Deferred Maintenance to Sustainable Management Pt. 2

Rentals Help – But They Don’t Replace Dues

Dues-paying owners remain the lifeblood of a timeshare HOA. Rentals can and should supplement operations by monetizing association-controlled inventory and delinquency weeks, but they are not a cure-all. The rise of OTAs (Online Travel Agencies) and individual vacation rentals reshaped demand; associations must professionalize their own rental programs to compete. That means channel management, yield discipline, accurate photos, and rapid responses are important. If your rental records are thin or inconsistent, your financing prospects narrow.

There is also a governance consideration. An HOA that rents too much for too long can jeopardize nonprofit status. It’s rare, but I have seen associations surprised by tax exposure because rental income outpaced member revenue. Work closely with your tax advisor and keep the primary purpose of the association front and center – serving member use and preserving the asset.

Understanding Today’s Financing Landscape

Specialty lenders exist for associations with credible plans and verifiable revenue streams. Costs are higher than those of traditional banking; in recent cycles, I have seen all-inclusive borrowing costs in the low to mid-teens, depending on risk, plus customary origination fees. That sticker shock is real but it reflects the reality that the lender cannot take a simple mortgage on a single-tenant asset. Expect robust underwriting, including multi-year fee and rental histories, reserve studies, insurance details, governance health, delinquency trends, and collateralization of association and delinquent inventory.

You should never borrow without a repayment plan backed by realistic cash flow. A loan is not a substitute for strategy; it is a tool that funds the work a strategy demands. Boards that step into financing with clear milestones, transparent owner communication, and verified revenue levers tend to complete projects on time and stabilize more quickly.

The Lemonjuice Approach: Strategy First, Capital When Warranted

At Lemonjuice, we are a management company before we are a lender. Our first job is to assess operations, governance, and revenue engines. Many boards reach out at the eleventh hour – after storms, major failures, or when owner patience has worn thin. We can help, but the solutions are fewer and more expensive. When boards bring us in early, we often resolve problems through better planning, right-sizing, and modernization before the issue becomes urgent and costly.

Our Reimagined Resorts program has evolved beyond simple repurposing. In some communities, the answer is right‑tracking—getting back to fundamentals with proper staffing, clear KPIs, and disciplined budgets. Elsewhere, it’s right‑sizing by aligning inventory and usage with real demand. In a minority of cases, repurposing is the prudent course of action. Whatever the track, we start with data, not promises. We scrutinize rental channels and rate strategy. We replace paper tape charts with modern PMS (Property Management System) and reporting. We run competitive RFPs (Request for Proposal) for major scopes. We review governing documents to restore necessary flexibility. And we set sales objectives that reflect today’s market, not a brochure from 1998.

If capital is still necessary, we underwrite like owners because we are fiduciaries to owners. Our underwriting committee examines multi‑year histories and builds conservative cash‑flow models. If we lend, we do so with precise performance controls and collateral structures, because the only responsible loan is the one we can reasonably expect the association to repay. If cheaper capital is available from a third party, we will assist you in pursuing it. The goal is a healthy association, not a loan for its own sake.

Communication: The Difference Between Headwinds and Havoc

Owner conflict is inevitable when fees rise or amenities are disrupted. What turns conflict into crisis is silence. Volunteer directors have jobs and families, and management teams juggle daily fires. However, if members go months without credible updates, informal social media groups rush to fill the vacuum with rumors, half-truths, and incorrect information. I urge every board to schedule standing virtual town halls during significant projects, publish clear FAQs, and document decisions tied to your reserve study and professional advice.

Transparency fosters trust, even when the news is difficult. Owners who understand why a fee increase or special assessment is necessary are far more likely to stay current. Owners kept in the dark vote with their wallets. The fastest way to trigger a delinquency spiral is to delay communications and hope for the best.

Timing and Process: Plan Months, Not Days

Underwriting for association financing is not a next‑day exercise. A thorough review can take between four and eight weeks, depending on the readiness of the documents. If you pause the process for months, the file will need to be refreshed; markets change, and so do your numbers. Time is always of the essence in building projects, but rushing the money is not a strategy. Start early, assemble your records, and assign a board liaison who can respond promptly to diligence requests.

Who’s Calling Us: A Candid Snapshot

We see a mix. Some boards are proactive: they monitor CPI and insurance trends, track aging components, and request assistance two to three years before a significant lift. Those communities often avoid borrowing altogether after tightening operations and re-energizing rental properties. Others are in pain: hurricane-damaged coastal resorts have not fully reopened – mountain properties have been hit by successive heavy winters – inland properties are facing sudden premium spikes or vendor cost inflation. Then, there are well‑run resorts with solid reserves that want a long‑term plan to stay modern and competitive. Each situation requires a different playbook, but all benefit from an early and honest assessment.

What Boards Can Do Now – Without Borrowing a Dime

Start with the governing documents. Confirm the board’s authority to adjust fees, levy assessments, and manage association‑owned inventory. Commission a current reserve study and treat it as your north star. Align budgets with that map, not with last year’s politics. Modernize your PMS and reporting to enable the board to view real-time delinquency, rental, and rate data. Open a communication cadence your members can rely on. Set a calendar of quarterly working sessions so you are never relying on a single annual meeting to address multi-year problems.

The Bottom Line

Legacy timeshare communities can thrive for decades if we respect the math and maintenance. There will always be voices urging restraint on fees and spending. But the building does not listen to opinions; it responds to funding and follow‑through. When boards act early, insist on professional standards, and communicate relentlessly, they preserve owner value and community pride. When they wait for a crisis to dictate the agenda, options narrow, and costs rise. If your resort needs a partner to plan, execute, or, when prudent, finance, reach out before the eleventh hour. You will have more choices—and better ones.

To learn more about Lemonjuice Solution’s services, please contact Jan Barrow at 863.602.8804 or visit LemonjuiceSolutions.com.