Make Money With Timeshares?
One advantage of investing in timeshares is that you can do it without much money. But of course timeshares make the most money for the initial developer. They get to take a little apartment or condo that is worth perhaps $140,000 and sell the use of it for as much as $7,000 for each week of the year. You can do the math.
Many of these timeshares have gone down in value after the initial purchase. They have a bad reputation because of the "free vacation" offers and hard sales techniques used to sell them. People have also found that with the annual fees and the difficulty in planning their schedule around the week or weeks that they have use of their unit, they are not such a great idea for everyone. It can be simpler and even cheaper to just pay for a nice hotel at the same destination.
However, people do like the idea of owning a timeshare in a ski resort in Colorado, or on the beach in Florida. And they do work for some buyers. It sure is cheaper than buying a condo that you only get to use a week or two a year anyhow. For example, here in the ski resorts of Colorado, you can buy a 1-bedroom timeshare (one week per year) for as little as $4,000, and a many 2-bedroom units go for under $10,000.
How do you make money as an investor with these? You can't just buy cheap and resell for more. The spread is too narrow to be worth the trouble. Suppose you get a unit for $3,000 and sell it for twice that. You will be lucky to find such a deal, and after expenses you'll be lucky to make just $2,000 for your effort.
However, like in every other area of "consumer real estate" you can make more money if you make it easier for buyers. How do you make it easy for them? Sell the timeshare with a small down payment and with high interest, but with low payments.
For example, if you pick one up from a desperate seller for $3,000, and it is worth closer to $5,000 or $6,000, you might be able to sell it for $7,000. You just have to make it easy. Ask for $500 down and payments of just $105.65 per month. At 12% interest, that pays the balance off in 8 years.
The buyer gets to tell his friends he has a timeshare unit in the mountains of Colorado. It costs him less per month than a rent-to-own large screen television. Meanwhile, you have invested perhaps $3,500 with closing costs ($1,000 minus the $500 down payment) to get a profit of $3,000, plus 12% interest on the whole $6500.
Those payments, by the way, will total $10,100 with interest over the 8 years, but it is hard to figure your real rate of return on the $3500. You would also have collected interest if the payments were going into the bank that whole time. In any case, you are making at least 16% on the money.
Of course there will be those who don't pay on time and other issues. I wouldn't bother with this strategy unless I was going to do ten units or more to spread the risk and make the returns worth the effort. In any case, if you have you own timeshare that you want to get rid of, you can see how to make some more money in the process.
Source: Free Articles from ArticlesFactory.com
Related Tags: money, make, timeshares, with
Copyright Steve Gillman. For a Free Real Estate Investing Course, and to see a photo of the home we bought for $17,500, visit: http://www.HousesUnderFiftyThousand.com
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- The Secrets to Getting Low Down Payment Car Insurance
Upon purchase of a new car, there is almost always a requirement to buy an auto insurance policy as - The Wisdom Behind Auto Insurance Comparison Quotes
No one in his right mind would not go for a good deal. In fact, everyone is out on their feet and ru - The Benefits of Auto Insurance Comparisons Florida
Insurance can be expensive. This is something everyone knows about especially in the sunny state of - Auto Insurance Florida: The No-Fault Policy
There are different kinds of car insurance offered by a wide range of providers today. Different sta - Finding the Cheapest Auto Insurance Companies
Everyone is asking and searching for the cheapest auto insurance companies available today. Consider - How do You Compare Private Health Insurance Cover in Australia?
Deciding what is the best and most affordable private health insurance cover can be easy if you take - How Payment Protection Insurance Was Mis-Sold
For over six years the issue of Payment Protection Insurance (PPI) and how it was mis-sold to custom - Finding Quotes For Auto Insurance Online
One of the many concerns when you are shopping for auto insurance is being able to get access to quo - How You Can Find the Best Auto Insurance Online
When it comes to renewing your car insurance you are going to quickly discover that there are a numb - Guidelines For Searching For Auto Insurance Online
The internet can be a great source of discounts and values related to auto insurance. However, many
Most viewed articles in this category:
- Trading Forex With Pivot Points
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days mo - Where To Search For Free Grants
Where do you look for free grants? The search must be thorough or it could be an exercise in futilit - The Connection Between High Blood Pressure and Salt
We are a society of Salt Addicts. It cannot be denied. When you look at the things we do and the pla - Tips For Avoiding HYIP Scams
Before knowing about HYIP Scams, refer to the functioning of HYIP or "High Yield Investment Programs - Getting Credit After Bankruptcy
Consumers do not have to live sans credit following a bankruptcy. By following certain steps consume - Tips For Choosing A Credit Card
Are you looking for that perfect credit card? If so, you may be confused about what exactly to look - Cheap Car Insurance For Teens Online
Many elements determine a car insurance policy. Car insurance companies look at the person's age, hi - What Exactly Is Free Grant Money?
You can apply for free grant money from various government agencies. But where exactly does this mon - Small Business Owners Marketing and Customer Service
Marketing can be time-consuming, but it doesn't have to be hugely expensive now, thanks to the Inter - Apply Online For A Credit Card - How To Choose A Card?
The best type of credit card for you will be dependant on how you intend to use the credit card. Are