Buying DVC vs Renting points

[davidl81]

Just checked one of the big rental brokers and they are charging $26 per point for a CCV studio reservation in June. Can't imagine what they would charge for the same room in December. Wow!

That price may change the math a little lol

 

[Brian Noble]

That price may change the math a little lol

I think the (near) future of rentals at the brokers will break from the longstanding tradition of price-per-point and instead move to price-per-room. DVC is extremely efficient for studio rentals, and I think there is substantial headroom on DVC rental rates for studios. A weekday night in June at CCV would cost $524 all-in, rack rate from Disney. That room costs only 16 or 17 points (depending on first half vs. second half.) If it is 17 points those points have a "rack rate value" of $30.80; at 16 it is $32.75. If this one is the first half of the month, that $26 reservation is still about a 20% discount off of rack.

This doesn't work out nearly so well for 1BRs (which happen to be our preferred unit size these days).

We may also be in a bit of a silly season for DVC rentals, given the nature (and, often, absence) of WDW resort discounts to the GP.

 

[DVChris]

That price may change the math a little lol

And June is within 7 months. Any guesses on what they would charge for the same room in December? $28 per point? $30?

 

[DonMacGregor]

I think it's a bit disingenuous to still use the $16-$17 number when discussing the economy of renting versus buying. From what I can tell, the base is more like $22 per point now. Could the savvy board member find points for less? Sure, but as a real-world metric for comparing rental to buying, I think you need to use numbers that the average consumer looking to rent points on a reputable rental site would encounter.

 

[RoseGold]

Both approaches include some risk. I'm skeptical of the idea that WDW / DVC is entering a death spiral.

Disney doesn't have to enter a death spiral to impact DVC. It just has to hike up park tickets enough. There is a price point at which people like us who go all the time won't go, and a big part of that is tickets. And Disney gets more money from that family that saved up and did a rare trip and wants to buy all the things. They care more about that than me bringing my sandwich from my BLT kitchen.

All of the recent movement has been to increased price, full freight tickets and hard ticket events. I can tell you my DVC plan wouldn't work if I didn't manage to squeak in my APs. The skyrocketing ticket prices go hand in hand with skyrocketing DVC prices, until the price gets so high that DVC stops selling. RIV has shown there is a point where the price tag is just too high.

I plan to hold probably 5-ish more years. I think my plan holds as long as Disney doesn't go crazy pinching pennies, but I'm honestly very concerned if APs don't come back in a few months. Sure, I got mine. But I don't know how well DVC can fare against skyrocketing tickets. If these were the last APs, then I am going to be really thinking about what to do with my DVC.

 

[DarthDadMan]

I think everyone has covered the main points here. I, personally, bought after renting twice. There's about a thousand reasons you can use to talk yourself into or out of owning, really. I bought because I love the deluxe resorts... but I can rent and stay deluxe just as easily. I knew I wanted to create a tradition of taking my family at least ever other year... but again.. I could just rent. I'm a huge spreadsheet guy. I work in data, so I wanted to see the numbers play out. Owning saves me money in the long run (break even is between 8-13 years depending on if I rent out unused points or not), but not enough to really justify a big upfront purchase when the future is as unknown as it's ever been.

What has really sold me on owning, is owning a product that provides this quality experience at a mostly fixed cost (minus dues) in a world where that experience continues to get exponentially more expensive by the hour it feels like. The resale market is also healthy, and Disney protects it's value, so if my family and I change our minds down the road, I feel confident in being able to get some value back out of it if we sell it. That can always change though.

 

[Vulnox]

We bought DVC after pricing our rental and/or cash rate stays for this Feb and November. Just two trips, either way, added up to about 1/5th of the cost of owning at DVC. If we had done that and then fallen in love with the DVC life, we would be starting from square one. Since we know that even if the kids don't always love it, my wife and I have fun going with friends of ours who got us back into Disney, it seemed likely we would easily return enough times just in the first 10 years to be ahead of just renting, even with dues.

