How to Use Escrow When Renting Out Your Timeshare

For many people, the biggest concern about renting their timeshare is the possibility of being defrauded. Too many horror stories can be found about bounced checks, stolen credit cards and similar schemes used by dishonest renters to steal from innocent timeshare owners. Using an escrow service when you rent out your timeshare can be the perfect way to ensure that you and the renter are both protected.

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People who own timeshares will often rent these timeshares out, a practice that can be very beneficial financially for the owner when handled properly. Owning a timeshare can be expensive given the cost of maintenance and upkeep, so if you are not using yours during a particular period during which you have access to it, you should consider renting it out. This can bring in additional income that can be used to help cover ownership expenses for the property. One obstacle that you might need to overcome when renting out a timeshare, however, is the possibility that your prospective renters could be financially unreliable. Many owners overcome this obstacle by using an escrow service to handle the details of the necessary financial transactions.

Of course, the first step you should take before renting out your timeshare is simply determining whether or not the property allows this kind of arrangement. It is important to review any documents regarding the timeshare rules and regulations in advance; if necessary, contact the management property to ask if timeshare renting is permitted. Although this is rare, some resort management companies do not allow timeshare renting at all; a thorough understanding of the current rules regarding this practice, therefore, is essential. It is also a good idea to educate yourself about any financial penalties you could incur if your renters violate any existing resort rules during their stay.

The second step you should take before renting your timeshare is finding a vacation escrow service that is a good fit for your needs. A good place to start is at your management property office; ask for someone who can refer you to a reputable escrow service. Another option, of course, is simply to search for and compare vacation escrow services online. Many escrow services will give general quote information about how much their service will cost and how much you can expect to pocket from a particular transaction. In exchange, you will no longer have to deal with the responsibility of collecting any money or dealing with any other financial transactions. The escrow service will handle the entire payment process; you simply receive a check in the mail or some other form of deposit if you prefer.

The finally step would be to complete the necessary documentation for the escrow service you choose. Many timeshare escrow services require all parties involved to complete a rental and escrow agreement as well as to select an insurance carrier. It is a common practice for an escrow service to have the renter pay 50 percent of the cost of the rental upfront to help minimize the possibility of fraud.

Completing these steps can help you turn your unused timeshare into a source of supplemental income. Escrow services will help make the entire process much safer and simpler, relieving much of the stress that can come with renting out a property.

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Boris Razmiki

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