There are some people who believe that management companies are prioritizing the rental market over the exchange of owners.  This hasn’t been proven true, but many feel they are having an increasingly hard time finding desirable exchanges.  Many owners do not want exchange weeks to be available for rental at all, unless the weeks go unclaimed as exchanges.  When you are in the market for a timeshare think about how you feel about timeshare rental and how it is handled with certain properties. This is another way to insure that you are getting what you are paying for.

There are a number of sources for timeshare rentals. New resorts may offer units at a competitive rental rate to entice prospective owners. The competitive price may require attendance at a sales presentation. Resorts may rent their abandoned or foreclosed units. Exchange companies offer unused inventory. Owners who cannot use their weeks often rent their units.

Timeshare rentals can be found on sites such as redweek.com and craigslist.org. Finding a timeshare rental is the easy part, avoiding scams and understanding the process is the hard part. Requirements to pay the full fee up front should be met with skepticism. Some rental agreements may require a full payment up front, most do not. Always use an escrow service when possible.

Understand all of the fees involved.

• What is the fee per day?
• What percentage of the total fee is required for a deposit?
• Is there a damage deposit?
• A/C fees?
• Utility surcharge fees?
• Parking fees?
• Pet fees?
• Taxes?
• What is the total fee for the entire stay?

A written consent form should be provided to the renter. The consent form should name the renter and it should explicitly authorize the renter to use the unit for the agreed upon times.  The renter should be aware of check in/out times. The renter should also review resort policies.

Never pay up-front fees. This is generally a good rule when selling or renting a timeshare. Scammers prey on desperate timeshare owners looking to rent or sell their week. Most legitimate businesses will not contact you with offers dependent on a fee. There are some legitimate, and beneficial, companies that do require up-front fees. Some legitimate timeshare sales companies require up-front listing fees, however these companies never contact sellers/renters to solicit fees.  Check the BBB’s website for a listing of the company if you are unsure. Do not pay a fee if there is any doubt in your mind.

The scam follows this basic script, although there may be slight variations:

A scammer will contact a timeshare owner offering their timeshare for rent. The scammer will often represent themselves as a party interested in renting the timeshare at a higher price than listed. For this example we will say the listing price for the rental is $1,000 for one week. The scammer will offer a $1,500 for the week, with the payment in the form of either a check or a money order. There are a number of common explanations for the higher price. The most common explanation is their employer has already written the check in the higher amount. The scammer will also explain that they most of the difference back. They would like the timeshare owner to deposit the $1,500 check and mail the renter a money order for $400, the timeshare owner should keep the additional $100 for their trouble. The timeshare owner accepts the offer. The owner receives the check in the mail, deposits the check, and sends out a money order the same day for the $400 difference.

On the surface this appears to be a legitimate transaction. The timeshare owner is usually happy to have their week rented, until they receive a call from the bank. Realization of the fraud comes about when the timeshare owner is notified that the check was fake and the $1,500 has been removed from their account.

Victims of the fraud often do not understand why it took so long for the bank to determine the check was fake. The scammer took advantage of “the float”. Regulations require that banks make funds deposited from a check available immediately.  The float is the difference in time between the check being presented for payment (the deposit) and the check being payed by the issuing bank. In the case of a fake check, there is no issuing bank. The scammer depends on the victim sending a money order before the bank determines the check to be fake.

The scam may have variations. The story is the easiest component to change, and there are many variations. The scammer may send a check, cashiers check, or a money order. In some scams the check is valid, but the check is canceled after the scammer receives the money order from the victim.

Timeshare owners can avoid the scam by following these simple rules:

• Do not deal with people through email who want you to mail them a money order, or any other money. The one exception related to rentals is a deposit. Only send a check, a check that you can cancel, if a deposit needs to be mailed out
• Most scammers want to communicate exclusively through email. They prefer email because it is easy to lie about your identity behind an email message. Call the renter to verify information. Most scammers will not follow through with a phone call.

Number 2: Set your price.  Check out the competition. Look into what other rentals in the area are offering and at what price. You do not want to make the mistake of pricing yourself out of the market. Make sure you are offering your rental at a competitive price to comparable rentals  in the area.

Number 3: Advertise, and start the process early. Renters rarely plan their vacation a week prior to their departure. Start advertising at least 3 months prior to availability. Advertising 6 months to a year preceding availability will yield better results.

Number 4: Don’t break the bank. There are numerous inexpensive and effective options available to meet your advertising needs. Go for maximum exposure online by posting to free services; craigslist.org is always a good start. Be careful with “paid” online listing services but make sure to list the rental on ebay.com. Traditional offline resources are still very effective and word of mouth can really pay off. Add a listing in the local classifieds, if the price is right.

Number 5: Do not put yourself in a situation of desperation. When this happens you may make poor choices about the type of renters you are getting. You do not want to rent to 15 spring breakers in your 3 bedroom unit. That is asking for more problems then you need. Putting the property at risk of damage is not something you want to get billed for later!

Number 6: Rent weeks, not days. It may be tempting to split up a week in order to accommodate renters who only want to rent a couple of days. Dealing with one renter is easier than dealing with multiple renters, multiple contracts, and in some cases multiple fees.

Number 7: Contracts are important. You should use a contract. Work with your lawyer to draft a contract or make use of legal document services to obtain a standard timeshare rental contract.

Number 8: Keep a list of good renters.  Keep a list of past renters, that worked out well, and send them an offer to rent the week again. This can work well for both parties; Past renters may want to return, and you will be working with a known party. It may even save you advertising fees.

Number 9: Use an escrow service. There are numerous escrow services available that will enable a secure transaction.

Number 10: Let the resort manage the rental. Some resorts will take care of the process for you, for a price. The resort will take a commission of the rental price. Read the contract thoroughly if you decide to go this route. Make sure you have a good understanding of the complete process including when you will get paid and what fees are paid.