Hanging onto old values is pointless in a universe where inflation exists and even at the intro price of $51/pt back in 1991, that is $101 today. That's certainly less than the pre-incentive price of current selling resorts, but not as far off as some will have you believe when they talk about how they bought at $100/pt in 2005 and can't imagine buying at current prices. $100/pt in 2005 would be $142/pt right now. It's just not as big of a gap as it's often made out to be over the life of a contract, and you can find resale contracts for less than $142.

What all that means though, is even $200/pt now could be $400/pt in another 30 years. And if it's $400/pt in 30 years then the rental will probably double also, nearing the $40/pt or so range. Or maybe it won't, who knows. But the idea that DVC prices have grown at some insane rate is only really true if you ignore inflation. It's certainly still more than it was, not dismissing it by any stretch. But it will be even more than that later on, and people will still be paying, just like they pay now for park tickets that have more than doubled and everything else. So if you intend to go often enough over the next 10, 20, or 30+ years, there are situations where you lose, like if the resale market crashes and burns or... Disney does I guess... but if instead the trend of inflation that has existed for as long as money has been a thing continues and so does Disney, you will almost certainly come out ahead through DVC.

 

[tjkraz]

Disney doesn't have to enter a death spiral to impact DVC. It just has to hike up park tickets enough. There is a price point at which people like us who go all the time won't go, and a big part of that is tickets.

For the last 30 years, there has been a constant stream of individuals deciding that DVC is not the right fit for them due to rising prices, declining services, changing vacation tastes, etc. This is nothing new. Those people sell and others take their place.

*IF* rising prices have a sustained negative impact on park attendance, it's very easy for Disney to unveil a ticket discount or go a longer span between price increases. Today's decisions are not set in stone for eternity.

RIV has shown there is a point where the price tag is just too high.

Yet DVC hasn't resorted to slashing prices. Unless I'm mistaken, you've been predicting a VGF price that's 30-40% higher than Riviera.

When you're selling a commodity that's relatively scarce, there's something to be said for maximizing the return on each unit. Within reason, of course. If it takes 6 years to sell Riviera instead of 3...but those additional years are spent renting rooms to cash guests for a profit...seems like a respectable business model to me.

We can only speculate about what conversations are happening behind DVC's closed doors. But when demand for APs is so high that guests are outraged at their absence, after-hours parties are selling out at double previous prices and a handful of attractions are routinely selling out their individual lighting lane entitlements at up to $15 each, it's difficult to view WDW as being on the ropes. There are plenty of people still buying the product.

 

[DarthDadMan]

I think it's a bit disingenuous to still use the $16-$17 number when discussing the economy of renting versus buying. From what I can tell, the base is more like $22 per point now. Could the savvy board member find points for less? Sure, but as a real-world metric for comparing rental to buying, I think you need to use numbers that the average consumer looking to rent points on a reputable rental site would encounter.

So, I was just thinking about this the other day when working on my DVC ownership spreadsheet. Attempting to calculate cost several years down the road, including inflation in the math, but I wasn't considering point rental cost. All things being even, if one is to rent out a given amount of points, should it not be priced in accordance with average due increase percentage?

 

[grahf1234]

I'm not sure where some are seeing those higher rental rates, but from my last 3 experiences which included this past Christmas and now an upcoming July trip that I just booked a few days ago it's a $19-$20 from both devcrentalstore and David's dvcrequest, price doesn't seem to change much even when going 11 months out into this upcoming December.

I've been really struggling with this renting vs. buying question myself though. I keep thinking about how much it's been costing us to rent vs buying, but I just can't make the buying numbers look great.

