By M. Beddingfield
With the tight economy, more people are skipping vacation this year and their timeshare weeks are not being used. Are you one of the many who are considering renting out your unit? Does it sound like a good way to recoup some of the yearly maintenance fees? Does it sound like a no-brainer, easy stuff, just rent it and everything is hunky-dory? Nope. It’s not as easy as all that.
First you will need to decide how much to charge. You can base it on what comparable resort units are renting for or the cost of your yearly maintenance fees. You should know however, that by the time you take into consideration the current market price for rentals and pay advertising costs, it’s possible that you will do little more than break even. In fact, you may draw the shorter stick and suffer a loss.
You will need to call your exchange company and your resort to find out what their policy on renters is. Try to get them to send you a copy of the policy so you can read the fine print.
Who you are going to rent to? Will it be family, friends or stranger?
Let’s say you want to rent to strangers and decide to use a rental agency. You go online and start looking for a listing agent. Legitimate listing agents which will deal with resort units are few and far between. This is because the rental market is full of con artists looking to make a fast buck. They often charge large up-front fees and there is no guarantee that they will find a renter. You would be better off to place your own ads on classified websites or in local newspapers.
Next, when someone answers your ad, you have to determine whether they are honest, trustworthy people. Why? Because you could be responsible for any damage, no matter how slight, they cause to your unit. It would be a good idea to run a background check on the perspective renter. It’s also imperative to draw up a rental agreement and require any monies be paid up-front. If a group of people want to rent your resort property, it’s important to have someone designated as responsible for anything that might happen.
But, let’s say you all ready have someone who wants to rent, be it friends or family. These are people you know and trust. This should be a piece of cake. You’re ready to hand them the keys and wish them Happy Vacation. But wait just a minute, you still need to find out the resort’s policies on rentals and draw up a rental agreement. The purpose of the rental agreement is to protect you and the person you are renting to. This could save a lot of headaches and heartache if any problems should occur.
It’s important to understand that there are tax implications to renting out your property. The monies gained from rental properties are generally considered income and as such are taxable. A timeshare is no different than any other property when it comes to renting. The only exception to the rule is if you own more than four weeks at the same resort. Then you would have to use more than fifteen days and rent out less than fifteen days, so few people would qualify. While you can itemize deductions, such as advertising costs, maintenance fees and depreciation, very few owners can qualify to take advantage of any kind of rental loss.
Renting is not as easy as it sounds like it should be. However, if you are careful and aware of the pitfalls, it is a possible option when you can’t use your week or cancel a booking. Just don’t expect to make money when doing it.