Why not just rent points?

[dreamprfct]

My question probably shows my ignorance so here goes:
Last week we almost bought into DVC--last day of cruise etc--however we were the last meeting of the night and the computers went down--so we didnt get to and basically rethought everything over night and thought we should research some more--
which brings me to all of you!

We were looking at Aulani-
here are my questions:
1) why not just rent points (without buying) whenever I need them?
2) what are the restrictions with buying resale if we choose to?

thanks!!

 

[DizBub]

My question probably shows my ignorance so here goes:
Last week we almost bought into DVC--last day of cruise etc--however we were the last meeting of the night and the computers went down--so we didnt get to and basically rethought everything over night and thought we should research some more--
which brings me to all of you!

We were looking at Aulani-
here are my questions:
1) why not just rent points (without buying) whenever I need them?
2) what are the restrictions with buying resale if we choose to?

thanks!!

1) You can rent points but you won't have control over your reservation. The lack of control bothers some people.

2) The restrictions with buying resale: Concierge Collection, Disney Collection, Adventurer Collection and Disney Cruise Line.

 

[okw2012]

My question probably shows my ignorance so here goes:
Last week we almost bought into DVC--last day of cruise etc--however we were the last meeting of the night and the computers went down--so we didnt get to and basically rethought everything over night and thought we should research some more--
which brings me to all of you!

We were looking at Aulani-
here are my questions:
1) why not just rent points (without buying) whenever I need them?
2) what are the restrictions with buying resale if we choose to?

thanks!!

I see it differently (if you have the cash to buy-in): why not rent the points you don't use? I have twice the points I need, and rent them at around twice the MF, which leaves me with the points I need for free.

If you need to finance, then renting is the better option IMO.

Plus I don't have to worry about my reservation being changed without my consent or not being able to get a refund if I choose to cancel the reservation.

Even taking into account the opportunity loss from not having invested the same amount in a mutual fund (given this last few years's low ROI on blue chips) and the inevitable loss of value of my long-term DVC lease, it is a better deal than renting. That could change in the future if renting prices don't go up as fast as MF.

Also that is only true because I bought at a discount on the resale market.

There is however a persisting rumour that much stricter rules will apply to resale buyers (starting next year). That could be announced Thursday at the DVC owners annual meeting.

 

[Deb & Bill]

DVC isn't overly fond of "renting points". But it is allowed in the Public Offering Statement. They have already limited the number of accounts a person could be an associate member on. That is how some brokers used to do their business. They may get a brainstorm at how to limit renting in the future.

But if you plan to only do Disney once in a while, there really isn't any point in buying DVC. If you plan to do it yearly, DVC makes more sense. But DVC makes sense when you use your points for DVC. Ultimately a member is only entitled to book their home resort, but DVC probably wouldn't limit members to only their home resort. But recently, that idea was thrown out there that they could limit the other DVC resorts members could book. Currently resold contracts purchased after March 21, 2011 (or 2012 - senior moment here) cannot be used except for DVC resorts and RCI exchanges. No non-DVC Disney resorts, no Disney cruises and no Adventures by Disney (none of which really are a good use of DVC points - they require way too many).

So you decide what is the least risk for you.

 

[312BillB]

There is however a persisting rumour that much stricter rules will apply to resale buyers (starting next year). That could be announced Thursday at the DVC owners annual meeting.

I've been seeing a lot of this comment lately. I'm not a current DVC owner, but a seller accepted my offer this morning that I'm quite excited about so I'm a potential owner, pending ROFR.

My question is, when this meeting occurs and if a decision is made to restrict to your home resort, how soon do these changes typically become effective (i.e., weeks, months)? Do I have some time or would this occur within the next few weeks that would put my purchase in jeopardy of falling under this clause?

 

[AllieV]

I rented points for about, oh, ten years or so. The person I rented from lives in my same state (so we could track each down if we really had to, but ultimately we've never met in person), the rate was a few bucks cheaper than going rate on the boards, I didn't have to pay 100% up front (which allowed for airline ticket purchase simultaneous with room booking without breaking the bank).

I watched the rates drop for many years until it got to the point where it made some sense to buy. I initially wanted to buy 25 or 50 just to have my own contract and control my own rez and check on availability. The plan was to buy/transfer the rest of the points from her -- making her end much easier too.

