Any owners out there that rent every other year?

[jonw]

I'm wondering if this is a realistic scenario? Are there any owners out there who defray the cost of ownership by alternating between vacationing and renting out every other year?

The only reason I'm thinking along these lines is that I don't think I could swing vacationing every year. If I could rent out the points every other year, then I would only need to come up with the rest of the money needed for a vacation every two years. The difference between MF rates and rental rates would help me pay my MFs...

 

[chalee94]

it would be much less of a headache to just buy 1/2 the pts you need and bank/borrow to go every other year on your pts. renting isn't worth the extra effort IMO.

 

[jonw]

Well, MFs are ~$5.00 a point, and rentals are twice that. Seems you could rent every other year to cover your MF cost completely.

it would be much less of a headache to just buy 1/2 the pts you need and bank/borrow to go every other year on your pts. renting isn't worth the extra effort IMO.

 

[nunzia]

..but it may be hard to rent..I am nervous about trying to rent at all much less every other year.

 

[logan115]

Well, MFs are ~$5.00 a point, and rentals are twice that. Seems you could rent every other year to cover your MF cost completely.

But then you're in a spot where you're essentially buying those extra points just to rent them out. Assuming that you net $5.00 per/pt by receiving $10 for renting them vs your $5 in MFs, your return on that money that you put down to buy the extra points is $5 divided by your purchase price. Depending on where you buy and what you pay it may or may not be a decent return. If you buy SSR @ $70, then it's about a 7.1% return ($5/$70), but clearly as you pay more your return goes down.

Granted, it's nice to have the extra points, but I don't think many would recommend buying extra for the purpose of renting them. In terms of having those other points cover your MFs, in the scenario you're talking about what you're really trying to do is effectively pre-pay your MFs

Realistically, if you buy more than you need you may find yourself booking a 2BR that you would love vs the 1 BR that you need

Good luck either way,

Chris

 

[Sandisw]

I don't think that I would want to have to rely on renting the points. I would do as a PP said, buy 1/2 the points with the plan to go every other year.

If you find that you get to a point where you can go every year, then you can always add on more points.

 

[jonw]

Why would I buy extra points? I'm thinking about buying points for a 1BR at BLT. You don't think I could rent about that each time?

But then you're in a spot where you're essentially buying those extra points just to rent them out. Assuming that you net $5.00 per/pt by receiving $10 for renting them vs your $5 in MFs, your return on that money that you put down to buy the extra points is $5 divided by your purchase price. Depending on where you buy and what you pay it may or may not be a decent return. If you buy SSR @ $70, then it's about a 7.1% return ($5/$70), but clearly as you pay more your return goes down.

Granted, it's nice to have the extra points, but I don't think many would recommend buying extra for the purpose of renting them. In terms of having those other points cover your MFs, in the scenario you're talking about what you're really trying to do is effectively pre-pay your MFs

Realistically, if you buy more than you need you may find yourself booking a 2BR that you would love vs the 1 BR that you need

Good luck either way,

Chris

 

[Deb & Bill]

If you have someone in mind to make reservations for, it wouldn't be too hard. But if you have to look for a renter every other year, it may be harder and more work than you think. Right now, there is a glut of points out there with so many newer members trying to rent out their Developer Points that expire on 10/3/09 and they are going very cheaply.

 

[jonw]

Hmm, I wonder if I could find someone who would be interested renting from me every other year. I imagine if I could find someone reliable like that it would be worth it to me to come up with a nice deal for that person.

If you have someone in mind to make reservations for, it wouldn't be too hard. But if you have to look for a renter every other year, it may be harder and more work than you think. Right now, there is a glut of points out there with so many newer members trying to rent out their Developer Points that expire on 10/3/09 and they are going very cheaply.

 

[JimMIA]

The other consideration is the possibility that DVC might crack down on rentals. After all, if you are renting DVC reservations, you are a direct competitor of Disney itself.

In the last couple of years, they have taken two actions to discourage rentals (restricting transfers and identifying "commercial renters"), and they could take additional steps in the future. I would not purchase any number of points to rent when my ability to rent could be severely curtailed by the stroke of a Disney pen.

I think the suggestions of buying just what you need for every-other-year trips is the most sensible strategy.

 

[Lynne M]

I'm still not getting it. I'm going to throw some made up numbers in here, just for illustrative purposes.

Let's say that for your every-other-year trips, you'll need 100 points. If I understand correctly, you want to buy twice that number of points, so that you can rent out 100 points every other year, which you think will pay for the maintenance fees on all 200 points.

What about your initial buy-in cost for that extra 100 points? That's a lot of money, and you'd have to recoup that, too, for renting to cover your costs. And never mind that your rental income is not guaranteed, and is subject to all the usual market forces.

If you're going to need, for example, 100 points every other year, why not buy 50 points, and bank them in the years you're not traveling? Seems smarter to me to cut your costs and buy the minimum points you need, than to spend thousands of dollars on points you have no intention of using.

 

[nytimez]

Don't buy it without being prepared for the possibility that you'll have to use (and pay for) your points yourself. You might be able to rent, but who knows where the economy will be or what the rentals will be worth on a year-to-year basis.

