that place for $50 per door per week I guarantee it. That will cost you about $500,000/year to run the place. The fees you get will total $2,000,000/year. I will bet that after taxes insurance and operating costs you end up with $1,000,000/year in your pocket and you can live in the tropics.

Thanks for the info. That cleared up a lot of things. It sounds like I might want to start pursuing SFH REI more heavily.