Contract value?

[Smilelea]

I'm curious how you all value similar contracts but with differing available points. For example, let's say you have 2 contracts, both for AKV 150 points, same UY but one has all 150 points available for 2017 and on while the other has none left in 2017 but all in 2018. In that scenario how much would you devalue the second one?

Thanks!

 

[BillPA]

If you had those points, they could rent for $12-15 a point. But you would need to pay dues on them. I would value them at $6-9 a point.

 

[supersnoop]

In my opinion, the resale market undervalued loaded contracts and overvalued stripped contracts. I imagine a stripped contract would take longer to sell, but sellers seem to get more for their points that way.

 

[Dean]

I'm curious how you all value similar contracts but with differing available points. For example, let's say you have 2 contracts, both for AKV 150 points, same UY but one has all 150 points available for 2017 and on while the other has none left in 2017 but all in 2018. In that scenario how much would you devalue the second one?

Thanks!

It depends on the lead time but usually $12 per point including any dues you have to pay for unrestricted points and $5-6 per point for points you can likely use but are banked or borrowed. I'd also adjust slightly for UY in some cases. It's really pretty easy to adjust between contracts of different size and points availability. When you do this you normally find that a stripped contract is not a good deal.

 

[Spartan86]

I agree that the market doesn't seem to discriminate too much on loaded vs. unloaded. A quick scan of the ROFR thread shows that AKV sold most recently around $80 per point with a few higher outliers and very few significantly below, with loaded and stripped both represented. I think that is because most buyers, certainly my wife and I included look at a DVC resale purchase as buying access vs. buying a commodity - although it certainly can be/is one. We bought for our own use and that of our family. It was admittedly a largely emotional decision, but we sweated the financial details too. As such I created several spreadsheets to calculate a cost per point per year analysis of various price points for the size contract and resorts we were considering. It was easy to edit so I ran calcs on just about every resort including member fees with a yearly cost increase assumption. It was really eye opening as to what is "cheap" and what is not. As always MF's are nearly the whole story on cost of ownership over time. Conversely, looking strictly at a "buy for use" cost of ownership, I saw that price per point at purchase, and loaded vs. unloaded at a similar price produce a negligible effect on long term ownership on a price per point per year basis - at 5 years the difference is pennies. And while I would agree you can/should bid lower on a stripped contract (we did) I disagree that a stripped contract is "not a good deal". It depends on your needs and desires. We all want to buy loaded low and sell stripped high. Ain't gonna happen

 

[Dean]

The swing is about $25 a point roughly fully loaded vs fully stripped, assuming you would be reimbursing for one years worth of dues. On 200 points that's $5K lost forever. I would agree there are other factors such as availability of the contract types but for something one should be able to find fairly easily, it's a serious consideration.

 

[TinyTGO]

I agree that the market doesn't seem to discriminate too much on loaded vs. unloaded. A quick scan of the ROFR thread shows that AKV sold most recently around $80 per point with a few higher outliers and very few significantly below, with loaded and stripped both represented. I think that is because most buyers, certainly my wife and I included look at a DVC resale purchase as buying access vs. buying a commodity - although it certainly can be/is one. We bought for our own use and that of our family. It was admittedly a largely emotional decision, but we sweated the financial details too. As such I created several spreadsheets to calculate a cost per point per year analysis of various price points for the size contract and resorts we were considering. It was easy to edit so I ran calcs on just about every resort including member fees with a yearly cost increase assumption. It was really eye opening as to what is "cheap" and what is not. As always MF's are nearly the whole story on cost of ownership over time. Conversely, looking strictly at a "buy for use" cost of ownership, I saw that price per point at purchase, and loaded vs. unloaded at a similar price produce a negligible effect on long term ownership on a price per point per year basis - at 5 years the difference is pennies. And while I would agree you can/should bid lower on a stripped contract (we did) I disagree that a stripped contract is "not a good deal". It depends on your needs and desires. We all want to buy loaded low and sell stripped high. Ain't gonna happen

I agree. Stripped or partially stripped contracts are not a bad deal depending on the buyer. If you just took a vacation and don't have any more time off, or if financially absolute value is a better fit for you than relative value, then stripped contracts are the way to go.

In a world of unlimited funds, sure, a contracts with points is better relatively as you can grab some yield back by renting them out. However, if you are looking for most points for your dollars, and you don't mind waiting to use them, stripped is better.

