Why Not Buy More Points Than You'll Ever Need?

[tk1652]

Admittedly, I'm a newbie but I've read LOTS of good info here on this forum about the DVC. I appreciate everyone's advice, guidance, tips and tricks. I'm contemplating joining but have a question:

I'm trying to decide how many points to purchase. Since points rent for about twice (or more) the annual maintenance fees, why not buy twice as many points as you think you'll need. Seemingly, you could then rent out 1/2 the points each year and have your other points for essentially free each year after the initial purchase.

I'm sure I'm missing something here, but it seems that this would be a good strategy for paying the annual maintenance fees (assuming you get honest buyers when you sell, of course).

What do you guys think?

Thanks!
Rick

 

[Chuck S]

It depends upon how many "extra" points you buy. I would never buy enough points to make 15 or 20 rentals per year, and in fact, Disney may be cracking down on those folks, by defining them as commercial renters. If you buy 100 or 150 extra points for rental, you probably won't have a problem, but who knows what the future will bring in terms of price per point on those rentals...you'd be up a creek if the rental market suddenly takes a nose for any number of reasons...bad economy, terrorism, supply outstrips demand, whatever.

 

[jekjones1558]

A couple of reasons off the top of my head:
•Big investment to buy points initially and that money could be invested elsewhere for possibly better returns.
•There is a hassle factor involved in the point rental process that may not appeal to some folks.
•Disney could use rules in the future to make renting more difficult.
•Maintenance fees may rise faster than the going rate for rentals.

 

[auntsue]

I wish I had bought a few more points when I originally bought. We bought the exact number we needed for seven nights in a preferred view 1 BR BWV (214). We went once or twice, and then realized it would have been great to have enough points for an extra night or two. We've been in borrow mode ever since, even though we have bought more points.

The problem with buying too many points is the maintainance fees really start to add up. Also, DVC seems to be cracking down on rentals, and I guess if they wanted to outlaw it sometime in the future, they might be able to.

 

[crisi]

A few people do. Personally, I have better ways to make money than renting points. Just sticking the $15,000 for twice as many points into a fund with a 6% return would pay for your dues on your contract, and not be any bother.

 

[CarolA]

Ummm.... you are renting out points to cover JUST the maintance cost. So you are spending twice as much initally to cover those costs???? Makes no sense to me. (Figure that points rent at about 2 x that cost)

If you have the spare money to buy twice as many points as you need, find a financial planner and invest it. As others have pointed out, you can probably get a return to more then cover your mainteance fees.

Timeshares (including DVC) are not an investment. IN about 20 to 30 years I expect the value of my OKW points to go to zero.....

 

[dianeschlicht]

Ummm.... you are renting out points to cover JUST the maintance cost. So you are spending twice as much initally to cover those costs???? Makes no sense to me. (Figure that points rent at about 2 x that cost)

If you have the spare money to buy twice as many points as you need, find a financial planner and invest it. As others have pointed out, you can probably get a return to more then cover your mainteance fees.

Timeshares (including DVC) are not an investment. IN about 20 to 30 years I expect the value of my OKW points to go to zero.....

This is excellent advice, and a track we are thinking along the lines of too. The only thing that seems to work as well is to sell the older resort and buy the newer/longer contract a few years down the line so the resale of those points down the road will still be higher.

I do have to agree that if you have enough money to invest in buying twice the number of points you need, there is really going to be NO savings for you in the long run if you consider what that money would get you in a real investment. If you were thinking you would get a loan to buy those extra points, you are already starting out in the hole, and it makes even less sense.

 

[ssonley]

in 20 to 30 years I'll be looking to buy those points for zero - and I'm sure 99.999999% of the people on here will too...

Several years of DVC stays for just the MF sounds pretty good to me

 

[CarolA]

Mine will probably be on the market about them. My plan is that they will be worth very little. (Let's get real with 10 years left I don't care what folks say they won't be worth much and Disney is NOT going to artifically "over price" them when if they just wait a few years they get them anyway) I figure I will be on TUG dumping them, but that's OK I will have gotten my money's worth out of them.....