$10 a point? What an insult!

[wininbid]

So impressive to see how you can "manufacture" a figure that is greater than the $10 you want to see go higher. You said people could have gotten more for their money had they investd it somewhere else. Well those people that bought into DVC, obviously didn't want to invest their money in anything else. And if you are saying that they could have gotten 10% on their money guaranteed for the year you are showing, that is rediculous. If you can get me 10% let me know. Just admit the fact that you are trying to drive the price up to fatten your pockets a little bit more than you already are. I'm glad the points are so low, to discourage people like you from renting points.
And to all of you that don't frequent EBAY to rent your points. Imagine if the rental price goes up to $15 or $20 per point. How many more people like NUTHUT do you think there will be. Let me see, if I can buy $200 points for $60 per point on the after market =$12000. And I can rent those points for $20 each, every year, that is $4000 per year, making it paid off in 3 years, not including the annual fees. Not a bad investment. Just think about what a price increase will do!

 

[Dean]

True most people don't buy DVC as an investment but when valueing you're points for rental, one should at least consider the real cost to them like you would with an investment. Realizing there are many factors like personal usage, inflation of resort prices and the like that are very difficult to predict and factor in; I would have to assign a price of $10 pp but with the recent increase in costs, the higher maint fees and the lost income on the "investment" new owners ($67-72 pp) would need to value their points at a little more (maybe $11 or $12 pp).

True the current market is $10 pp but regardless of nuthut's feelings, there seems to be considerable preasure for that to change though I'd suspect a slow increase initially to $11 then eventually to $12 for all but distressed points.

Dean

 

[Dasha]

Renters are evil because they wish to make money?
Therefore Disney is evil for selling DVC for such a great profit for themselves. Or do you normally pay $676,000 ($13,000 times 52 weeks) for a 1 bedroom condo in Orlando?

So why stop at renters? If Disney would only sell 50% of a resort and only take cash reservations 6 month out, all the reservation problems would be solved.

And if evil Disney took only a reasonable profit and sold points at $20/pt, then everyone could buy and we would eliminate renters.

But renters are being capitalistic, which is the foundation of America. And if you think we going to sit here and listen to you criticize America, well you have another thing coming (perhaps a visit from John Belushi's ghost?)!

And its not even April 1st . . . . .

 

[Bennet]

I think it is funny listening to the self-professed capitalists on these boards complain about market forces and look for non-market interventions.

Some rail against a free market for rental points because they see it as disadvantageous to their use of their points and call for the government (in this case Disney governs DVC) to interfere with private contracting of rentals.

Others see the free market as disadvantageous to their use of their points as rentals. They seek a cartel in rental point prices to shill up the their points auction value.

The nasty thing about markets is they do things that not everyone likes. The question is do you believe in free markets even when you don’t like the result or do you see it as an insult?

Adam Smith or Carl Marx?

 

[PamOKW]

The increased seeking of DVC points on the DIS board is probably largely due to folks hearing about "deals" on the Budget Board. They are looking to get a studio for $80 or less. If they can't get that, they'll book the All-Star. Just because a perceived demand is there doesn't mean they are willing to pay a premium.

 

[bicker]

Indeed. The value is the value regardless of how many people decide not to take advantage of it. The reality is that the price for renting points is set by a meeting of the minds between renter and rentee. Very soon, very few DVC members will be willing to rent for $10 per point, and renters who are getting a windfall now will get less of a windfall then.

Brian Charles Kohn
"in my own words"
Some Imagination, huh? - Mickey Mouse

 

[jennypenny]

There is a certain amount of risk involved when renting points privately from a DVC member. If prices were almost the same, I would think people would spend a little extra to have the security of dealing with Disney directly.

Personally, I find this thread self-serving and distasteful.

I think by promoting the renting of points on such a large scale (which is obvious by the number of listings here and on ebay by certain individuals) you put Pete in awkward position. He might be seen (by Disney) as endorsing activity that is not permitted according to the DVC contracts.