 

[logan115]

Why would I buy extra points? I'm thinking about buying points for a 1BR at BLT. You don't think I could rent about that each time?

What I was trying to say is you need to take a closer look at the two scenarios, let's assume the 1BR @ BLT is 300 points and BLT costs $100 per point to keep the math easy.

Option 1) Buy 150 pts, bank your 2009 points to give you 300 pts for a trip next year. Repeat this process for the next 50 years Your initial cash outlay is $15K, and annual MFs are $555.

Option 2) Buy 300 pts, use all of them for your next trip, then rent out the 300 pts in the years you're not going to WDW. Your initial cash outlay is $30K, annual MFs are $1,110. Every other year if you rent your points at $11/pt (a bit ambitious but makes the math work better), you will net $7.30/pt ($11 rental less $3.70 MFs) or $2,190 which covers your MFs for the two years.

In Option 2, you are effectively paying an extra $15K upfront to avoid a annual outlay of $555, or to look at it a different way you are making a return on that "investment" of 7.3% ($1095 of income each year / $15K principal) if you break up the 300 pts into 2 contracts - 150 pts that you use, 150 pts that you rent. Personally for a 7.3% return I'd look elsewhere as these are pretty generous assumptions and far from guaranteed. Would take a long time to recoup that $15k.

Hope that helps,

Chris

 

[TSMIII]

Maybe I'm missing something here, but to my mind, if you've got the extra cash to pay for an additional contract, why not invest that and use your returns to pay your MFs on the original contract?

You wouldn't need to rely on finding renters and all of the extra work/risk that involves - and the investment would be far more liquid than a DVC contract in the event you needed the cash for another purpose at some point.

 

[jonw]

Yeah, I think I'm starting to agree with you and logan115.

Thanks guys.

So now instead of looking at ~224 points at BLT, I can look for ~112 and I won't have to worry about renting them out every other year... although it sort of sounds like fun to me....

Maybe I'm missing something here, but to my mind, if you've got the extra cash to pay for an additional contract, why not invest that and use your returns to pay your MFs on the original contract?

You wouldn't need to rely on finding renters and all of the extra work/risk that involves - and the investment would be far more liquid than a DVC contract in the event you needed the cash for another purpose at some point.

 

[logan115]

Yeah, I think I'm starting to agree with you and logan115.

Thanks guys.

So now instead of looking at ~224 points at BLT, I can look for ~112 and I won't have to worry about renting them out every other year... although it sort of sounds like fun to me....

Glad to throw in my .02. Now the next problem - you're probably not going to be able to find many BLT resales right now so it will be hard to get about 112 pts at BLT, if you are already a DVC owner you could add on for that amount (though I'd recommend buying a few more to account for any future changes to the point charts). If you're not, then your options are either buy 160 at BLT, or buy a small resale contract at another resort, then add on at BLT. TONS of great deals to be had going resale these days.

Good luck,

Chris

 

[jonw]

Ugh, I think I knew there was a 160 minimum...but forgot about it. Hmm, booking at BLT at 7 months will probably be nearly impossible for a while right?

Glad to throw in my .02. Now the next problem - you're probably not going to be able to find many BLT resales right now so it will be hard to get about 112 pts at BLT, if you are already a DVC owner you could add on for that amount (though I'd recommend buying a few more to account for any future changes to the point charts). If you're not, then your options are either buy 160 at BLT, or buy a small resale contract at another resort, then add on at BLT. TONS of great deals to be had going resale these days.

Good luck,

Chris

 

[logan115]

Ugh, I think I knew there was a 160 minimum...but forgot about it. Hmm, booking at BLT at 7 months will probably be nearly impossible for a while right?

Impossible to know at this point, and realistically it will take a few years before there's enough history to determine that. I don't think it will be impossible to book BLT at 7 mos most of the time - but the high demand periods such as Christmas will be tough. Also at 7 mos there you'll probably have to be flexible on the view (doubt MK views will be available but who knows !) and possibly even room size.

Personally I just bought an SSR resale (ironically got 160 points there for about what 112 BLT points costs), and I didn't exactly follow the "buy where you want to stay" mantra. Instead I used the "buy where you can get the best deal and wouldn't mind staying if you can't switch at 7 mos." I should note that we've stayed at SSR and liked it, and since we plan on trying all of the different resorts we didn't have any real home resort preference. I mean, we would've like to own at BLT/AKV/BCV, but for us it just made more sense to buy SSR.

Chris

 

[Lost in Neverland]

I completely agree with logan115 about where to purchase your points. We bought resale and it never really mattered where our home resort was. The only things we looked at were the MF and the price per point. We bought 220 points at OKW but more than likely will only use it as a backup resort seeing how we also like to resort hop.

 

[JimMIA]

Hmm, booking at BLT at 7 months will probably be nearly impossible for a while right?

It might be for a short time, but long-term I think it will be bookable as long as you are happy with lake view and don't need to travel during peak times.

BLT is a pretty large resort with more than 300 rooms, so I'd expect it to be bookable once the initial rush to stay in the new place has worn off. I suspect only owners will get MK views or the cheap standard view rooms, but other than that, I expect BLT to be doable at seven months outside of peak time slots.