But I bought 100 points on a super cheap resale contract. I did the math on when it would break even vs renting and came up with 4.8 years. Most of the contracts wouldn't break even for 10 years. They're getting cheaper every day, though.

 

[bumbershoot]

For me, I got too nervous to think of someone else being in charge of my reservation.

I also didn't want to bet that there would always be points available for where and when I wanted to travel, from a person I felt was trustworthy.

 

[Lynne M]

I don't think there's a one-size-fits-all answer for this one, but I can tell you why I chose to buy instead of renting. I knew I was going to Orlando at least once a year. Aside from WDW, I have close friends in the Orlando area, and the DVC resorts make a nice, convenient home base for my visits. The purchase price and MFs were affordable for me, and I couldn't see any reason to rent when that meant I'd have to find a trustworthy owner to work with every time I wanted to pop down and do WDW or visit my friends. It just made sense to have my own membership.

There are some situations where I've advised people to rent instead of buy:

1. If they're not sure they'll want to stay at a DVC resort every year, or every other year. They don't know how long their kids will want to go, and Mom and Dad wouldn't keep going to WDW/DL/etc once the kids get tired of it. If you rent, there's no long-term commitment.

2. If their financial situation is unstable, and there's a significant risk that they couldn't afford the cost of a DVC vacation on a regular basis - transportation, tickets, food, etc. They'd still be paying those maintenance fees (and possibly loan payments), even if they couldn't afford to take the trips. If you rent, you're not on the hook for those payments if you choose not to take a DVC vacation that year.

3. If they're very young and just starting out, and don't want to be saddled with a long-term financial commitment before they've bought the house and the car and paid off school loans.

 

[Dean]

My question probably shows my ignorance so here goes:
Last week we almost bought into DVC--last day of cruise etc--however we were the last meeting of the night and the computers went down--so we didnt get to and basically rethought everything over night and thought we should research some more--
which brings me to all of you!

We were looking at Aulani-
here are my questions:
1) why not just rent points (without buying) whenever I need them?
2) what are the restrictions with buying resale if we choose to?

thanks!!

renting can be a good choice and you can take advantage of much of the benefits of DVC and part of the potential savings. Likely the best benefit for ongoing usage is the ability to bypass the home resort restrictions that most owners are faced with. For some it's the best choice if they can't afford the ongoing risk or cost or don't go at least every 2 years for an extended period of time. However, it does ad risk and potentially some cost.

 

[chalee94]

My question is, when this meeting occurs and if a decision is made to restrict to your home resort, how soon do these changes typically become effective (i.e., weeks, months)? Do I have some time or would this occur within the next few weeks that would put my purchase in jeopardy of falling under this clause?

1) things change all the time as a timeshare owner, for both resale and direct purchasers. this is very important to remember...

2) historically, all timeshare salesmen (and disney's salespeople are catching on) love to promote the idea that changes are coming that will make resales useless so you really need to pay extra to buy direct (and it helps that such a strategy means more commissions for them).

3) the one time disney made a distinction between resales and direct, they gave several months notice and grandfathered prior resale purchases to have the same options as direct contracts. IF they make more changes, they might do the same thing again or they might not - one data point doesn't create a trend line.

 

[Brian Noble]

1) why not just rent points (without buying) whenever I need them?

From a strictly dollars-and-cents perspective, and under most reasonable assumptions about cost-of-capital, renting is probably a little less expensive, all told, than buying from the developer, but it's probably a litle more expensive, all told, than buying on the secondary market.

If you don't imagine going at least every other year, or you don't think you'll keep going to Disney for ten years or longer, then renting is probably the way to go. If you think you'll be going more frequently and longer into the future, then a resale contract will probably save you some in the end. Renting has the benefit of the ultimate in flexibility---you just pay cash for whatever you want, without regard to use years, home resorts, etc. Owning has the benefit of convenience---you don't need to find someone to rent from, you just book what you want, subject to the points you have, etc.

Remember, too, that this is only the *lodging* part of your vacation. You still have to pay for everything else at regular market rates, minus a DVC discount here or there if you own. For example, I had secured an RCI exchange to a 2BR in the outskirts of Paris for this upcoming summer---and it was a good deal. Work commitments loomed and I had to change it, which means canceling the exchange and renting a flat through the airbnb marketplace instead. That will raise my lodging cost by about $800-$1000, but compared to what were spending on flights etc., that's not really a big deal.