 

[Tinker Bell]

We can argue all we want on what the value SHOULD be. But the bottom line is that the market decides what the value IS.

Some DVC folks are very efficient in ensuring that they maximize their vacation value from their DVC membership - others less so. Some people are very focused on getting as much money as they can out of their DVC membership and others couldn't care less about the money.

In fact I think the reality is that most DVC folks aren't in it for the money and are only renting points as a last resort when vacation plans fall through. I think there will always be a steady supply of people in this situation that are just happy to recoup some of their cost and this will keep the renting price low.

So you can keep talking the price of points up until you're blue in the face, but I don't think it will change anything.


Tinker

 

[JAH]

I do not know who this person is but someone by the name vacation4u has been trying to sell OKW vacations on Ebay fo at least 3 months. I have been monitoring this since nuthut first began the campaign to drive up point rentals.
This vacation4u has listed dozens of auctions and I have yet to see one completed with a reserve price met. True some end with high bids of $600 for a 40 point studio reservation ($15 a point) this doesnot even meet their reserve.
I have checked the completed items and have concluded on Ebay that maybe you could average $525 for a 40 point res ( $13).Then minus the Ebay fees and add the aggravation of dealing with total strangers.
Although renting here is also to total strangers - we are all one DIS family. $10 on the rent/trade board I think is a fair deal.

 

[Dean]

Hi. I've seen several people come up with a price of $4-$5 per point as their cost using your methodology, and the financial analyst in me winces!

You mentioned that you purchased outright for $67/point. Someone who purchased 150 points at that price for cash paid ,050. Then, they have to pay $450-$600 per year for maintenance fees. Lets say you're paying $3/pt. main. fees. You can't just divide your initial cost by 40. That's like saying you paying $134,000 for your house today is equal to paying $2,000/year for 40 years. I wish I could've gotten that deal!

By paying ,000 up front for 150 points, you've given up that money. This is your "opportunity cost". You could have instead invested that money and taken out $775/year for 40 years (assuming 8% return). (Or, if you have debt such as a mortgage or car loan, you could have put the k towards that, saving you a similar amount in interest.)

So, to get 150 points, you've "given up" $775/yr. in investment income (or paid extra interest on debt of about that amount) and paid $450 in maintenance fees. That's $1,225/year. 20 years from now, assuming 2% increases a year, your maintenance fee will be $655. In 2041 it will be $975. On average you'll pay over $675, assuming they only go up by 2%/year.

So, to buy 150 points, you're giving up about $775 in investment income (or paying that much in interest on other debt) every year and on average you're spending $675 in maintenance fees. A grand total of $1,450 per year, on average, for 40 years. That's REAL close to /point.

Ok, ok, enough numbers you're saying.

My point is you are spending about $37,000 of your money (,000 up front, $27,000 in maintenance fees assuming 2% increases in the fees per year). $37,000 for 6,000 points over 40 years. That's over $6 per point on average, and doesn't include the missed investment income on giving up so much so early.

What does all of this have to do with the "right" rental value? Nothing. That is whatever supply and demand are. If you're going to lose 43 points in 2 months because you can't bank them, I'd think getting about what you pay on average for them is a good deal. Heck, getting $5 might seem good to you (as Disney now wants to pay for MB). And a renter might be willing to pay more than if they can use them many months from now and know that they can get the accomodations they want. And the rental value will probably always move in relation to Disney's hotel prices. So I'd be willing to bet big that when Disney is charging $450 to stay in a "studio" size room in 10 years, the rental value will be a lot more than /point.\3

 

[rsinj]

Yes, of course, etc., etc.

For us, our valuation was simply taking the $10,500 (actually less - because we were so bad and took the $10/point from DVC for half our points the first year) spread over 42 years and the annual maintenance. What was our "opportunity cost"? Putting the money into some other investment (which probably would have done terribly over the past year) or maybe a money market at 5% (barely covering inflation after taxes). So in the end, our cost is darn close to $5/point.