We're a family of 5 and used to book annual trips at mainly Caribbean beach the last few times before discovering dvc rentals. Been only renting boardwalk studios ever since. They fulfill what I'm looking for which is mainly proximity to Hollywood studios and Epcot. Not sure how long I can keep doing studios, but they seem adequate so far with my 3 little ones. Those studios cost me about ~$5,400 (~280 points) in rent for a Summer and Christmas trips ~10 days long each. If I were to compare this to buying, the dues alone on 280 points would be at least ~$2,000 depending on the home resort. Would also be pretty hard to land those boardwalk studios since I would probably buy something that doesn't expire in 2042, so would have to settle for a less efficient (points per night) room, which would then require more points if I were to keep my stay lengths the same.

I don't know, I really want to buy into dvc but I can't see a better path to saving money compared to renting when it comes to those cheap studios. Actually I'm sure I would just end up sinking even more money into future vacations if I were to find a cheaper rate, just add more days

 

[Vulnox]

For the last 30 years, there has been a constant stream of individuals deciding that DVC is not the right fit for them due to rising prices, declining services, changing vacation tastes, etc. This is nothing new. Those people sell and others take their place.

*IF* rising prices have a sustained negative impact on park attendance, it's very easy for Disney to unveil a ticket discount or go a longer span between price increases. Today's decisions are not set in stone for eternity.



Yet DVC hasn't resorted to slashing prices. Unless I'm mistaken, you've been predicting a VGF price that's 30-40% higher than Riviera.

When you're selling a commodity that's relatively scarce, there's something to be said for maximizing the return on each unit. Within reason, of course. If it takes 6 years to sell Riviera instead of 3...but those additional years are spent renting rooms to cash guests for a profit...seems like a respectable business model to me.

We can only speculate about what conversations are happening behind DVC's closed doors. But when demand for APs is so high that guests are outraged at their absence, after-hours parties are selling out at double previous prices and a handful of attractions are routinely selling out their individual lighting lane entitlements at up to $15 each, it's difficult to view WDW as being on the ropes. There are plenty of people still buying the product.

Yeah it doesn't entirely track that RIV is showing that there is a point where the price tag is too high when all the evaluations of the sales of RIV/AUL/other resorts you can buy have shown to be somewhat flat in general, during a pandemic. RIV actually launched about two months before everything shut down. That it has sold as well as it has is likely why Disney feels comfortable giving it price increases along with other resorts that are also seeing increases. Park tickets are also much higher, yet they are seeing capacity crowds. But buying into DVC is tougher than going to the park because if you understand it at all, you know you have limits on your time for using your points, so a lot of buyers (ourselves included, we bought in Late Feb 2020, then cancelled before the deadline in March when everyone shut down), are holding off to see the direction of the pandemic before getting into it.

We only felt comfortable buying again now, almost two years later, because of vaccination and the signs that even Omicron is showing itself to be a bit milder. I can't imagine we are alone on a more "wait and see" approach to buying DVC over this pandemic, so ascribing sales numbers to pricing and not the global pandemic seems like picking the less likely of two options. Not like RIV was that big of a jump from CCV, which started at $176/pt. If you asked me what is more likely, that the jump from $176 intro to $185 (or whatever RIV was at earliest intro price, I think it was $181-185) caused slow sales at RIV, or a global pandemic that impacted nearly everything, I think I would go with pandemic.

 

[davidl81]

So, I was just thinking about this the other day when working on my DVC ownership spreadsheet. Attempting to calculate cost several years down the road, including inflation in the math, but I wasn't considering point rental cost. All things being even, if one is to rent out a given amount of points, should it not be priced in accordance with average due increase percentage?

I think it is very fair to show rental rates going up 4-5% per year. That seems to be the historical average.

 

[davidl81]

I've been really struggling with this renting vs. buying question myself though. I keep thinking about how much it's been costing us to rent vs buying, but I just can't make the buying numbers look great.

