considering buying DVC - risks to renting out Points?

[Chi35364]

Hi all, we are talking with Disney for a purchase of Grand Floridian Villas. The offer is $207/point for 150-points. I had some questions hoping to get help from the community.

1st question - is this negotiable? any success? What is typical historic pricing in past 5yrs for GFV direct?

2nd question, i see us not always using our points every year - especially after 5-7yrs . I could either sell, or I see there is options to rent out points. How does this work exactly? Is the stay still tied to the DVC member, meaning if there are room incidentals, or costs, damages, who has to pay? Is liability shifted to the person renting the points, not DVC holder?

3rd question - if i buy 150 points, does it make sense to break it up into 2 75 contracts? also is Dec use yr good or bad option? How does one decide what is best use yr option to choose from?

4th question - Our family travels 1 to 2 times a year . We always stay Deluxe so when I run the numbers, this looks to be a significant savings vs. paying WDW directly for a room that cost $700+night. What is best way to figure out a breakeven for this? Do you assume a minimum lost value of points, since there is a resale market. I know there is the 1k/yr dues, but how do you calculate out the cost for points, considering they hold their value and can be resold? My assumption is resale value is 160/point, so I technically am paying ~$50/point, If I amortize that over let' say 5yrs, that's $1500/yr + dues?

anything else I should be thinking about that I could be missing?

 

[Sandisw]

DVD does not negotiate over whatever incentives they have at the time. The only thing they will do is let you spread your payments out over 90 days if you want…assuming you are not financing. They also offer 6 months now interest on the Disney Visa for direct purchases.

If you are a first time buyer, they will not let you buy two 75 point contracts. It must be 150.

In terms of renting, the reservation always stays on the owners membership and ultimately, you are responsible for your guests..which is what a renter is considered to be.

Things have changed over the years in terms of charges and I think they have things in place that limit an owner having issues with a renter charging and not paying ,l..but damage to the room? Possibly the owner would be responsible for getting the renter to cover the cost and see their account locked until they do. But, honestly, I think the chances are pretty slim.

You want to choose a UY that has your trips fall within the first 8 months so you can still bank points or have time to reschedule if something happens.

So, with a Dec UY, it’s great for travel from December through August. It’s not a a good one if you travel in the fall.

Good luck!

 

[Chi35364]

I do have an email into the DVC sales agent to discuss letting others use my points to book rooms. My biggest concern is if I rent my points out, can the DVC owner be held liable for the rez holder. Seems risky considering the dvc point rental sites how does one protect from that risk? I maybe over analyzing this concern.

 

[Sandisw]

I do have an email into the DVC sales agent to discuss letting others use my points to book rooms. My biggest concern is if I rent my points out, can the DVC owner be held liable for the rez holder. Seems risky considering the dvc point rental sites how does one protect from that risk?

The contract is clear, Owners are responsible for the action of your guests or renters. As I said, there are very few incidents where owners have had to deal with it,

But, there is always a risk to the owner if you rent a reservation to some one else. For brokers, they simply act as a go between. Now, it’s possible that they offer some level of support for owners, but I don’t know. That would be a question for them.

Years ago, there used to be an issue with renters leaving a balance. DVC would freeze an account until the owner got the renter to pay. But, since Disney now does things differently with the hold, etc. it’s not been an issue any more.

So, always a chance something goes wrong…but most will tell you, it’s a small one.

 

[J-Dog]

DVD does not negotiate over whatever incentives they have at the time. The only thing they will do is let you spread your payments out over 90 days if you want…assuming you are not financing. They also offer 6 months now interest on the Disney Visa for direct purchases.

If you are a first time buyer, they will not let you buy two 75 point contracts. It must be 150.

In terms of renting, the reservation always stays on the owners membership and ultimately, you are responsible for your guests..which is what a renter is considered to be.

Things have changed over the years in terms of charges and I think they have things in place that limit an owner having issues with a renter charging and not paying ,l..but damage to the room? Possibly the owner would be responsible for getting the renter to cover the cost and see their account locked until they do. But, honestly, I think the chances are pretty slim.

You want to choose a UY that has your trips fall within the first 8 months so you can still bank points or have time to reschedule if something happens.

So, with a Dec UY, it’s great for travel from December through August. It’s t a good one if you travel in the fall.

Good luck!

As a relatively new DVC owner, I thought that a Dec UY was bad for the fall, as Sept, Oct and Nov are in the 4-month blackout period. Maybe I'm understanding incorrectly? Thanks.

 

[Jimmy Geppetto]

As a relatively new DVC owner, I thought that a Dec UY was bad for the fall, as Sept, Oct and Nov are in the 4-month blackout period. Maybe I'm understanding incorrectly? Thanks.