However, this thread has really gotten way out of hand. I agree with most others, that the DVC folks putting their points up for rental are in the vast minority. Like most others, if I had points to get rid of, I'd bank them to next year or just take a more expense room the next time.

I don't begrudge those that rent their points, nor those that buy the rental points. What gets me is that people are insulted and take it personally when they see points being rented for less than their perceived cost.

It's a market - just like your house or any other real estate - it goes up in value, it goes down in value. There are sellers and there are buyers. Somewhere they have a meeting of the minds and do their deal. In this case though, I think it's pretty clear that over time the cost/point is going to go up as room rates go up.

 

[jennypenny]

I am not against renting points. I have participated in the rental process more than once. DVC owners should get the most for their money. And some years that might mean renting out their extra points, and other years it might mean renting some for extended vacations.

I am merely disappointed that (1) people seem to be in the "business" of renting points, using DVC as a commercial venture more than a personal vacation ownership, and (2) people use these boards to persue those commercial interests.

I'm not going to skip threads just because I don't like them. I'm all grown up now, I can take it.

 

[sconstantz]

and have been following these posts for awhile...

first, some background. I worked for the construction company that built DVC Hilton Head and my husband worked for the advertising agency engaged by DVC to create their advertising, so we are not strangers to the DVC concept. and have considered purchasing for several years.

We are now partners in our own advertising agency in a different town and have a 3 year old DS. And he wanted to go to Disney World this year. I started my "exhaustive" research. and we decided we would stay at OKW, and check out the experience. Then I stumbled (literally) onto this website and loved it. Then I found the DVC message board and was excited. Finally, I could hear some remarks about the resort and DVC from the owners. Which was great. Then I found the rent/trade board.

I was very intrigued, but it took me awhile to act. You see, it is a very risky proposition. Founded on trust. Basically, I am a trusting person, but on the internet? Well, I met a friend here, and she rented her points to me this year, as she can't make her vacation. So far, so good. And I am planning a vacation for May. But, I'm not sure I would have done it for a higher price. When the cost per point starts to rival what I can pay disney without risk, it no longer is worth it. I am still biting my nails, even with my confirmation ticket. Let's face it. The member can change that reservation in a NY second. And I'm out a lot of money, and a vacation.

So, members can charge whatever they choose. Renters will then have to make a choice if the risk/return is acceptable.

Personally, I think I did a good business deal. The member had her points and didn't bank them, she was going to lose them (please analyze that cost, no vacation and no money), I want to go on vacation, and have the money, and AM WILLING TO TAKE THE RISK. Isn't that what America is about?

Thanks for letting me chime in. I appreciate that the members care so much about their properties, and am looking forward to a great vacation.
(and oh, by the way, I don't know about other renters, but I have never "trashed" any place I have stayed. I usually rent a house at the beach for one to two weeks, and have never left a place any worse than I walked in, and usually better. So don't worry. And we have 3 adults and one child in a 1 bedroom, so we aren't over the limit- don't worry.)

shelly

 

[SueOKW]

I hope you have a great time in May! I think if you found a DVC member on this board renting points, you shouldn't be biting your nails.

Like someone said above, most of us consider ourselves in the DIS family.

Anyway, I just wanted to say I'm glad you are getting a chance to experience a wonderful DVC vacation, and hope to hear all about it upon your return!!
Sue

<img width="200" src="http://www.geocities.com/dmurphydis/cleveland.gif">

 

[PamOKW]

Shelly have a great time and thanks for the insight from the other side.

Sue, I wouldn't be overly confident about the integrity of doing a rental just because it's done on these boards. This site has grown very large and very public. When doing a private business deal here the risk is about the same as it is anywhere else on the Internet.

 

[Bennet]

JeffreyH Welcomed Guest Wrote about "opportunity cost"

Well done Jeffrey!