Perfect example, a couple with a newborn may be unlikely to travel to Disney for 1-2 years. In that case, why not save on absolute $$$ today to have a larger contract (more points) later. One could argue that why not buy the more loaded contract because of relative value, but in the end, the cash outlay comes first before the potential rental revenue.

As Spartan86 mentioned, if you are purchasing for your own personal use (as I would guess 95% of the members do) the the cost on a per point basis, loaded vs. unloaded, is pennies after a couple years.

All things considered, you should avoid purchasing any contract if it doesn't make sense for you financially <--- personal opinion.

 

[Spartan86]

The swing is about $25 a point roughly fully loaded vs fully stripped, assuming you would be reimbursing for one years worth of dues. On 200 points that's $5K lost forever. I would agree there are other factors such as availability of the contract types but for something one should be able to find fairly easily, it's a serious consideration.

Hey Dean,
Good discussion. Thanks. I'd be interested in an example to support your $25 "swing". We all are going to have different assumptions but my calculations are based on closing here in June on 282 June UY points. Our contract is stripped of 2017 points. We will pay MF's for 2018. In my comparison I had us paying 1/2 of 2017 MF's had the contract been loaded with 2017 points - would have tried to negotiate pro-rated 2017's from closing date. Looking again at my sheets under those assumptions I see I was off a bit as I had started 2018 with the 2017 dues amount. I retract my "negligible at 5 year remark" as inaccurate. However, my 5 year projection for cost/pt/yr was just under $4/pt more with my stripped contract, just under $1/pt more at 10, just under $.50/pt at 15 and $.30/pt more at 20. However, my total dollar cost is actually less with the stripped contract by $1500-$2000 total at each of those year end points (and throughout the life of the contract) as those MF's I assumed under the loaded contract carry forward and the difference in total points available to date becomes less of a player. Not saying stripped is better, just sharing an interesting observation. That $1500-$2000 amount prices the loaded contract at about $5-$7 more per point. I've seen those numbers thrown around before.

Bottom line we are happy. We need no points prior to Feb. 2018 and have already planned how to use/borrow our points so as to arrive at our June 2019 allotment "even", and not carry forward a borrowing pattern. We will see how that goes

 

[Dean]

Hey Dean,
Good discussion. Thanks. I'd be interested in an example to support your $25 "swing". We all are going to have different assumptions but my calculations are based on closing here in June on 282 June UY points. Our contract is stripped of 2017 points. We will pay MF's for 2018. In my comparison I had us paying 1/2 of 2017 MF's had the contract been loaded with 2017 points - would have tried to negotiate pro-rated 2017's from closing date. Looking again at my sheets under those assumptions I see I was off a bit as I had started 2018 with the 2017 dues amount. I retract my "negligible at 5 year remark" as inaccurate. However, my 5 year projection for cost/pt/yr was just under $4/pt more with my stripped contract, just under $1/pt more at 10, just under $.50/pt at 15 and $.30/pt more at 20. However, my total dollar cost is actually less with the stripped contract by $1500-$2000 total at each of those year end points (and throughout the life of the contract) as those MF's I assumed under the loaded contract carry forward and the difference in total points available to date becomes less of a player. Not saying stripped is better, just sharing an interesting observation. That $1500-$2000 amount prices the loaded contract at about $5-$7 more per point. I've seen those numbers thrown around before.

Bottom line we are happy. We need no points prior to Feb. 2018 and have already planned how to use/borrow our points so as to arrive at our June 2019 allotment "even", and not carry forward a borrowing pattern. We will see how that goes

From a financial standpoint here's how it'd look fully stripped vs fully loaded. Let's assume a Dec UY, 200 points SSR though the home resort doesn't matter much. Some home resorts will rent for slightly more than others but the difference is not going to be much. UY matters compared to the time of the year. So a fully loaded contract bought now will have all 2016 points, all 2015 points banked to 2016 UY, all 2017 points and going forward. A traditional fully stripped would have none until 2018 but theoretically could even be missing 2018 or have them restricted and borrowed into 2017. So the difference is 600 points in this situation. Let's assume a value of $15 for the 2016 (bankable) & 2017 points and $7 a point for the 2015 points banked to 2016. That's $37 point difference or $7400. But one is likely to pay the dues on the 2017 points though none for the banked points as part of the closing roughly $6 pp so a net difference of $31 pp or $6200 total. One would have traditional closing costs either way. Now the stripped contract might be slightly cheaper, so one could adjust for that difference, let's use $7 pp as the "discount" for the stripped contract as you suggest leaving us with $24 pp difference or $4800 in this example.

