Fair Market Value On Rental

[cyseitz Senior Member Find all posts View Profile Close cyseitz]

My husband and I bought 205,000 points in July at Kingsgate. We already owned 307,000 points at Bonnet Creek. Now we have more points than we can possibly use before the year ends. Well, we thought we'd book some units and rent them out (help to cover the price we paid for the points).

I would like to know what you think a fair market price is for a two bedroom unit at Smoky Mountains (the older resort) for Christmas week. This is what I booked. I have two rentals of the same for the same week.

Thanks in advance! Any advice would be appreciated.

[GoofyHobbie Member Find all posts View Profile Close GoofyHobbie]

Fair Market Value on Rental

The ole saying is the Market Value is whatever a renter is willing to pay.

But, you don't know the answer so here you are.

Recommend that you figure out your cost per thousand points for your underlying Maintenance Fee and the cost per thousand points for the Fairshare Plus (FSP) Fee that you have to pay. The two numbers together represent the cost to you for the 2009 points that you used to snag the reservation through Wyndham.

Example: Kingsgate's 2009 underlying maintenance fee should be $4.39.

Given that 512K is the grand total of all the Wyndham Points in your portifolio and if you are not a participant in the Wyndham Fairshare Plus Partners Program then your FSP cost per thousand should be: $0.51. (If you are a participant in the Wyndham Fairshare Plus Partners Program then your cost per thousand for the FSP is $0.53.

$4.39 x $0.51 =s $4.90 per thousand points

If $4.90 per thousand represents your cost then multipy that number by the number of thousand points that you gave to Wyndahm to get the property at Smokey Mountains.

The result represents your out-of-pocket cost to reserve the Unit at Smokey Mountains.

That cost should be your rental FLOOR when renting the week if you want to break even.

Then look around at Redweek.com, RCI extra Vacations, TUG, and other places to see what a similar week is going for at Smokey Mountains.

Once you have those numbers take the average number being asked at those sites and let that be your CEILING.

If you can live with it consider offering the week for a rental fee that falls somewhere between the FLOOR and the CEILING.

Hope the above analysis helps. Let me know how it works for you.

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

Friday to Friday day, Staturday to Staturday, Sunday to Sunday?

Not a heavy landlord and not renting enough myself. JMHO, the MF cost is your base of determining what you should get, it probably will not help you to determine the Fair Market value. Since you plan to use it to make money, you should try to find the units/time slot that can fetch most money, and then most easy to rent out.

Based on Wyndham's inventory, you should be O.K. You will not expect to see a lot of Mega Renter use discount plus upgrade to attract renter(s) at that time there. Otherwise, that will be your low bound.

I will use 2 methods to check the price

1st, Wyndham's rental unit www.extraholidays.com do have it for rent. You need to go there, do a search on resort, it will show you a graph, you can pick that resort and check it.

You will not be able to compete with it. It linked with all the rental sites (like tripadvior, Expedia, hotwire ...), and it is very flexible, people can rent from Tuesday to Tuesday for example, or just 1 night like 12/23/09. But you don't charge renter 11% tax. So, you may want to consider reduce 1 night or so. That will be your mark.

Their price is 199 per night. So based on that, you are looking at $1200 per week.

2nd, before the rental point stop, it is at a market rate about $6 per 1K, since your cover 2 BD and 1 holiday, I will try to get $7 per 1K as min. SM 2BD is about 166k, so I will assume 1162 is the other mark.

Now, where you plan to advertise, you look at there (like redweek, myresortnetwork, craiglist), than look at the overall area's rent rate, people look at that side may not care too much if it is Wyndham or Bluegreen or a regular non-brand timeshare, that is where you are compete with, try to put your price on avg there (I know tugger will suggest you put low ball, IMHO, since you are trying to do it as business, you should not, someone that can get cheap inventory may try to cut throat, someone that desperate need money will put anything, but that should not be your goal).

Ad at as many sites as possible, tugger has one sticky discuss what are the sites used by tuggers. But try to ad on site where you can compete with.

I would think, if you need to get the unit using ARP, it probably will be able to fetch most, in your case, BC at X'Mas (you can look at Disney site to see when is their most crowded time), Williamsburg at July 4th. Than converted resorts that need VIP RARP reservation. Than all the resorts that has time slot cover the holiday, middle beach resort cover the summer, FL cover Winter.

Some resorts will be able to get more, some will not. BC probably will get more than Williamsburg and will be easier to find renter. ANd probably will get more people plan ahead than Williamsburg.

Although we are no longer in the same economic free drop like at the beginning of the year, we still are in very bad economic situation, and people are still very caution when spending, hopefully, you will get a taker at the price you prefer.

Jya-Ning