I have seen other similar number crunching analysis and I have done some myself. All the ones I have seen that pass the muster of finance 101 - the time value of money - back at college come up around $10 per point. Most of the variance is a function of the interest rate used to discount cash flows.

I find little coincidence that the market for rental of points comes in at about the same “real” annual cost of holding points that your and other financial analysis show. Most of the people renting points are not in it as a profit maximizing business they are looking for fair compensation for their unused points. In other words they are looking to break even.

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[Richyams]

That is the problem I have. If most of the people were in it for getting rid of unused points, great. I have no problem at all with that.

Even people who bought more points then they can now currently use and rent out the extras every year. I have no problem at all with that. Even if they are renting out a substantial portion.

I have a problem with using only Sun to Fri. People who are renting to maximize profit by using only Sun-Fri are hurting all of us.

I don't even care if the make use of the 11 month window. I just think that they should be using the points in the same proportion as the rest of us. Sure, you can maximize value by going 10-12 nights with only one weekend, but at least you are using a weekend. The people that are forced to use three or four weekend days in a 8-9 day trip will make up for the lower weekend use.

Unfortuantely, I think that the bed is made. There isn't really anything we can do about it, and Disney has shown that they don't care about mantaining owner value, so they won't do anything about it, I am not even sure they could if they wanted to.

The only existing rule that they may be able to use is declaring a renter. They could certainly monitor EBAY and see that some guests are renters. If the owner didn't declare that guest as a renter, Disney may be able to impose some sort of sanction. I don't think they would go to that trouble or effort.

"From each according to his ability, to each according to his needs", Karl Marx,This has failed every time it has been tried, why do we still have liberals?

 

[Dean]

Rich, I think you hit the nail on the head. The system is set up as it is and was that way when we bought in. I know I use exclusively Sun-Fri for my personal use. Only once in 7 years have I used points for a Friday or Sat night and it was at your beloved VB. Had to be in the area anyway and didn't want to stay in a hotel for just one night.

I also feel that most people that rent fit the demographics you've laid out, I know I do. But at the same time I have 502 points and now 5 other timeshare weeks so no way I can use them all. I suspect there are only a limited few that have bought with the idea of actually renting out their points.

Also remember that overall any rules that are directed at limiting rentals in some way will likely affect the rest of the membership to a far greater degree overall than it will affect the renters. Both legally and contractually, DVC really has little options at this point even if they wanted to "police" this activity.

Lets look at another activity. That of depositing DVC with an independent exchange company. The member would likely reserve the highest demand week that fits their needs and deposit with say SFX. SFX would give them a bonus week and allow the chance to trade for a larger unit than deposited. And before anyone would get upset over this option, it's definitely protected under the FTC. It wouldn't affect weekends vs weekdays but would affect availability at the highest demand weeks.

Dean

 

[sconstantz]

to Sue and Pam. We are definately looking forward to our trip. We ordered a trip planning video from Disney, and every night our son has us play it so we can talk about what we are going to do and see!!! We are going for 8 nights and taking my mother with us for babysitting, etc. I will be happy to share our experiences with everyone.
again, thanks for making me feel welcome.
shelly

 

[WDWMom]

Nuthut,

If you rent to only family, friends and business acquaintance and they know the value of the Disney dollar why do you care what other people rent their points for? Charge what you want and leave everyone else alone. DH and I rent points once to family and charged them $1200 for 7 nights at OKW in March- 218 points. That's only $5.50/pt. We could not use them and they helped us pay for an add-on of 100 pts. Do I look back and think I got a bad deal. No way!! The points would have been forfeited (sp) and we helped family out.

So, please leave other people's business alone. If you want to rent for more, go ahead, but stop whining about it

1976 off site
1982 Fort Wilderness
1985 off site
1994 Dixie Landings
1995 Dixie Landings
1996 Dixie Landing
1996 Wilderness Homes
1997 Caribean Beach
1998 OKW/BWV
1998 OKW
1999 OKW
2000 OKW 2x
2001 OKW