Starting 2018 the points availability and the ongoing costs are the same so it's simply the difference in the first couple of years, fees paid and the price per point. Remember in this example, you'll pay another years worth of dues (11/12) of points you didn't have so that adds another $1100 to the cost difference that most people forget about or don't realize. IMO whether the buyer needs them or not is somewhat irrelevant, the points have an intrinsic cash value that can easily be accounted for. Obviously this example is somewhat the extremes but it is also real world.

 

[Smilelea]

I appreciate all your perspectives. Now to find the right contract...

 

[MrInfinity]

I lean more toward Spartan86's view... i.e. tighter value-gap between loaded / stripped contracts. This is a buy for the long haul, so a few extra points now will be trivial in the grand scheme. For one, I'm not a fan of renting. Most owners are not thinking rent their points to people outside their family either. So I don't value extra points at their rental value. While you get that money, it is for going thru the hassle of finding a renter, getting paid, waiting out their stay, and enduring the costs that renter might incur. So it's not all profit -- you've had to work for that money. If you don't need or want 2016 points, then I would steer toward contracts that don't have them and take the savings up front rather than overbuy to rent out in order to make a deal financially sound.

Also people will get so many points over a life of owning DVC that extras really are not that important. Once you buy in, you're going to take a LOT of trips. Way more than you're thinking now.

Missing 2016 or even 2017 points is fine, but the value of this depends on the time of year. A Dec contract missing 2017 points means no points till Dec 2018, which is a long time. That contract I would heavily discount. But a June contract missing 2017 points would be more tolerable and not discounted by the same amount.

So to me there is no fixed value. It's more subjective and depends on things like when your next vacation is planned. I would look at a Dec 2017 contract having upcoming 2017 points as good. If it had 2016 (Disney's "bonus" points) I would look at those as extra... and tho they are fully rentable, I would not pay $15 more for that contract up front. It would be considerably less than their rental value... Maybe $6-$9 more. If the seller doesn't want that, THEY can go rent them and deal with those hassles, not expect the buyer to pay full rental value without having to do the rental work. If they are truly worth that much, the seller should go do it. But... then the seller has to wait to sell their contract, wait out a renter, etc. See there are hidden costs there.

Net result is the loaded contracts do not value up like you might calculate based on rental value -- rather, the $ gap is smaller, by about half.

 

[Spartan86]

Thanks Dean for that explanation. Interesting. I realize reading your post that I was underestimating what a "fully loaded" contract was - certainly Your definition is a bit more accurate . I'd call your example Über loaded . I think I was simply thinking "current" points e.g. A JUN contract with 2017 points vs. no points until '18. Your comment about timing is certainly a player in your example. With what I think I know about availability between now and December I would not put a lot of faith in my ability to fully monetize or use the '15 and '16 points, although I'm not saying it would be impossible. Of course one could bank the '16's, leaving the '15's to sell/use by December.

So the problem is - and maybe this is what you are saying -is that while "the market" might allow a $90-$91pt price ($78 average current sales price plus 1/2 of $25) for the über contract, I don't think most would sell their stripped at $65-$66 on other end. And I think that is because the contract (Access/membership/ownership) has an intrinsic value as well, beyond the point total or immediate point availability. Good or bad maybe that's the emotional component?

And then there is the "who pays MF's" question. I believe I understand your position to be that most buyers overpay MF's as part of their purchase? Fair enough. But if you were the seller of the über, and had paid '15,'16 and '17 dues, what portion would you expect the buyer to shoulder if buying today? How about if you were selling DEC with no points until '18?

Anyway, thanks again for the discussion. Interesting to flesh some of these nuances out.

Cheers!

 

[Dean]

I lean more toward Spartan86's view... i.e. tighter value-gap between loaded / stripped contracts. This is a buy for the long haul, so a few extra points now will be trivial in the grand scheme. For one, I'm not a fan of renting. Most owners are not thinking rent their points to people outside their family either. So I don't value extra points at their rental value. While you get that money, it is for going thru the hassle of finding a renter, getting paid, waiting out their stay, and enduring the costs that renter might incur. So it's not all profit -- you've had to work for that money. If you don't need or want 2016 points, then I would steer toward contracts that don't have them and take the savings up front rather than overbuy to rent out in order to make a deal financially sound.