The banking deadline for a DEC UY is July 31st so August Sept October and November would be past the banking deadline meaning if you typically book vacations in those months, if you had to cancel closer to the travel date the points would no longer be bankable.

Whereas if you had a July vacation booked, and you needed to cancel it, you could still cancel and bank those points into the next year.

 

[RoseGold]

2nd question, i see us not always using our points every year - especially after 5-7yrs

If this is your goal, I would be buying resale. Then do the opposite and just rent points or stay cash when you want to go back when the kids are grown. The standard usual suspect for this are SSR, Poly, BLT, GF. BLT is a great deal right now.

I'd also be looking at Beach Club or Boardwalk. I know this is not conventional wisdom, but they are such valuable properties, and that's still a lot of time left on them. The part that makes the difference is THE CHART. You have to buy so many less points to do the same thing. Sell in 5-7 years, done.

 

[Sandisw]

As a relatively new DVC owner, I thought that a Dec UY was bad for the fall, as Sept, Oct and Nov are in the 4-month blackout period. Maybe I'm understanding incorrectly? Thanks.

Typo I didn’t catch. I meant it’s not good for fall! Good catch!! I will fix.

 

[Sandisw]

The banking deadline for a DEC UY is July 31st so August Sept October and November would be past the banking deadline meaning if you typically book vacations in those months, if you had to cancel closer to the travel date the points would no longer be bankable.

Whereas if you had a July vacation booked, and you needed to cancel it, you could still cancel and bank those points into the next year.

Because of the 31 day cancellation so you don’t end up with holding, August is still protected as you’d be canceling in July to avoid that.

 

[Robbie Cottam]

Hi all, we are talking with Disney for a purchase of Grand Floridian Villas. The offer is $207/point for 150-points. I had some questions hoping to get help from the community.

1st question - is this negotiable? any success? What is typical historic pricing in past 5yrs for GFV direct?

2nd question, i see us not always using our points every year - especially after 5-7yrs . I could either sell, or I see there is options to rent out points. How does this work exactly? Is the stay still tied to the DVC member, meaning if there are room incidentals, or costs, damages, who has to pay? Is liability shifted to the person renting the points, not DVC holder?

3rd question - if i buy 150 points, does it make sense to break it up into 2 75 contracts? also is Dec use yr good or bad option? How does one decide what is best use yr option to choose from?

4th question - Our family travels 1 to 2 times a year . We always stay Deluxe so when I run the numbers, this looks to be a significant savings vs. paying WDW directly for a room that cost $700+night. What is best way to figure out a breakeven for this? Do you assume a minimum lost value of points, since there is a resale market. I know there is the 1k/yr dues, but how do you calculate out the cost for points, considering they hold their value and can be resold? My assumption is resale value is 160/point, so I technically am paying ~$50/point, If I amortize that over let' say 5yrs, that's $1500/yr + dues?

anything else I should be thinking about that I could be missing?

If you are buying direct I don’t think you will find much wiggle room, my wife swears she got a better than advertised deal on her purchase so it does hurt to ask…

If you rent the points the renter is your guest…. So you may have some liability. I good contract, hep protect you.

One thing you can do if and when you need a Disney break is:

Bank this years points,
Travel next year,
Borrow from the third year….

This way you can do a large vacation,

Bring family, etc.

Get full use of your points

And still have a Disney break without losing points, or renting.

I tend to book early, I have all my travel book for that year well before the banking window closes. Knock on wood, I don’t think I have lose a point yet….

But I also rent out a lot…


If you have two contracts in the same use year you will see no real difference…. Unless you don’t pay for one of them….

I would caution you about multiple use years or multiple memberships.

To your final question there is no right or wrong answer and all answer will be right and wrong at the same time depending on who you ask…

I would run the math the way you would go if you didn’t buy DVC….

If you pay for a cash Disney room compare to that.

If you a DVC renter stepping up compare it to that ….

I have posted other places but I will repost here….

Last year I purchased RR. 200 point 36k. Round numbers

My first trip is coming up…

The rake rate if have paid cash to Disney for the 8 nights was 16k

Rental would have been 7400 plus pay pal fees….

The way I see it.

This one trip would have cost somewhere between 25 and 33 percent of my purchase price not including taxes…..

That how I do my math,

I know 800 people will tell me I’m wrong, or I could have made more investing, or whatever….

Bottom line it was best for me and my family… we are comfortable with our purchase and will enjoy it for many decades to come….

