Added on our 3rd resort...need some advice..

[aandjw]

OK - so as a California Native, I could not pass up the opportunity to own here at Disneyland. Pulled the trigger last night at the event for 160....

So we now have the following points:

150 BWV (paid off years ago)
120 SSR (same)
160 GCV (financed for now at 10.9% - 10 years)

We love BWV and find SSR just OK - so my thought is that we either sell the SSR points or rent them out.

That's where I need some advice. I am leaning towards the rent scenario based on the following:

1. Steady income for many years
2. I can run the transaction through my business - so it has tax benefits (deduction)
3. No issue with payments - I am set up to take credit cards through my business (Visa/MC/Amex/Discover).
4. Extra points to use in a year that we want to do something "special" - take the sister and family etc.

If I rent out the 120 at $10 a point, I will net about $650 after credit card fees and MF per year if I get all the points rented. So about $13K after 20 years. If we sell them at about $65 a point we'll end up with $7500ish.

Are my calculations correct or am I missing something HUGE?

 

[CarolAnnC]

1. Steady income for many years
2. I can run the transaction through my business - so it has tax benefits (deduction)
3. No issue with payments - I am set up to take credit cards through my business (Visa/MC/Amex/Discover).
4. Extra points to use in a year that we want to do something "special" - take the sister and family etc.

Are my calculations correct or am I missing something HUGE?

I would not consider renting a steady income for years. Many folks are having difficulty renting out their points in these economic hard times.

If you run this as a business, you run the risk of DVC closing it down. Renting for profit/as a business is not allowed. Plus, you will need to claim it as income on your taxes as well.

Personally, I would sell instead.

 

[msteddom]

That seems like an awful lot of work for a few hundred dollars a year.

Melissa

 

[aandjw]

If you run this as a business, you run the risk of DVC closing it down. Renting for profit/as a business is not allowed. Plus, you will need to claim it as income on your taxes as well.

The goal would be to rent it at a loss (tax-wise).....

 

[icydog]

You would have to assert that renting points is a business- and then- you might be able to deduct the loss you will take when you sell your points. That does not hold true for renting your points.

Plus, if you rent your points out as a business, whether secretly or openly, you run the risk of Disney closing you down. It is expressly forbidden, as written in your contracts, to rent DVC points as a business venture.

Further, renting points out is NOT that easy. It will take time and effort, and for a few measly dollars (because you will be taking a loss at $10 a point) I don't think it is worth it.

Sell the SSR contract and use that money to help pay down your new California Contract. That would be the best use of your money..

 

[Cmbar]

Sell the SSR contract and use that money to help pay down your new California Contract. That would be the best use of your money..

I agree with this. I think that since you are having to finance the add on VGC, I would sell SSR and put it down on the VGC. If you need extra points for family trips, rent them.

I also agree that Disney can shut you down for this. I think it is great to rent out your points to family and friends, but when you turn it into a business, this is dangerous territory. Don't get me wrong, looks like there are plenty of people on the DIS that have stacks of contracts and then just rent their points. However, I suppose it is possible that Disney will shut down these types of boards that allow the renting of points. I don't know if they will or if they can, but it is possible since its stated that you cant rent for business purposes.


I also would not plan on being able to rent all the points exactly. You may have many who want to rent 80 or 120, and then you will have 40 lefts.... you get the point. It may not be as easy as you think!

Good luck. Sounds like you have great properties and I hope you enjoy your new purchase!

 

[Cmbar]

The goal would be to rent it at a loss (tax-wise).....

I don't understand how you will rent it as a loss?? Did you purchase the points through your business? If so then they would be an assest and you could write off the loss (if any) of selling the SSR contract.

How would your write off the "rental".

 

[aandjw]

How would your write off the "rental".

Well...my business involves travel so it would be easy to make it work - but in the end you all have made some pretty good points as to why to sell it instead....

Thanks for all the advice - it is appreciated!