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Timeshares is good investment or not. (by Peter C.):

carvana wrote:

MNOP

Your business model is to buy timeshares in the resale market and resell them at a profit in 1 to 3 years. The average $428 MF suggests the timeshares are somewhat less than average in quality and yet you manage to resell at a profit. You indicated you have eight timeshares sales that will close this month. Is that typical? You may consider it proprietary information that you prefer not to disclose but I think it would be very helpful to the many members of Redweek to know what venue (internet? - if so provide links) you use to purchase, rent, and resell these timeshares.

I suspect you buy foreclosed timeshares in bulk at a significant discount from resorts using an in-house closing firm and have a sweekheart deal with the resorts allowing you to utilize their services in renting and marketing the resorts. Right?

Quality is in the eye of the beholder. Are DRI Greensprings, Powhatan, Kaanapali Beach Club, Sedona Summit, and Scottsdale Villa Mirage lower quality? They are all superior to most timeshares, but not the best. I believe my ownership definition in terms of weeks rather than units makes a big difference in the maintenance calculation.

My business model is to buy timeshares and rent them, selling units is secondary. My point about reselling at a profit in 1-3 years pertains to buying units now during this crisis, treading water renting them out, and selling for a profit when the economy improves. Some people buy stocks, others buy real estate. Some real estate people specialize in residential, others do commercial, you might consider timeshares!

I'm not selling 8 units per month (I wish!), I'm buying. This is a pretty bad time to sell. I troll listings and do what I've despised others for doing - rediculous low ball offers. I also bid on multiple auction sites. I have not moved to forclosed bulk purchases yet as I'm more focused on buying and renting than buying and selling. I just sell when the price is right ... none in the last two months. Since most units I buy are high point value or lockoff, my ave maint per unit is more like $900-$1,100. I just lower my cost per "week" to under $500 thru resort discounts, upgrades and splitting lockoffs.

I haven't been crass enough to suggest an owner pay me to buy their timeshare but a few I've taken for $0 purchase. I bought a DRI Powhatan wk 22 and 50 from an owner for $0 and sold the Wk 22 for $3,000 and Wk50 for $1,000 earlier this year. My last sale was a DRI Powhatan Wk27 for $7,500 two months ago, although I don't expect that to happen again for some time. I have indeed begun to close my own units in some cases. I can do it faster and of course for a lot less money.