 

[crisi]

The biggest issue with renting points is risk and bother - you are dealing with a private individual and sometimes people do get scammed - not often. More often, the owner and you don't understand or communicate well - which can create stress and friction. The biggest benefit to renting points is flexibility - you can skip years, you can book eleven months out anywhere to get what you want (most likely - even at eleven months a few categories at a few times of year can get tight). You don't have your capital tied up.

The biggest benefit to ownership is control - you control your points and your reservations....no worries about showing up to discover you were scammed, and if you need to move your vacation around, you understand your own points and their structure. It may not be possible, but you at least know. The biggest downside is tying up a lot of money into something that lacks flexibility. Which is fine if 1) you have a lot of money and 2) you don't need the flexibility because you love Disney and will be happy going there year after year.

 

[Dean]

The biggest issue with renting points is risk and bother - you are dealing with a private individual and sometimes people do get scammed - not often. More often, the owner and you don't understand or communicate well - which can create stress and friction. The biggest benefit to renting points is flexibility - you can skip years, you can book eleven months out anywhere to get what you want (most likely - even at eleven months a few categories at a few times of year can get tight). You don't have your capital tied up.

The biggest benefit to ownership is control - you control your points and your reservations....no worries about showing up to discover you were scammed, and if you need to move your vacation around, you understand your own points and their structure. It may not be possible, but you at least know. The biggest downside is tying up a lot of money into something that lacks flexibility. Which is fine if 1) you have a lot of money and 2) you don't need the flexibility because you love Disney and will be happy going there year after year.

There are ways to easily minimize risk.

 

[lilpooh108]

My question probably shows my ignorance so here goes:
Last week we almost bought into DVC--last day of cruise etc--however we were the last meeting of the night and the computers went down--so we didnt get to and basically rethought everything over night and thought we should research some more--
which brings me to all of you!

We were looking at Aulani-
here are my questions:
1) why not just rent points (without buying) whenever I need them?
2) what are the restrictions with buying resale if we choose to?

thanks!!

Not sure if you know, but Aulani dues are now higher since they calculated them incorrectly to begin with. So some Aulani owners pay less dues than others. If I knew this as a DVC newbie, this alone would bother me enough not to buy into Aulani.

I am not sure whether you can buy an Aulani contract which started with subsidized dues as a resale (I'm sure someone else can chime in).

In looking at Aulani availability, it seems that if you don't "need" peak season (spring break, June/July, Christmas, Golden Week) and you're flexible on the type of accommodation, it doesn't seem impossible to get into. I mention this b/c it seems like Aulani dues are quite high for being a newer resort and if you don't have a need to own there, you might look into resale for other contracts.

But of course, there's always the possibility that Disney can limit access to Aulani for resale contracts at a later time. YMMV.

 

[Dean]

But of course, there's always the possibility that Disney can limit access to Aulani for resale contracts at a later time. YMMV.

I don't believe this to be a risk or even legally possible.

 

[joeyrose]

i like owning stuff if i can....house, cars, movies/tv shows that i like (dvd), dvc, etc. they're mine and i can do pretty much what i want with them most of the time.

 

[lilpooh108]

i like owning stuff if i can....house, cars, movies/tv shows that i like (dvd), dvc, etc. They're mine and i can do pretty much what i want with them most of the time.

lol

 

[dreamprfct]

i like owning stuff if i can....house, cars, movies/tv shows that i like (dvd), dvc, etc. they're mine and i can do pretty much what i want with them most of the time.

yeah me too! I'm just thinking through this one through---I just hope we will still want to go to Disney once the kids are older

 

[okw2012]

yeah me too! I'm just thinking through this one through---I just hope we will still want to go to Disney once the kids are older

But grandkids WILL want to go. Our younger is 7 and our older 17 (and there's one in the middle), so I figure there might not be much of a gap between when I last go with my teenage son and when I start taking my grandkids! I know, I have high hopes...

 

[DizBub]

yeah me too! I'm just thinking through this one through---I just hope we will still want to go to Disney once the kids are older

DH and I go all the time, just the 2 of us. We get to go at our own pace and do what WE want to do. We never get tired of it. On the drive home in October DH asked when we were going back.