Time shares, rich folk style. Why?

Image by Mdrewe via Flickr

Hey, rich people: I’m offering a sale on New York bridges this month, buy one, get the second half price. Oh, you can only drive on them on alternate Tuesdays and Thursdays, but you’ll get a share of the tolls I charge.

That’s the reaction I had to a New York Times story yesterday about new condos that have gone up with the following rules: You can buy your unit at a nice high price, but you can only use it one or two months out of the year, the rest of the time it must be available for rental. The developer gets 50% of the rent, you get the other 50%).

it’s happening with beachfront condos in California, where the state allegedly wants to insure that the public beaches don’t become rich-folk enclaves. Trump built a condo in New York with the same rules, although he’ll let owners use it 120 days a year (but only a month at a stretch). His reason had to do with local zoning, which allowed a hotel but not a residence, and this set-up mollified the zoners. The Times piece sites half a dozen other places where similar setups exist.

Okay, I understand the motivation of the regulators. But why on earth is anyone willing to buy something that comes with these rules? These are not cheap places, they sell in the millions (or did, before the market tanked — a lot of buyers are walking away from their contracts)

Sure, if you need the money, you rent out a room, or your vacation house, or whatever. But if you can afford $1.2 million for a studio (Trump’s price), and multiples of that for a couple of bedrooms, why would you want to let strangers sleep in your bed, scratch up your furniture, all the good stuff that comes with renting places out? And why would you let sellers tell you when you can and cannot come yourself?

And if it’s an investment property, why not buy in a condo with no restrictions whatsoever? You get to rent it out as much as you want anyway, but you reserve the right to use it yourself, even to move into it permanently. And when you rent it out, you get to keep the money, not just 50% of it.

I’m often outraged by the things that rich people do. But sometimes I’m just befuddled. This is certainly one of those times.