Hi all--
I thought I saw a thread where someone gave an estimate of fair price per point for a stripped contract, but cannot find it. I am eyeing a contract but no points till 2015.. I might just wait for another one since I would love to plan a trip next year LOL.
Thanks!
Before I start I will say that you will
NEVER get a good value buying a stripped deal because the sellers won't agree to the massively lowered value. You should ignore every contract without all 2013, 2014, and 2015 points. You will see why if you walk through the math below:
Quite easy to calculate.
Contract 1 (standard): no 2012 banked, all current year 2013 pts and all pts going forward
Fair value: XX per point (XX is the general average you see listed for sale on the resale sites).
Contract 2 (semi-stripped): no 2013, all 2014, all 2015
Fair value: XX per point - $11 per point for "lost rental revenue".
Explanation:
You could easily turn contract 1 into contract 2 by renting the 2013 points. If you bought contract 1, then immediately rented the 2013 points you would have a contract with no 2013, all 2014, all 2015 pts. Which is exactly what contract 2 is. If you pay $100 per point for contract 1 and then rent all the 2013 pts for $11 per point you would effectively have paid $89 per point for your contract.
Therefore, the fair value of contract 2 (stripped) HAS to be $11 less per point than contract 1. Using the same logic, a contract with banked 2012 points would be equal to XX + 11 points, because you could rent the 2012 points and have the exact same situation as contract 1 (no 2012, all 2013, all 2014, etc).
Example: If I was looking at Boardwalk which had no points until 2015 I would calculate it this way...
$85: Going rate for contracts with all 2013, 2014, 2015 pts.
-11: missing 2013 points
-11: missing 2014 points
$63: fair value for contract with no points until 2015.
Will someone sell you a stripped Boardwalk for $63? No. So don't waste your time with anything that doesn't have all 2013, 2014, and 2015 points. Stripped contracts are a rip-off to the buyer.