We're a family of 5 and used to book annual trips at mainly Caribbean beach the last few times before discovering dvc rentals. Been only renting boardwalk studios ever since. They fulfill what I'm looking for which is mainly proximity to Hollywood studios and Epcot. Not sure how long I can keep doing studios, but they seem adequate so far with my 3 little ones. Those studios cost me about ~$5,400 (~280 points) in rent for a Summer and Christmas trips ~10 days long each. If I were to compare this to buying, the dues alone on 280 points would be at least ~$2,000 depending on the home resort. Would also be pretty hard to land those boardwalk studios since I would probably buy something that doesn't expire in 2042, so would have to settle for a less efficient (points per night) room, which would then require more points if I were to keep my stay lengths the same.

I don't know, I really want to buy into dvc but I can't see a better path to saving money compared to renting when it comes to those cheap studios. Actually I'm sure I would just end up sinking even more money into future vacations if I were to find a cheaper rate, just add more days

Math wise you are basically leaving $3000 off the table every year buy renting instead of buying. So let's take a resale Boardwalk contract in this example at $150pp would cost a total of $42,000, basically after 14 years its break even and the last 6 years of the contract are "free". Conversely you could invest that 42k and generate about $3300 a year with it , pay the other $2100 a year out of pocket and after 14 years you still have your 42k (your out of pocket would go up every year though as rental rates increase).
Buying 2042 resorts can pencil out as a savings, but honestly the math is harder and the savings is not as clear. SSR and later is a better buy, but in your case the odds of getting BWV rooms at 7 months are slim.

 

[Vulnox]

I'm not sure where some are seeing those higher rental rates, but from my last 3 experiences which included this past Christmas and now an upcoming July trip that I just booked a few days ago it's a $19-$20 from both devcrentalstore and David's dvcrequest, price doesn't seem to change much even when going 11 months out into this upcoming December.

I've been really struggling with this renting vs. buying question myself though. I keep thinking about how much it's been costing us to rent vs buying, but I just can't make the buying numbers look great.

We're a family of 5 and used to book annual trips at mainly Caribbean beach the last few times before discovering dvc rentals. Been only renting boardwalk studios ever since. They fulfill what I'm looking for which is mainly proximity to Hollywood studios and Epcot. Not sure how long I can keep doing studios, but they seem adequate so far with my 3 little ones. Those studios cost me about ~$5,400 (~280 points) in rent for a Summer and Christmas trips ~10 days long each. If I were to compare this to buying, the dues alone on 280 points would be at least ~$2,000 depending on the home resort. Would also be pretty hard to land those boardwalk studios since I would probably buy something that doesn't expire in 2042, so would have to settle for a less efficient (points per night) room, which would then require more points if I were to keep my stay lengths the same.

I don't know, I really want to buy into dvc but I can't see a better path to saving money compared to renting when it comes to those cheap studios. Actually I'm sure I would just end up sinking even more money into future vacations if I were to find a cheaper rate, just add more days

Yeah you make some great points. I think it comes down to future needs when it comes to DVC on buying vs renting, and we just don't have the time machine to know what that looks like. You need a lot of points though, clearly. Even with dues increases though, it's possible we will see the cost for rental increase at a decent rate as well. If renting is $6000 in ten years for the same trip but dues are $2200, then the gap in cost is going to keep growing. Assuming you finance, you will have that paid off in ten years (or less) leaving you with just the $2200 in dues, or, still paying $6000+ every year, year after year, renting. That's why they generally indicate DVC won't pay you back immediately, but in 5-10 years depending on frequency of trips, you will at least hit a break even.

If you don't see ten+ years of trips in your future, then it's tough. If you like going without the kids, then probably the best move is to buy 150 points direct and get the blue card, then try to find another 150 on resale, give yourself some wiggle room. In ten years if the kids don't go as much but you do, sell the 150 point resale contract, possibly get your up front cost back assuming resale prices climb in ten years, and keep your 150 direct for you.

Or buy a couple same UY point packages all resale if you don't care about blue card and future resort trading.