Also people will get so many points over a life of owning DVC that extras really are not that important. Once you buy in, you're going to take a LOT of trips. Way more than you're thinking now.

Missing 2016 or even 2017 points is fine, but the value of this depends on the time of year. A Dec contract missing 2017 points means no points till Dec 2018, which is a long time. That contract I would heavily discount. But a June contract missing 2017 points would be more tolerable and not discounted by the same amount.

So to me there is no fixed value. It's more subjective and depends on things like when your next vacation is planned. I would look at a Dec 2017 contract having upcoming 2017 points as good. If it had 2016 (Disney's "bonus" points) I would look at those as extra... and tho they are fully rentable, I would not pay $15 more for that contract up front. It would be considerably less than their rental value... Maybe $6-$9 more. If the seller doesn't want that, THEY can go rent them and deal with those hassles, not expect the buyer to pay full rental value without having to do the rental work. If they are truly worth that much, the seller should go do it. But... then the seller has to wait to sell their contract, wait out a renter, etc. See there are hidden costs there.

Net result is the loaded contracts do not value up like you might calculate based on rental value -- rather, the $ gap is smaller, by about half.

Undeniably the points have a specific value that can be quantified, mentally spreading that out over a longer period doesn't change that. What does change that is availability so for AKV, SSR and the like it's very important. For VGC or VGF for example, there are clearly other factors.

 

[ELMC]

I lean more toward Spartan86's view... i.e. tighter value-gap between loaded / stripped contracts. This is a buy for the long haul, so a few extra points now will be trivial in the grand scheme. For one, I'm not a fan of renting. Most owners are not thinking rent their points to people outside their family either. So I don't value extra points at their rental value. While you get that money, it is for going thru the hassle of finding a renter, getting paid, waiting out their stay, and enduring the costs that renter might incur. So it's not all profit -- you've had to work for that money. If you don't need or want 2016 points, then I would steer toward contracts that don't have them and take the savings up front rather than overbuy to rent out in order to make a deal financially sound.

I also disagree with your thinking when you try to take the extra money lost (or spent) at time of purchase and amortize it over the life of the contract. The extra money spent (or lost in potential rental income) is a real dollar figure that hits the books (and your pocket) in year one. The fact that you're using the DVC contract over 30 years does not change the fact that you may have lost out on a few thousand dollars in rental income today. Now if you don't want to do the work for that income, that's a different story. That's the real justification for buying stripped contracts, because I think the "long haul" argument doesn't hold up.

 

[TinyTGO]

I also disagree with your thinking when you try to take the extra money lost (or spent) at time of purchase and amortize it over the life of the contract. The extra money spent (or lost in potential rental income) is a real dollar figure that hits the books (and your pocket) in year one. The fact that you're using the DVC contract over 30 years does not change the fact that you may have lost out on a few thousand dollars in rental income today. Now if you don't want to do the work for that income, that's a different story. That's the real justification for buying stripped contracts, because I think the "long haul" argument doesn't hold up.

It all depends on where you are financially, as well as, what your purpose of the points is. First off, be it a better relative value doesn't change the timing of cash flows. If there's rent to be had, you collect after (could be 7 months later) the cash outlay of the purchase. Secondly, if you are purchasing points for personal use, and you can't use the points your absolute price per point is the only metric that matters. If you are going to build or buy a home, you wouldn't build/buy it 1 year earlier than you needed it because there are potentially thousands of dollars that can be collected in rent before you moved in. Generally speaking, most would not buy a home with an extra bed/bath strictly for the purpose of renting it out later either. They would just pay a little less in the absolute price for a smaller home. Obviously, sharing a living space is a stretch metaphorically speaking, but I think that the principle is the same.

If a contract matches what you're looking for in timing, resort, and qty of points, using base price per point is a legitimate metric. Get as many points as you can afford and go nuts!!!

 

[MrInfinity]

I also disagree with your thinking when you try to take the extra money lost (or spent) at time of purchase and amortize it over the life of the contract. The extra money spent (or lost in potential rental income) is a real dollar figure that hits the books (and your pocket) in year one. The fact that you're using the DVC contract over 30 years does not change the fact that you may have lost out on a few thousand dollars in rental income today. Now if you don't want to do the work for that income, that's a different story. That's the real justification for buying stripped contracts, because I think the "long haul" argument doesn't hold up.

