Buy a little more than we need and rent the extra?

[DanaHesson]

There will be a time coming in just a few years that we will want a 2br instead of a one. Does it make sense if we can afford it to buy over what we need and rent the extra? I know we can add on later, but then you have closing costs again.

 

[_auroraborealis_]

The challenge with "renting the extra" is how much extra you'll have, and where. Will you have enough to book a long weekend or longer somewhere desirable in the 7-11 month window?

 

[DanaHesson]

Possibly 40-60 points extra at Animal Kingdom. We have not offered on anything yet, we are just trying to decide what makes the most sense for us to purchase.

 

[_auroraborealis_]

That won't be enough to work with most brokers, so you'll likely be doing your own renting via somewhere like the Rent/Trade Board. I'd follow some threads there for a bit so you can see what it's like for people.

 

[BillPA]

If you pay cash, maybe it makes sense. If you finance, no way. In reality, IMHO, if you can't pay cash you really can't afford DVC.

 

[Dean]

There will be a time coming in just a few years that we will want a 2br instead of a one. Does it make sense if we can afford it to buy over what we need and rent the extra? I know we can add on later, but then you have closing costs again.

IMO it never makes sense to buy planning to rent long term but it does make sense to give yourself some flexibility if there are reallocations or to get a larger villa here and there, if one has to go up in season or like in this case, when you know you'll need more later. It also makes sense to avoid the smallest contracts due to the higher per point cost, fairly fixed closing costs and fact that often smaller contracts are more stripped than most. In this situation I'd give yourself at least a 10-20% cushion. An extra 20-30 points yearly in this situation can easily work like 30-40 more per year for several years. And it might be you find a much better contract and price for the slightly larger one as well. I wouldn't go under 150 in this situation, would buy at least a 10% cushion (more if looking at Dream or below or studios) and would consider the overall costs per point. I'd also put an emphasis on UY and a loaded contract even if slightly more but a better overall value. I know many recommend getting multiple smaller contracts but the pp cost for doing so is often significant, I find it rarely reasonable unless one finds a larger contract that's actually made of of smaller ones such that the price and other costs are basically the same as one contract anyway.

 

[zavandor]

Buying bigger to rent points brings some risks (more money tied to DVC, rules for renting can change, another recession could hit the renting market...).
I'd suggest to buy what you need or a bit more like Dean suggests. You can addon later, in the meantime maybe you'll discover you have a different favorite resort so you can buy there. Later on, you can downsize again selling only one of your contracts. It's true that you'll have more expenses down the road, but you also have the flexibility to change your plans as you see fit.

 

[APiratesLifeForMe2]

Are you buying in anticipation of needing the extra points starting in a few years and just renting out the points until that time comes? If so I actually think that's a smart idea and similar to what we did. We weren't planning on going until 2019 but did want to be able to use 2018 banked points for the trip so we planned to start looking in 2016 and buy in 2017 and just rent any 2017 points left. (ended up finding the perfect deal this year) I know most brokers will require 100pt minimum to rent but that can be from banked or borrowed points - you just have to have them available to use. If you have less than that you can rent on the rent/trade board or to friends and family who may be interested.

 

[LAX]

While it's tempting to buy a bigger contract upfront because of its lower per point cost (not to mention saving on other associated costs), the flexibility of owning few smaller contracts (that add up to similar total annual points) can be invaluable down the road, IMHO. Plus, owning a small contract of different resorts offer even more strategic flexibility, depending on the resort(s) interested.

Although I am a fan of renting out points (I have done it recently with surprisingly minimal work and hassle through a rental agency), it's a bit risky to get extra points to rent out annually on a long-term basis. I tend to think of the rental market as a back up option--to dispose of points I can't use on occasions, not a regular basis.

LAX

 

[GrumpyInPhilly]

FWIW, I just listed 79 points with David's and in doing so found out that they no longer have the 95 point minimum to list.

 

[Matty B13]

FWIW, I just listed 79 points with David's and in doing so found out that they no longer have the 95 point minimum to list.

Must be hurting for points, maybe we will see a price increase.

 

[_auroraborealis_]

Must be hurting for points, maybe we will see a price increase.

They are, by most reports.

 

[DanaHesson]

Buying bigger to rent points brings some risks (more money tied to DVC, rules for renting can change, another recession could hit the renting market...).
I'd suggest to buy what you need or a bit more like Dean suggests.

We are thinking 240-300 at AKL. We can get away with a one bedroom now but will want to switch to a two in just a couple more years as our son grows. We will NEVER get a studio, and we prefer savannah view, concierge if we can get it. We almost always stay 9 nights too. I wasn't thinking buy more planning to rent, but wondered if it was a workable plan for extra points till we have to go 2br. 220 is the absolute minimum. I don't foresee us banking or borrowing points.

 

[DanaHesson]

If you pay cash, maybe it makes sense. If you finance, no way. In reality, IMHO, if you can't pay cash you really can't afford DVC.

I agree.

 

[Dean]

We are thinking 240-300 at AKL. We can get away with a one bedroom now but will want to switch to a two in just a couple more years as our son grows. We will NEVER get a studio, and we prefer savannah view, concierge if we can get it. We almost always stay 9 nights too. I wasn't thinking buy more planning to rent, but wondered if it was a workable plan for extra points till we have to go 2br. 220 is the absolute minimum. I don't foresee us banking or borrowing points.

In that situation I'd go with the minimum to do a 2 BR or somewhere in that ballpark. It sounds like you're thinking Dream season or lower so make sure you understand that the seasons and costs could be reallocated and in all likelihood, it would cost you more points if they did, esp if you were looking at Adventure. Another approach would be to buy what works now or a little less, give the system a try and then consider a different home resort so you could vary your options at 11 months out, esp since AKV is generally available in some way other than value or concierge for a 1 BR. I wouldn't go in planning not to bank or borrow though but you do want to keep it to a minimum. If you can get a loaded contract it will play larger or you could rent out the initial extra points to reduce your overall cost.

 

[DanaHesson]

Thank you Dean!

 

[LAX]

They are, by most reports.

I think David's even posts on its website that it has more reservations lined up than they have points for.

LAX

 

[_auroraborealis_]

I think David's even posts on its website that it has more reservations lined up than they have points for.

LAX

Exactly. And I do believe it. The demand for DVC rental outstrips supply of points and the most-desired resorts.

 

[mustinjourney]

Exactly. And I do believe it. The demand for DVC rental outstrips supply of points and the most-desired resorts.

Seems odd then that he wouldn't raise his rates. Lots of demand and little supply. Eco 101.

 

[LAX]

Seems odd then that he wouldn't raise his rates. Lots of demand and little supply. Eco 101.

I think it's more complicated than just simple Econ 101 and it has been discussed in other threads before. Should the rental agencies decide to raise the cost of DVC rentals, it would make them less attractive than a direct reservation with Disney because of its rather unfriendly cancellation policy. If the saving is not significant enough to justify the lack of flexibility, who would want to take the risk and rent through them over Disney. That is not to say what is happening now is not without risk. If enough potential renters get frustrated by not getting their requests fulfilled, it will certainly hurt demand down the road. Perhaps the rental agencies might need to cut their margin by raising the reimbursement to owners to make it more attractive to rent through them instead of on their own. I am guessing the loss in profit per rental can be made up in volume if demands remain strong.

LAX