But that does bring up the part of the math to keep in mind. If you spend $40k + ($2000x10 = $20k) to buy and pay dues for the next ten years at DVC, then sell the contract at ten years for, lets say $30k. Then it cost you $30k to have ten years of stays with DVC. Let's also say that renting remained static, so $5400x10 is $54k.

Unless the resale market craters or resale just isn't possible, you have the option to recoup a good portion of your cost in ten years. And I think those numbers are pretty low ball for what you might sell the contract.

Bay Lake Tower (BLT) launched in 2012 @ $155/pt. Today on resale it is $150/pt for the absolute cheapest contract I see on resale, and it is only that cheap because it's a 400 pt monster and those are hard to move. More common rates are $160-180. So you would get all your money back if you bought BLT in January 2012 and sold today, excluding dues. I can't imagine it would have been cheaper to rent comparable points at BLT over the past ten years.

Anyway, I can't guarantee the resale market in another ten years, nobody can. But odds are good it will be around, or you can rent out unused points to cover dues, or something. If all of that is gone then we have bigger problems anyway.

 

[JETSDAD]

I'm not sure where some are seeing those higher rental rates, but from my last 3 experiences which included this past Christmas and now an upcoming July trip that I just booked a few days ago it's a $19-$20 from both devcrentalstore and David's dvcrequest, price doesn't seem to change much even when going 11 months out into this upcoming December.

I've been really struggling with this renting vs. buying question myself though. I keep thinking about how much it's been costing us to rent vs buying, but I just can't make the buying numbers look great.

We're a family of 5 and used to book annual trips at mainly Caribbean beach the last few times before discovering dvc rentals. Been only renting boardwalk studios ever since. They fulfill what I'm looking for which is mainly proximity to Hollywood studios and Epcot. Not sure how long I can keep doing studios, but they seem adequate so far with my 3 little ones. Those studios cost me about ~$5,400 (~280 points) in rent for a Summer and Christmas trips ~10 days long each. If I were to compare this to buying, the dues alone on 280 points would be at least ~$2,000 depending on the home resort. Would also be pretty hard to land those boardwalk studios since I would probably buy something that doesn't expire in 2042, so would have to settle for a less efficient (points per night) room, which would then require more points if I were to keep my stay lengths the same.

I don't know, I really want to buy into dvc but I can't see a better path to saving money compared to renting when it comes to those cheap studios. Actually I'm sure I would just end up sinking even more money into future vacations if I were to find a cheaper rate, just add more days

Dvcrentalstore doesn't show their $/Pt but just gives a total. BWV, BCV, etc are $24/pt.

 

[DonMacGregor]

Dvcrentalstore doesn't show their $/Pt but just gives a total. BWV, BCV, etc are $24/pt.

Yeah, some do come out to $20/point, I think. Regardless, it ain't $17-$18.

 

[JETSDAD]

Yeah, but if you pick a date you can see what they are asking for the rental, then compare it to the number of points needed on your dashboard, and it always (?) comes out to $20/point.

That's what I posted. $2568/107=$24/PT

 

[DVChris]

Just checked one of the big rental brokers and they are charging $26 per point for a CCV studio reservation in June. Can't imagine what they would charge for the same room in December. Wow!

Here’s the CCV studio I mentioned earlier. It’s $26 per point for a June reservation (within 7 months) through DVC Rental Store.

Edit - Forgot to mention that it’s 121 points.

 

[DonMacGregor]

That's what I posted. $2568/107=$24/PT

I did 7/8 to 7/11 at VGF, 2BDR lake view and they want $4,560. That same villa shows 228 points, or $20 per point.



Not arguing of course, still supports that even the "cheap" rental sites don't go below $20 PPT.

 

[DonMacGregor]

Bottom line: unless you're lucky, or are looking to stay at VBR or HHI, using any number less than $20 PPT as a metric for comparing renting versus buying is flawed.