You have to make the decision that is best for you…

 

[kboo]

150 points will not get you far if you decide to stay in larger units or at holiday times, which IMO is the best time to stay at VGF. I wouldn't worry too much about leftover points to rent; we have always found ways to bank them and use them the next year to stay one night longer, or to go to a larger unit. The only time(s) we rented out points was 1) bought a resale contract with expiring, already banked points, and 2) during the height of covid when we didn't have plans to come - and then in Dec 2020 we needed a break and ended up buying one-time-use points PLUS staying at the Swan...

 

[havoc315]

DVD does not negotiate over whatever incentives they have at the time. The only thing they will do is let you spread your payments out over 90 days if you want…assuming you are not financing. They also offer 6 months now interest on the Disney Visa for direct purchases.

If you are a first time buyer, they will not let you buy two 75 point contracts. It must be 150.

Is that a recent change? As a new buyer in 2020, I purchased 200 points, broken into 2 100 point contracts.

In terms of renting, the reservation always stays on the owners membership and ultimately, you are responsible for your guests..which is what a renter is considered to be.

Things have changed over the years in terms of charges and I think they have things in place that limit an owner having issues with a renter charging and not paying ,l..but damage to the room? Possibly the owner would be responsible for getting the renter to cover the cost and see their account locked until they do. But, honestly, I think the chances are pretty slim.

You want to choose a UY that has your trips fall within the first 8 months so you can still bank points or have time to reschedule if something happens.

So, with a Dec UY, it’s great for travel from December through August. It’s not a a good one if you travel in the fall.

Good luck!

 

[havoc315]

Renting out points is fine when you realize there is a period you won't get around to using your points.

But I would not purchase at all, if you aren't planning on mostly using the points yourself for 10+ years.

If you really only see yourself going regularly for 5-7 years, either just rent points yourself or do cash trips. You won't break even in just 5-7 years of use.

And renting out the points is far from maximizing value. It's fine to do it on occasion but I wouldn't purchase with the plan of, "oh.. I'll be renting out the points half the time."

Remember you can bank your points. You can use your points in Hawaii, Hilton head, etc. But ultimately, you need to be doing a "Disney" trip at least every other year. If you see yourself ultimately only using your points once every 3-4 years, it's just not worth buying.

 

[Sandisw]

Is that a recent change? As a new buyer in 2020, I purchased 200 points, broken into 2 100 point contracts.

Yes. When they changed the minimum to 150 in June 2021, they also changed the rule that the initial contract for new buyer needed to be at the minimum.

When you bought, the minimum wasn't yet 150 so that is probably why they allowed you to do the 100 point contracts as they were indeed selling at that level.

 

[crisi]

Probably the biggest risk when renting points is the relationship between you and the renter. A lot of people will ask for half up front and half at 30 days out - but 30 days out is too late to cancel without points going into holding. Or they rent late in their use year, and then if they don't get paid on time, can't cancel and re-rent. Or they are soft for a sob story and let someone travel with a promise to pay the remainder later. Or they allow terms to cancel and rebook that the DVC system doesn't really support - since points expire, banking points takes planning, borrowing is a one way transaction, and you can't really get much short term.

If you treat a rental like the business arrangement it is - get your money up front (or at least get the remainder in plenty of time to rerent your reservation), make your reservations non-refundable and non-cancelable (and you can choose to try to work with someone who has a problem - but DON'T make promises because often you just can't without issues to yourself), your risks are pretty low. YES, if your renter trashes the room, you are liable, that is clear in the contract, but as of right now, I don't think this board has ever heard of a case where Disney has come after someone for damages. That COULD change and Disney could get much more strict on cleaning fees for smoking in a room, or damage done, or stolen towels or whatever.

On the breakeven question - I wouldn't worry about it. Either you can afford DVC AND the system works for you, or you either can't afford it and/or the system doesn't work for you (the system working for you is a BIG deal - understand availability in particular, but cancelation policies, banking and borrowing, check in and check out times, room configurations - you are NOT getting a Disney hotel room and if that is what you want, you won't be happy). DVC is likely to change how you travel, which will change any ROI - its easy to invite friends to use points, for instance. Or decide a two bedroom is the WAY TO GO (and it is, it really is) and once you move from studios, you will not be saving money. Plus any calculations you do to figure ROI can be baked to high heaven through inflation calculations, salvage value, what you use for your time value of money. I can make those numbers tell me whatever story I want to hear (I'm an accountant) - and I can pull data in whatever way I want to tell that story (salvage value - I could sell tomorrow for well over twice what I bought for - that's a good story. In 2008 people were selling who were underwater and had to bring checks to closing - their contracts had decreased from what they bought them for, but they couldn't afford to keep them either - that's the same story with a much sadder ending. And to that first story - sometime after I bought DVC I bought stock in Merck - that's worth three and a half times what I bought it for - plus has provided annual dividends. Buy or don't buy - any justification will result in cherry picking to tell the story you want to hear).

