During my trip home to Minnesota this week, my dad and I talked time shares, traditionally the red-headed stepchild of the vacation rental business. He’s owned two weeks in a beachside property on Sanibel Island, Florida, since 1987, which he bought pre-construction, and I’ve often coveted the building.
“I’m one of the few people in the world who doesn’t have complaints,” he said. While it’s been a good investment for him over the years (it may be one of the few timeshares in Florida that’s actually appreciated), he gave me a couple of caveats as far as making them work.
It’s all about location. His timeshare does well because it’s on the beach in Florida in an exclusive area. Meaning, space is at a premium. It’s hard to create more shoreline. People who buy timeshares inland often run into trouble because developers overbuild, meaning your investment loses value.
And time of year. My dad bought his weeks to coincide with the height of spring break season. Even though my sister and I are long past school years, that week remains popular, even during economic downturns.
Rent it yourself, if possible. My dad finds his renters through Craigslist so he can avoid the 35% fees that his maintenance company takes. It’s worked out well; in recent years, he’s had the same renter take the weeks. They’ve even had coffee together!
Be careful who manages it. My dad’s timeshare is managed through Hilton, obviously a big name in the business. Lesser-known companies can go out of business, meaning the maintenance can go downhill – but the fees won’t stop. .
And check who else has bought. As with any property, you want to make sure that you have reputable neighbors. My dad cautions against being the first buyer into a development, as you run the risk of making an investment in a property that doesn’t sell out. “There’s a big difference between the guy who rents a place for a night with his six kids and an owner who put down $10,000,” he said.
Go for the long haul – or stick with renting. The resale value on timeshares is notoriously low. There’s no sense buying a condo in Orlando if you can regularly rent, without the fees. Plus, what happens when your Disney-loving kids grow up? “You better make sure you want to vacation there for the rest of your life.”
Readers: Occasionally on Saturdays, I may run paid posts which help keep my blog running. This post was brought to you by Timeshare Secrets, which specializes in information about Marriott Timeshare Resales.