Diminishing Value of Renting Points?

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[itsmyhappyplace]

I have been learking around here for 3+ years. And, for a long time I was amazed that the rental rate has stayed constant at $10. Simple logic would tell you that they should increase in step with WDW hotel rates.

Why has it not? Well, it has been 20 years - but I was an Economics major! And to me it is quite obvious that the supply has outpaced or remains constant with demand!

Since I joined DVC has grown by about 30K members. And, in 3 years we should have 30K+ more.

In addition - the DVC membership is changing as the years move along. Kids that were 10 and 12 in '93 are now 26 and 28! So, I can see that some folks just do not use DVC the way they may have in the past.

For example, I have a friend who inherited 600 OKW pts from his deceased father. He uses 300 pts each year and sells the rest. For 3 years running he has sold for $10. He told me that he would like to get more - but - is nervous about raising the price since so many others are selling at $10 and below.

In the end, Buyers and Sellers will make rational choices in the market place. If there were more buyers then sellers - then - the price would increase. I honestly believe that the $10 to $12 will hold constant for a few more years!

I agree with you whole-heartedly. There is a supply and demand factor here. But maybe those of you that decide to rent point to others for one reason or another need to look elsewhere for renters. The demand may not be increasing here on these boards, but on the open market it very well me be. There are other websites including Ebay to rent out points. Disney’s hotel business has been going nowhere but up in the last couple of years. They have been able to raise prices consistently and demand is still increasing steadily. There is no reason that DVC owners cannot do the same.

I have never rented from anyone on this board, because I just discovered it mainly. However, I have been paying $940 for 5 weekday nights for the last couple of years. Why have I paid this much for $65 points? Well the answer is easy. I stay at the BCV for under $200 a night for a room that would cost me $273/night even with my AP discount. I am allowed to book 11 months out to guarantee my stay rather than be disappointed by not getting the location I want. I could book with someone here, but are you going to allow me to book so far out? Most of you seem to be last minute, and for that I would only pay $10/pt.

In short, if you want to get more money for your points, you have to take the initiative to peddle your wares. Go door to door in a matter of speaking. I think that some of you are not aware of the real value of what you hold.

 

[Plutofan]

Another main advatage with "actively renting points" especially if you bought more points than you intend to use is the "tax" advantage of being in the business of renting points. Your intention is not to break you agreement from Diney in renting for a profit but a quick bit of math (sans maintenance fees over the life of contract!) gives insight into the 10 per point rental fee bside the excellent expample DISPOP gave.
a 45 year contract at current rate of 92 PP = out to a little over 2 dollars a point invest over that span - so clearly selling your points for any particular year at 10PP is a profit. this is however to your advantage because this is exactly how the IRS views this transaction which leads intothe second hidden advantage of renting your extra points.
If you actively pursue seeking rentals for extra points in any given year then you are using your points for the purposes of making a profit and by doing so you meet the minimum guideline for the IRS to consider this a "business" now that being said there are two other advantages in this business:
1. Most of your annual dues, taxes and excahnge memberships fees are covered as full write offs against any rental fees you obtain in any particular year. This is a direct advantage and essential reiburses you for most of the annual cost for maintenance fees - it's not a 100% re-imbursement but it is close.
2. Anytrips you make to the resorsts can be considered for "business" purposes as long as you are there for a "legitimate" business purpose - Well staying at the resort to "greater increase" your knowledge of the resort to better service your rental clients would certainly qualify would it not? also you just have to attend those pesky "condiminium meetings in November or December don't you! this nets you a 50% discount on your travel realted expenses INC. Food especially if you tell your waitress about the great benefits of renting DVC points from you ; . ) wink wink nudge nudge!!

so in summary, you can recoup most if not all of your annual maintenance fees - wirte off those fees on your taxes, travel to WDW and other "tradeable" locations as basically "familirization" trips and you can do this year after year.

Now let's also say that some years you intend to use most of those points! so why not hold a small percentage in reserve with the active intent to sell them at $15 a point? you know this will not net you an offer and if you do get an offer - well what a bonus for that year - you make a loss for the year - write everthing off and hope to make a profit the next year. and according tho the IRS you only are required to ahow a "profit" every three years.

I can rent 200 Points at $10 PP generate 2K in cash to cover almost 2 years of maintenance fees still go to WDW on my other block of points and otherwise maximize my enjoyment, and I am not seen as goughing any one for the points renting or seemingly making an intent to make a profit because I am seeking only to rent my points at what the "market wil bear" at any particular time.

Thanks,
whiles

I would definitely talk to a tax professional before acting on any tax advice on renting from these boards and all professionals should consider IRS Circular 230 before posting with any sort of tax advise.

 

[Bill K]

I bought into DVC for my families personal enjoyment. The only time I would concider renting out points is when my point balance is low and have no use for them. Why have them expire if someone can enjoy them.