 

[crisi]

Oh, something else about DVC - it takes planning (Disney as a vacation takes planning, DVC adds to it). And deciding to rent is not a decision you can make late - you need to know approximately how you are going to be using the next two - maybe three or four - years of points and make the decision to rent early so that you aren't sitting with distressed points and no reservation. Then once you do rent, those points are used - so you can't suddenly decide that you really do want to use your points for a trip. For some people this isn't a big deal - a lot of Disney goers are planners by nature. But for some people this planning aspect of it - and planning as far out as you need to plan - is overwhelming - or just isn't possible. When my youngest was out of state at college, the college didn't put out their calendar in a timeframe that would let us make travel decisions - and a lot of people have similar issues with school calendars - especially when you start adding in sports and activities. Even jobs that don't allow you to think far enough in advance (its challenging to make DVC work with a military career, for instance).

 

[Genie+]

Probably the biggest risk when renting points is the relationship between you and the renter. A lot of people will ask for half up front and half at 30 days out - but 30 days out is too late to cancel without points going into holding. Or they rent late in their use year, and then if they don't get paid on time, can't cancel and re-rent. Or they are soft for a sob story and let someone travel with a promise to pay the remainder later. Or they allow terms to cancel and rebook that the DVC system doesn't really support - since points expire, banking points takes planning, borrowing is a one way transaction, and you can't really get much short term.

If you treat a rental like the business arrangement it is - get your money up front (or at least get the remainder in plenty of time to rerent your reservation), make your reservations non-refundable and non-cancelable (and you can choose to try to work with someone who has a problem - but DON'T make promises because often you just can't without issues to yourself), your risks are pretty low. YES, if your renter trashes the room, you are liable, that is clear in the contract, but as of right now, I don't think this board has ever heard of a case where Disney has come after someone for damages. That COULD change and Disney could get much more strict on cleaning fees for smoking in a room, or damage done, or stolen towels or whatever.

On the breakeven question - I wouldn't worry about it. Either you can afford DVC AND the system works for you, or you either can't afford it and/or the system doesn't work for you (the system working for you is a BIG deal - understand availability in particular, but cancelation policies, banking and borrowing, check in and check out times, room configurations - you are NOT getting a Disney hotel room and if that is what you want, you won't be happy). DVC is likely to change how you travel, which will change any ROI - its easy to invite friends to use points, for instance. Or decide a two bedroom is the WAY TO GO (and it is, it really is) and once you move from studios, you will not be saving money. Plus any calculations you do to figure ROI can be baked to high heaven through inflation calculations, salvage value, what you use for your time value of money. I can make those numbers tell me whatever story I want to hear (I'm an accountant) - and I can pull data in whatever way I want to tell that story (salvage value - I could sell tomorrow for well over twice what I bought for - that's a good story. In 2008 people were selling who were underwater and had to bring checks to closing - their contracts had decreased from what they bought them for, but they couldn't afford to keep them either - that's the same story with a much sadder ending. And to that first story - sometime after I bought DVC I bought stock in Merck - that's worth three and a half times what I bought it for - plus has provided annual dividends. Buy or don't buy - any justification will result in cherry picking to tell the story you want to hear).

That’s the best response I’ve ever seen on this topic!

 

[Brian Noble]

2nd question, i see us not always using our points every year - especially after 5-7yrs

If this is genuinely true, it might be better not to buy at all.

But, I am not sure it is genuinely true. The point of a timeshare is not really to save money. I am certain I have not saved money on vacations by owning timeshares. Of course, in a sense I am, because the cost of my vacation lodging by using (resale) timeshares is much less than it would have cost me to have those exact same stays any other way. But, the use-it-or-lose-it nature of timeshares means that (a) I am taking many more vacations than I would otherwise and (b) am staying in places I would never stay in if I was paying market rates.

As an example of the former, I already have six weeks of vacation planned in the first six months of 2023. As an example of the latter, the rental rates of this two-story 3BR penthouse on Oahu are eye-watering.



So, assuming this is something you can afford to buy without needing rental income, buy it and figure out how to use every last point. Yeah, you'll probably be at Disney more than you "would have been," and you'll probably stay in rooms you would never choose to rent. So what? Money is for spending.

 

[CVG]

Perhaps @pkrieger2287can answer the question of liability for renters actions?