Most timeshare resorts will allow owners to rent the week(s) they are entitled to, at their primary or home resort, with few restrictions. In fact, many timeshares who rent their properties present the rental opportunity as a way for families to subsidize timeshare ownership costs, and make valuable use of the time, if they don’t plan to personally use it for a vacation.
If you plan to exchange a week (or two) at your primary resort for another location, through an exchange company, know that you are unlikely to be approved to rent that week. Most exchange companies prohibit rentals outright; if you are not an owner at the resort, you (or your renter) may not be as vested in following the rules or caring for the property at the same level as an owner would.
There are a lot of articles and resources online, that discuss strategies for rental of personal timeshare vacation weeks. What we would like to talk about, is the impact that timeshare rentals can have on owners, who have bought into a resort, under a zero-rental policy. Is your timeshare starting to more aggressively market non-owner rentals? How much of the accommodation inventory is being allocated to public (non-timeshare member) rentals, and how could that impact both your enjoyment, and the cost of ownership over the long-term?
What Owners Need to Know About Renting Their Timeshare
If you aren’t going to be using one or more weeks that you’ve paid for, the idea of renting your timeshare makes practical sense. You aren’t going to profit from it considering your annual costs (unless you are lucratively renting several properties as a business investment). But, renting out a few weeks can help the timeshare pay for itself, and that’s why owners consider it an affordable option.
Are private rentals of your timeshare permitted?
Does the timeshare require a minimum rental fee to be levied?
Are you the owner, required to provide notice and a signed guarantee, before you rent your timeshare?
How are damages to the timeshare inspected, and reported on, and do you require additional insurance to cover those damages, if you intend to rent your timeshare?
One of the biggest risks for timeshare owner, is in choosing the wrong renter. Just like being a landlord, you have little to worry about, if you plan to rent your extra weeks to family, friends or work colleagues. But if you are advertising the availability of your timeshare to the public, you could find yourself in a situation where thousands of dollars of damage is done to your timeshare; which you will have to compensate the resort for.
Timeshares routinely position rental as a great option for owners, but it can be expensive to advertise your extra weeks, and it can involve legal liability for damages, that can cost the owner far more than they anticipate. Something to consider, if you plan to rent your unused weeks.
What Can Happen to Resorts with High Non-Member Rental Rates?
Resorts are businesses. If they are unable to maintain a high rate of occupancy for timeshare members, the resort may decide to start renting to the public. The problem with this scenario, was recently demonstrated in a class action law suit by timeshare owners, against The Manhattan Club (see our earlier article). Are timeshare owners okay with public renters? It turns out, that most are not.
When an individual or family buys into a timeshare, they expect a certain level of service, and accommodation. Part of the vacation experience, is being surround by other timeshare owners, who will treat the facility with care, and integrity. When timeshares decide to rent to the public, the way a hotel or motel would, it can result in noise, damage to the property, and even criminal activity that isn’t consistent with the timeshare experience that they want to enjoy.
Timeshare owners to buy into family themed resorts, can be upset by short-term guests, that may contribute to a non-family friendly environment which can negatively impact their vacation time. These facts include large parties, drug or alcohol use, explicit behavior from young renters, and more, which are all factors that cannot be controlled by staying in a public hotel.
The alternative is a members-only environment that is marketed as an advantage, to adult vacationers and families. It is easy to understand why timeshare owners become outraged, when public rental becomes a facet of their home resort. Damages done by public rentals, can over time, drive up the maintenance costs and assessment fees, for timeshare owners.
Should timeshares continue to add public rental availability to their resort offering? If current members have a contract that states that public rental is not permitted, as a service guarantee to timeshare owners, they can be held legally liable in court, for breach of contract. That was demonstrated in The Manhattan Club suit.
But if the industry continues to escalate the costs of timeshare ownership, including large assessment fees and annual increases to maintenance fees, it may be a reality that vacation club members may have to contend with in the future.