Afraid to learn about renting out my points!

Discussion in 'Purchasing DVC' started by tvwalsh, Feb 7, 2004.

  1. tvwalsh

    tvwalsh <a href="http://www.wdwinfo.com/dis-sponsor/" targ

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    I am afraid to learn about renting out my points. Why? Because if I do, I will once again feel like I am paying for my vacation stays. I will be thinking, "If I were not here I would be getting $X (or whatever) for the points. Can I really afford to be here?"

    In this case, ignorance is truly bliss! I really feel now that my stay is free!
     
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  3. y2khardtop

    y2khardtop Mouseketeer

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    I've had a few situations where I had a last minute trip planned, and something came up and I coulnd't go. Another time, had points banked into a time frame that I knew I couldn't use them.

    In these instances, renting out the time actually made me feel like I was being paid to be a member, and since you can recoup a large part of your yearly dues with only about 1/3 of your years points, I certainly never felt like I was paying for my vacations that I did take.

    I agree looking at it as a business would ruin the pleasure, but it is nice to have an option when your plans get changed.
     
  4. mom2rb

    mom2rb DIS Veteran

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    DH and I agreed when we bought that we would only rent if it was to pay for another vacation. We just rented to pay for our 2005 cruise. We covered the cruise and spending money. That way I don't think about money I could be making but of all the places we could be going
     
  5. DukeStreetKing

    DukeStreetKing <font color=darkgreen>Never Say Gobble Again<br><f

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    I am curious about renting points.

    If the going rate for point rentals is $70.00/point, or there abouts, wouldn't one be losing money by renting at a lower rate?
    Assuming that the original purchase price was above $70.00.

    I have 150 points at SSR that I just purchased a few weeks ago. It would seem to me a bad financial decision to rent out my points for less than I paid. I would rather bank them until next year.

    Why would I rent them to pay for a cruise? Wouldn't I just use the points for the cruise and make up any difference with cash?

    Maybe I just don't understand.

    Thanks.
     
  6. Richyams

    Richyams <a href="http://www.wdwinfo.com/dis-sponsor/index.

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    Wow, not even nuthut gets $70 per point.

    $70 per point is about what resales are going for right now. Divide that up over the number of years left and you get less than $2 per point per year. Add in $4 or so dues and you are up to $6, rent your points for $10 and you have a $4 profit.

    I am not sure what you are thinking, but it is not correct, or at least we are not talking about the same thing.
     
  7. Dancind

    Dancind Tinkerbell's Mom

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    I rented some points this year to pay for the DCL 10 day cruise at Christmas. When it was first announced, we decided to go ahead and do it and book the cabin we wanted. Though they recently began allowing members to book this cruise for points, it is a LOT of points, and there are no Category 6 cabins available any more. We got a much better deal by booking early, and we're getting an even better deal renting our points to pay cash for the cruise. I thought it might be a hassle to rent the points, but so far it's been easy, using the Trade/Rent boards on the DIS. I just think of it as another of DVC's wonderful options! Diana
     
  8. CarolMN

    CarolMN DVC Co-Moderator Moderator

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    The purchase price for a DVC contract from Disney is now $89/point (without any incentives). You can buy a resale contract for less than that, but I think you need to pay more than $70/point or Disney will exercise its Right of First Refusal. If you buy SSR, your contract is for 50 years. Contracts for the other resorts expire 1-31-2042. Each year (until expiration) you get a new allotment of points to use to make reservations.

    When people talk about renting points, what they really mean is that they are making a reservation at a DVC resort and renting the time to someone. Since the price of the reservation is usually based on the number of points it costs, they say they are "renting points". The average "going rate" for renting points is $10/point.

    For example, if a week in a studio costs 85 points, the renter would pay the member $850 for that reservation.

    Depending on when and where you cruise (and when you book and how far ahead of time you book), the points required to cruise may be more than you are willing to pay. Many members rent their points because when they do, they actually come out ahead - by using the rental proceeds to pay the cash price for the cruise.

    HTH.
     
  9. Caskbill

    Caskbill <font color="blue">DVC-Operations<br>DVC-Planning< Moderator

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    The initial purchase (either $70, or $89, or whatever you want to claim) is a one time cost. After that only dues are an annual cost.

    Points are also an annual allocation. If you purchased 100 points at $89 each that costs $8900. But you get 100 points each year for 50 years, or a total of 5000 points to use. Not allowing for inflation if dues were $4/point then your total cost would be $28,900 (5000 times $4 plus $8900). If you rented them for $10 each you would receive $50,000 (5000 times $10) Your gross profit would be a little over $20,000 over 50 years, or about $400 dollars per year.

    If you rent points you must pay income tax on the rental income.

    Note: the above numbers are just to make the math simple to understand. Minimum purchase at SSR (the only 50 year resort contract available, is 150 points)
     

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