You quoted my post and said you disagree, but you disagree with something that's not talked about in the post... You quoted this...

I lean more toward Spartan86's view... i.e. tighter value-gap between loaded / stripped contracts. This is a buy for the long haul, so a few extra points now will be trivial in the grand scheme. For one, I'm not a fan of renting. Most owners are not thinking rent their points to people outside their family either. So I don't value extra points at their rental value. While you get that money, it is for going thru the hassle of finding a renter, getting paid, waiting out their stay, and enduring the costs that renter might incur. So it's not all profit -- you've had to work for that money. If you don't need or want 2016 points, then I would steer toward contracts that don't have them and take the savings up front rather than overbuy to rent out in order to make a deal financially sound.

Which is all true. There is a smaller value gap in actuality than one might theorize based on a $15pp/yr rental value.

And yes a few extra points now are trivial over the long haul. Most owners will never rent out their points, which further disassociates this $15 rental value from what we see in sale values. Plus, of the $15 you get for renting, around half of that is earnings from the work of renting them out. Work in this case is a nebulous term since you're not pouring concrete type work, but it is the cost of soliciting renters, tying up your points, maintaining the reservation / relationship and getting paid, plus the challenges and risks that go with it. The value of the points are more around $6-$9, which is the value of the maint / taxes plus a couple $$. And this is supported by what we see in the real world transactions.

Extra money spent up front hits the books now, but I stand by the recommendation that one should not sacrifice resort or UY to save a little up front. That is penny-wise but pound-foolish.

As TinyTGO put it, the price is more determined by the needs / timing of the buyers and sellers than a structured price per point.

 

[MrInfinity]

The sale value of contracts does not go up by $15pp/yr... I'll try to show why:

Say a buyer is looking for 150 points on a Apr UY, and will stay in studios. They are planning for a trip a year out to take advantage of the booking window (Say, May 2018). They're looking at two contracts...

1) 0/2016, 50/2017
2) 0/2016, 150/2017.

You might assert that these contracts should differ in sale value by $1500. (the 100-pt difference * $15pp) But in general they will not.
To the buyer, these contracts are practically the same.

Here is why. With either contract, the buyer can take the same upcoming trip. 7-nts x 20/nt is 140 points.

On contract 1, they're spending 50 2017 points which they'll bank into 2018, plus 90 from 2018 and have 60 left.
On contract 2, they're spending 140 2017 points and have 10 left to spend by the end of Apr2018 UY (March 2019).

They both get the buyer the same result, and both leave the buyer amply positioned for future trips.

Sure. A buyer could buy contract 2, then follow the actions of contract 1 while renting out the points, but generally buyers are not going to do this. That's like saying... Should I buy 2 shovels because they're cheaper, planning to rent one when one would be fine? No generally it will still be better to buy just the 1 and not bother trying to rent out your 2nd shovel to recover its cost.

This is why it's ok to spread the value of these points across the life of the contract. Because having a few more points now, most buyers will not turn around and monetize those points. It will simply mean a few more points that get carried over, and eventually an extra few nights spent in Disney over the life of the ownership.

This is why contracts do not vary by $15pp/yr - x1, x2, or x3 based on degree to which they're loaded or stripped.

 

[ELMC]

Sorry I wasn't more clear. Specifically, this is the thinking that I disagree with.

This is a buy for the long haul, so a few extra points now will be trivial in the grand scheme.

While you are mathematically correct in that compared to the value of all the points over the entire contract one year's points is but a small fraction. But that sort of thinking can be applied to all areas but it doesn't necessarily make sense. Theoretically you can burn one week's paycheck instead of cashing it because in the grand scheme of things, it's only 1/52 of your annual pay. Doesn't mean it would be a good idea.

There is a smaller value gap in actuality than one might theorize based on a $15pp/yr rental value.

And yes a few extra points now are trivial over the long haul. Most owners will never rent out their points, which further disassociates this $15 rental value from what we see in sale values. Plus, of the $15 you get for renting, around half of that is earnings from the work of renting them out. Work in this case is a nebulous term since you're not pouring concrete type work, but it is the cost of soliciting renters, tying up your points, maintaining the reservation / relationship and getting paid, plus the challenges and risks that go with it. The value of the points are more around $6-$9, which is the value of the maint / taxes plus a couple $$. And this is supported by what we see in the real world transactions.

