Setting a Rental Rate

We're new to renting out timeshare weeks.Regarding setting a rental rate..... I decided to call the resort and ask them what was their cost of a 7 night stay in a certain sized unit. Then I placed my price at the same level. Does that make sense? Am I under or over charging by using this system? Your thoughts, please.

You usually have to rent for 20-50% less than what the resort charges but if you own at a special high demand time where there is limited availability through the resort you may get closer to what the resort charges. For off season you may even have to charge less than half of what the resort charges. Why- the resort usually has fairly liberal cancellation policy's. They may charge only 1 night;s rent or $50 if you cancel before x date. Timeshare owners generally can't afford to allow renters to back out at all let alone a week or less from check in. For most, renting from the resort is considered the "safer" option. If I am going to charge you $200 a night or you could pay the resort the same $200 most will choose to pay the resort directly because you don't know me and you are relying that someone you don't know isn't going to scam you or cancel the reservation after getting the money. Trust goes both ways and the owner has to trust that the renter isn't going to trash the place beyond the hold the resort takes and then goes after the owner for the difference or that the renter isn't going to stay or even no show and then dispute the charges.

Another thing to consider is the resort doesn't necessarily care if the unit is rented. They may be working on a 30%+ commision for the owner and if it doesn't rent the money doesn't come out of the management's pockets. It is the individual owner or in the case of HOA controlled units, all the owners will have to pay (in the form of MF for non performing units) if the unit doesn't rent.

Generally you need to look for other comparable owner rentals when setting your price.