Add-On Points (for Profit?)

[keishashadow]

Tossing around doing an add-on thru DVC. Could do min 25-50 for cash, would have to finance anything over (not my 1st choice, trying to reduce debt).

The thought has occured to me to purchase more points than we currently anticipate using and rent/transfer the rest to cover the annual fees (and hopefully make a small profit). Although I'm somewhat leery after the thread re DVC owners being responsible for renters charging @ WDW.

Since my investment prowess is of the buy high, sell low variety; can anyone advise as to the feasibility of this, probably, half-baked plan? I need to formulate my sales pitch to my DH and would like to seem somewhat convincing.

Of course, if we couldn't get rid of the points, we'd just have to use them ourselves.

 

[OnMedic]

Here is my take, I am new too... so this may also be in left feild!

Own 300 pts.
Use 180 pts. year (Average)
Rent 120 pts. year @ $10/pt. (Average)

Gross $1,200 for points and pay mtnc. fee for 300 pts.

Does this make sense?

Cheers!

 

[VTNuke]

how easy is it to rent the points?

I use to sell a timeshare back in the 90's and whenever someone starts to think they'll be able to rent the points out I tell them research the rental market for their points/weeks.

Although the theory is great I wouldn't buy the points thinking they'll pay for themselves in renting.

On a similar topic, I also instruct people to look at the resale value of the timeshare you plan to purchase. DVC actually holds very well compared to other timeshares out there.

Note: I do not own at DVC but plan to in the near future.

 

[CarolA]

And don't forget the taxes. If you start renting points you need to pay the IRS for the revenue minus any expenses. (I guess annual dues are expenses?)

That said, I can think of easier ways. I found it way too time consuming the one time I tried it!

 

[OnMedic]

Good point about the taxes... I guess my approach is to offset the MF, but maybe you can only write off the MF associated with the points you rent.... ie. $4/pt, leaving $6 profit?

 

[JimMIA]

Well, you have to figure your points are costing you roughly $6 per point (roughly $2 purchase price + $4 dues). So if you bought 25 points to rent, got $10 per point for them, had absolutely no problems with the rental, you could make roughly $100 profit. In 49 years, you could amass almost $5,000!

I don't see renting points as a very lucrative venture. I'd much rather just have what I need.

 

[keishashadow]

There are eBay sellers who seem to always be offering Studios Sun thru Thurs @ their home resort (or any other available), during the 3 lowest seasons for approximately $800 and up. Wonder if they own the points they're renting or are "brokering" the points via rentals/transfers. Seen a few listings that appear to be speculating on holiday rentals (a bit bottom-feederish). I'd think that there has to be a provision somewhere in the DVC docs that prohibit this.

Never thought about the tax angle. Guess I'll mull this one around for awhile before I decide. Thanks for your input.

 

[NJOYURLIFE]

You would only be able to deduct the costs associated with the points being rented, not all of your costs, when calculating your profit for income taxes.