Extra money spent up front hits the books now, but I stand by the recommendation that one should not sacrifice resort or UY to save a little up front. That is penny-wise but pound-foolish.

You're actually making two different arguments here. One I tend to agree with, one I don't. I agree that many owners will not want to rent out their points. I also agree that it is something that many owners are not comfortable with. I also agree that emotion and desire play a role in the purchase and that one should not sacrifice the correct UY or home resort to save money up front. However, when comparing contracts with identical UYs and home resorts, it does make sense to price them accurately based on the value of the banked/current points.

What I specifically disagree with is the part I highlighted in bold above. I think that in this post and the one above, you are providing an unfair assessment of the point rental process. I rented out points last week with www.dvcrentalstore.com. I received $14.50 per point and the entire process took 15 minutes start to finish. While renting the points independently certainly takes more time, based on personal experience I can say that it accounts for nowhere near $7.50 per point. I had 400 distressed points that I had to rent out myself at $10 per point, the entire process took about 6 hours. By your assertion, I just earned $2,000 for that 6 hours of work. In which case I say...sign me up!

 

[Dean]

The sale value of contracts does not go up by $15pp/yr... I'll try to show why:

Say a buyer is looking for 150 points on a Apr UY, and will stay in studios. They are planning for a trip a year out to take advantage of the booking window (Say, May 2018). They're looking at two contracts...

1) 0/2016, 50/2017
2) 0/2016, 150/2017.

You might assert that these contracts should differ in sale value by $1500. (the 100-pt difference * $15pp) But in general they will not.
To the buyer, these contracts are practically the same.

Here is why. With either contract, the buyer can take the same upcoming trip. 7-nts x 20/nt is 140 points.

On contract 1, they're spending 50 2017 points which they'll bank into 2018, plus 90 from 2018 and have 60 left.
On contract 2, they're spending 140 2017 points and have 10 left to spend by the end of Apr2018 UY (March 2019).

They both get the buyer the same result, and both leave the buyer amply positioned for future trips.

Sure. A buyer could buy contract 2, then follow the actions of contract 1 while renting out the points, but generally buyers are not going to do this. That's like saying... Should I buy 2 shovels because they're cheaper, planning to rent one when one would be fine? No generally it will still be better to buy just the 1 and not bother trying to rent out your 2nd shovel to recover its cost.

This is why it's ok to spread the value of these points across the life of the contract. Because having a few more points now, most buyers will not turn around and monetize those points. It will simply mean a few more points that get carried over, and eventually an extra few nights spent in Disney over the life of the ownership.

This is why contracts do not vary by $15pp/yr - x1, x2, or x3 based on degree to which they're loaded or stripped.

They don't which is why a fully loaded contract will usually me a MUCH Better deal. But in reality this is the REAL and hard value difference between the 2 situations. If one buys a fully stripped contract at the same price as they could get a fully loaded one, they are in effect paying in the range of $30 more per point. Maybe it's worth it for the situation but that is the reality. That is factual, there's no way to explain it away.

 

[MrInfinity]

They don't which is why a fully loaded contract will usually me a MUCH Better deal. But in reality this is the REAL and hard value difference between the 2 situations. If one buys a fully stripped contract at the same price as they could get a fully loaded one, they are in effect paying in the range of $30 more per point. Maybe it's worth it for the situation but that is the reality. That is factual, there's no way to explain it away.

Right. But you're saying because you can rent them out, they're worth that much in a sale right now. That's a fallacy. It'd be like saying... Buying a car, I could rent it out for $100/week for 10 years. Therefore, $100x52x10. That's $52,000 profit. Well the car only costs $40,000, so I earn $12,000 free and clear by buying this car. That's faulty logic. You would earn that money only if you forewent using it yourself, paid the maintenance and liability, and worked less at your other job for the time spent renting it plus endured a lot of risk. Even if you just look at renting it for the first year, it still doesn't work the way you're thinking.

The loaded contract is a "much better deal" to you, if you are someone who wants to buy it and rent out the points. Yes. But that is not the norm. To most, the loaded contract is only a "little better deal". Thus, you do not see the $15 price gap.

They're not paying in the range of $30 more. They're paying a little more, but getting extra points they'll spend over the next 40 years. You're saying exactly what I said is not realistic, above... That is, that most buyers would exercise option 2) but rent out the extra 100 points. They are *not* getting $30 that they will monetize. They are getting approx. $6-$9 pp/yr, which is the value of the maint & taxes plus a couple $$.