Buying DVC vs Renting points

[Floridian From Afar]

Hi. I’ve been recently researching DVC for my family of 4. We have 2 young boys, 6 & 3. We lived in the Orlando area for a few years and absolutely loved it, so I can easily see a trip to Florida yearly. I’m trying to figure out if buying into DVC is worth it vs renting points. I guess my question is “What have been the biggest issues with renting DVC points that people have experienced?”

 

[Sandisw]

We never rented because we didn’t like having no control of the reservation. The owner owns it until check in since it’s a private transaction.

We also preferred to go cash where we knew it had a much more generous cancellation timeframe. Many DVC rentals are non refundable.

So, owning was the only way for us.

 

[smmora]

I am in the process of buying my first 2 50pt contracts ... when I did the math after approx 12 visits owning will be cheaper than renting ... my resorts have 30+ years ... I also wish I had done it sooner

 

[Nabas]

IMO, the biggest problem with renting is that most DVC rentals are non-refundable. Several third-party rental brokers offer insurance but that adds to the overall cost.

 

[davidl81]

It’s almost like a home, you can rent and break even plus or minus, but you don’t own anything. Historically with DVC you can buy in, own for 10 years and take tons of vacations, then sell and at worse get your buy in money back. Of course this will eventually change with the 2042 resorts as they get closer to expiration.

 

[RoseGold]

Renting would have been better mathematically, and all that money would have done better in the market. But renting couldn’t have pieced together what I wanted, stalking with a night here and a night there.

It depends on how far ahead you can book, or how flexible you are with where you stay.

 

[disneyfan123]

We just bought into DVC this past summer; always rented before but the rising cost of renting points and availability of cash on hand to afford the initial buy-in made it a reasonable decision to own. Now we have the freedom to book when/where we want, and our yearly dues are about 1/2 of what we would be paying for a rental. So it's working out for us. I would recommend buying, assuming you can afford the purchase price.

 

[chrispgross]

We rented a 2 bedroom at BLT for a week before buying resale a year later. I wish I had put the money into my resale contract instead. It would have taken a big chunk out of my resale contract. We may not have stayed at BLT, but would have still been at WDW.

 

[LYSE]

Biggest (rare) issue is getting scammed.

Other issues are that dvc is not very flexible and you tend to loose even more of that when renting.

Lastly much like renting a house, buying more or less locks in your cost (estimated..maintenance will always change) while renting is subject to market conditions... Overall owning is cheaper most of the time.

 

[RoseGold]

Overall owning is cheaper most of the time.

I don't agree with this math after the current resale pricing jump. Rental pricing has not caught up. Add in even mediocre market returns, and renting will be significantly cheaper, even if rental pricing can catch back up.

Renting does have major drawbacks, like risk and control and flexibility and availability for what you want.

 

[Brian Noble]

If you are planning to go every year, and will be doing that for ten years or so, owning is probably both simpler and cheaper. Renting works better for either a shorter time horizon or less frequent visits.

 

[gisele2]

I bought resale in 2020 at a great price and I will save about 30% of the renting costs. So if you can buy without borrowing money, and plan to go every or every other year I think it is fine. Will use my points for the first time in 2022 and had pleasure planning everything.

 

[LYSE]

I don't agree with this math after the current resale pricing jump. Rental pricing has not caught up. Add in even mediocre market returns, and renting will be significantly cheaper, even if rental pricing can catch back up.

Renting does have major drawbacks, like risk and control and flexibility and availability for what you want.

I just added on direct because of resale bot being lucrative enough at this time, even direct my price per point per year is cheaper than renting, infact I immediately reduced my cost by taking the banked points it came with and renting them out (at a profit of course)

Opportunity cost is an assumption I don't get Into, so my comparison is simply on a per point cost comparison (with maintenance)

 

[dvc lover 1970]

If you go yearly then I would buy a small resale contract to see how it works out. If you need more points transfer in points from another member

 

[UofMGuy423]

I rented for 15 years and finally bought at Riviera. Wish I’d bought years ago.

 

[davidl81]

I don't agree with this math after the current resale pricing jump. Rental pricing has not caught up. Add in even mediocre market returns, and renting will be significantly cheaper, even if rental pricing can catch back up.

Renting does have major drawbacks, like risk and control and flexibility and availability for what you want.

There are only a few very specific ways that renting would come out cheaper than owning. They all mostly involve buying BCV at a pretty high price due to it only having 20 years left on its contract. I am not sure what math you are using, but here is an example.
SSR at $130/pt. It has 34 years left on its contract.
Rental at $17 Dues at $8 so cost delta is $9. That puts your $130 resale contract break even at 13.5 years. At that point you have 20 years left on the contract. Of course you are also owing an asset (at this point it’s fairly safe to safe DVC contracts are an asset with 20+ years left on them). So if you own for 5 years you can sell and likely only be out your annual fees of $8/point saving that $9/pt versus rental.

 

[RoseGold]

There are only a few very specific ways that renting would come out cheaper than owning.

Sure, if you plan on putting 25-30K under a mattress.

DVC contracts are not appreciating assets. They are time limited and decaying. It is a mathematical certainty that they will go down. It is a question of when, not if. IMO, their historic rate of increase is not sustainable. It seems to hold better in the longer contracts, but this isn't a projection I am comfortable making.

I bought with a short-term horizon. Frankly, this was a bet on the market which I lost badly. If I had bought SP500 and rented I would be ahead. But what I wanted to do would not have been possible renting, and my contracts have gone up. It would have been an even worse scenario if the market had performed at this level and DVC went down. This was definitely possible with the kind of decisions Disney is making lately.

 

[davidl81]

Sure, if you plan on putting 25-30K under a mattress.

DVC contracts are not appreciating assets. They are time limited and decaying. It is a mathematical certainty that they will go down. It is a question of when, not if. IMO, their historic rate of increase is not sustainable. It seems to hold better in the longer contracts, but this isn't a projection I am comfortable making.

I bought with a short-term horizon. Frankly, this was a bet on the market which I lost badly. If I had bought SP500 and rented I would be ahead. But what I wanted to do would not have been possible renting, and my contracts have gone up. It would have been an even worse scenario if the market had performed at this level and DVC went down. This was definitely possible with the kind of decisions Disney is making lately.

So you will assume the market will go up (which is historically accurate), but you will not assume any appreciation in DVC contracts (even longer term ones) although historically this has held true for the past 20 years. Also are you factoring the 3-5% per year increases in rental rates? 10 years ago $10/pp was the going rate for point rentals, now it's $17-18.

 

[RoseGold]

Right, rentals are 17-18$. There are point categories that are scraping that amount to buy. Even if the market is zero, this seems like it isn't worth the risk, hassle, commitment, upfront investment, and closing costs, mathematically.

I bought a lot, but I can't make a mathematical argument for buying in general against renting points right now, except one that is completely speculative. It has to rest on other factors, which there are many.

https://www.dvcresalemarket.com/blog/best-economical-dvc-resorts-to-purchase-fall-2021/

 

[kanerf]

Just remember that if you own DVC and will not be going for a while it is extremely easy to rent those points out and in most cases you can use the rental fees to cover your DVC costs for that year.