Timeshares as a Real Estate Investment

In the right circumstances, buying a timeshare can be an exciting new way to take your vacation. It has been debated for many years, however, whether timeshares are a potential opportunity for savvy investors.

Historically, some people have been known to make money by buying up several cheap timeshares before a major boom in the tourism market, or holding a deeded fractional ownership for several years while real estate prices are climbing. It can be quite difficult, however, to consistently make money from a timeshare as a long-term income investment.

The reason for this is largely due to high maintenance fees, which can be a significant drain on rental revenue, especially during the low season when demand for vacation accommodation is low.

If your resort of choice has a fairly flexible rental policy and the management company takes a reasonably low share of the profits, it's generally possible to make some rental profit during the height of the high tourist season. Your chances of making an overall profit, however, will largely depend on your ability to at least break even during the low season.

Before purchasing a timeshare as an income investment, it's highly advisable that you demand a full print out of their vacancy rates over the past several years, so as to determine whether the chances of consistently generating a profit are realistic.