Timeshares and IRAs

Samantha · #1 (**permalink**) March 4th, 2009, 01:02 AM

I just read that there is such a thing as a self determined investment IRA. One can choose what they invest in for their IRA. A timeshare that was only used as a rental could be considered an investment. Has anyone else heard about that? The difference between the rent received and the maintenance fees would be your return. And when you retire you will have timeshares to use as you please.
If only I had timeshares now, instead of stocks! Does anyone see anything wrong with this idea (aside from the fact I didn't explain it very well)?

TAI_Staff · #2 (**permalink**) March 4th, 2009, 10:01 AM

Quote:

Originally Posted by Samantha

I just read that there is such a thing as a self determined investment IRA. One can choose what they invest in for their IRA. A timeshare that was only used as a rental could be considered an investment. Has anyone else heard about that? The difference between the rent received and the maintenance fees would be your return. And when you retire you will have timeshares to use as you please.
If only I had timeshares now, instead of stocks! Does anyone see anything wrong with this idea (aside from the fact I didn't explain it very well)?

There has been many questions about this and similarly related issues on this timeshare forum. Heres a link to previous discussions:

http://timeshareadventures.com/vacat...searchid=12484

I would recommend choosing a popular timeshare vacation destination, a top-notch resort and, of course buying resale timeshare, if this is an avenue you are seriously considering. This combined with a reasonable asking price for the rental of the timeshare will increase the likelihood of timely, regular rentals.

Samantha · #3 (**permalink**) March 4th, 2009, 10:56 AM

Thanks for your timely response. I did review the recommended posts, but I didn't find any reference to IRAs. This question is less about taxes and more about whether timeshares are a better investment than purchasing stocks at this time. And I am curious to know if any one is actually doing this with their investments. If this were a good idea, then this would be the time to scoop up some good deals on timeshares that are in popular places and have good rental potential.
I've never had an IRA, so I'm not sure what you can and cannot do.
Looking for other people's experiences and wondering if anyone sees a flaw in this idea.

TAI_Staff · #4 (**permalink**) March 4th, 2009, 11:59 AM

Not sure if this is the article you're referring to Timeshare is a Better Investment than Stock for IRA?, but it is quite interesting. Generally speaking and as cited in the article

Quote:

Fractional and timeshare is not generally known as an ‘investment real estate product’.

The points made in this article, however, do point toward a certain degree of investment potential. It does make the assumption that the resale buy of 6 timeshare weeks will be regularly rented-out at a certain dollar amount, but I guess speculation is the basis of any type of investment anyway. This is why I recommended the popular destination / timeshare resort and fair price to be regularly successful in this type of endeavor.

Great article, BTW, and very interesting comparison/contrast with timeshare versus stock investments in todays economy. I would be interested in hearing other peoples point-of-view and perhaps a financial expert's(which I am not

) analysis of this article.

If I discover any additional information I'll be sure to post it, Samantha and I welcome and encourage you to do the Same!