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How to Start a Timeshare

Timeshares can be a great way to turn a key piece of real estate into a money making opportunity. There are two primary ways that you can start a timeshare business. You can create one from scratch by securing your own real estate and then selling the timeshares to it or you can directly sell timeshares as an agent and earn a commission on every sale that you make.

The benefit of doing all the work yourself is that you get to keep all the profits. On the other hand, working as an agent means you just do the sales work and don’t have to worry about property taxes, scheduling conflicts, and securing capital for additional land. If you would like to know how to start a timeshare, then you’ll want to choose one of the two options listed above. Once you do, the following steps can then be taken to finalize this business opportunity.

1. Secure some capital.

Whether you’re buying outright or you’re selling on commission, there is going to be a need to have cash on hand. You’ll need an office space to meet with potential customers, equipment to process a sale, and access to reliable transportation. If you’re purchasing properties to convert into timeshares or buying them to resell them for profit, you’ll need to have enough cash on hand to cover those expenses as well.

When securing capital, it is important to remember that there are good debts and bad debts. If you’re expecting to have a 10% return on your timeshare business, then if you secure a loan that has a 12% interest rate, you’ll be losing money. Bad debts will exceed your expected return. Don’t agree to financing that won’t lead you to profitability.

2. Get licensed.

Because timeshares are real estate, most jurisdictions are going to require you to have a Realtor’s license in order to conduct business. If you have multiple opportunities in different states, you will need to have a separate license for each state. The same is true internationally as well. Each Realtor’s license will often need to be accompanied by a business license for each state. You may also need other specific licensing depending on the jurisdiction.

3. Get insured.

This is going to happen at the same time you’re being licensed. You’ll need to have some level of insurance covering your actions and your assets in a timeshare business. General liability is a must-have item and if there are assets involved, you’ll need to have policies that can completely cover your losses if a catastrophe were to happen.

4. Begin the marketing process.

The next step in this business opportunity is to find people who want to sell or develop timeshares. You can build your own timeshare properties if there is enough cash in place and land in an inviting location. You don’t need to have warm, sunny beaches to have an exciting timeshare. A timeshare in Vail, CO during the winter months, for example, is successful because of skiing opportunities. Start the contacting process and then develop contracts that can help everyone achieve profitability.

5. Advertise your opportunities.

Whether you’re reselling timeshares to others or you’ve created your own market, you’ll need to advertise the opportunities that you have to specific customer segments. A timeshare in Las Vegas, for example, is going to have a different demographic interested in it than a timeshare on Catalina Island. You’ll need to know your market, know what the market can afford, and then be able to close the deal. People are hesitant to invest into timeshares these days because they’re afraid they won’t get value for their purchase. If you can prove the value, then you’ll be able to create sales.

6. Your job isn’t done after a signature hits the dotted line.

Timeshares also need to have an overseer after the transaction has been completed. The properties that are being used will need to be maintained, regularly inspected, and updated as needed. If your new business isn’t in a position to do this, then hiring an agent to work on your behalf to care for the property will be necessary. Doing this will help to protect the investment you’ve made into the timeshares and continue to have them be attractive to potential investors.

Knowing how to start a timeshare business and keep it profitable can be difficult. As with many other real estate-based opportunities, there can be many headaches that creep up. With careful management, budgeting, and enough sweat equity, this can be a very profitable business venture.

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