Does anyone rent some of their points every year to help offset dues?

[Epcot Forever Forever]

IIRC, this is only if you use depreciation as part of your cost basis for the rental; not everyone does that. You do still have to report the receipts less expenses as income. If you do depreciate, then that reduces your cost basis when you sell, which may or may not be a good thing for you. Probably it is, because the sale will be treated as long-term capital gains.

I don't think crossing a bracket line matters because (at least at the Federal level) they are all marginal rates. If you think of your rental income as the "last", you don't end up paying a higher rate on any of your other non-rental income than you would have otherwise.

It would have to push you into one of those wild zones where you lose a tax break that doesn’t have a phase out or you lose so many take breaks with phase outs at once that it functions as increasing your taxes beyond your marginal income. I’ve encountered this personally when I got a small raise that took us over the tuition tax break when my wife was in grad school and my thousandish dollar raise added $2K to our tax bill.

But those situations are unusual.

 

[Maistre Gracey]

In my opinion, which means absolutely nothing, buying extra points for the purpose of making money (in the form of paying dues) is the definition of commercial renting. I know the 20 times thing yada yada yada…
But the purpose of buying those points is commercial.

 

[zavandor]

It wasn't my plan, but when I bought my second contract I was looking for around 100 points, but ended getting a much better price for 150 points. This was in 2012, when smaller contracts where rarer than they are now.
So I bought more points with the idea of renting some excess to cover in case of reallocations or if I wanted to go in a higher season (I bought assuming I'd go during the cheapest season). Add to that that I budgeted for the more costly views while I'm often able to snag a standard and I have been able to rent quite a few points and offset all my dues in the last 10 years.
I would not recommend at all this strategy if it's needed to balance the book. If the only way to make DVC work is renting some of the points, then I wouldn't buy. The rental market is all but certain: look at Covid, if closures lasted longer, a lot of people would have lost points and rentals would have crashed. Buy only what you can afford and if you can rent the excess, then it's just a plus.

 

[mort1331]

We have been been members for over 10 years and for the 1st 5 this is what we did. Now we were able to buy in low and being from Can. When our dollar hit par,,well we bought more than we needed at that time, because we saw it as a double sale (depressed dollar, depressed $per point). But knowing we at some point would be using all the points. So for the first number of years we never paid dues out of pocket, renting enough to cover and then some. Come Covid and we were in excess territory again so more renting and covering all dues.
There have been times we have used all our points,,Hello Hawaii bigger room, longer stay.
If the economics ever look like they did in 2011/2012 then we would jump at more as well. But right now buying to rent, the points do not work.

 

[kanerf]

I did this through DVC Rental Store this year. I have too many points right now as a full-time worker, but I will be retiring in 2-3 years, so I bought with that in mind. Now, you won't get the price from DVC Rental Store that you might if if rent yourself, but they make it very easy. You just look at the lest of rentals they are looking for and pick one that you can provide. When you make the reservation, you get a portion of the rent paid out immediately with the remainder once the rental occurs.

 

[RoseGold]

But the purpose of buying those points is commercial.

The purpose of renting things out to make money is commercial, but that isn't the definition anyone has used in this context.

 

[Robbie Cottam]

Thoughts on this, anyone do it?
For anyone that owns, SSR in particular, how hard is it to rent your points?
Same question really for all resorts, do you always find you can rent your points?
What do people do with the left over points that are expiring? Do you offer them at a deep discount or just eat it?

I rent some point every year to offset my total cost of ownership…

I add points at resorts I enjoy then rent points I don’t plan on using that year….

I actually figure renters have paid for me to own DVC a couple times over…. Others on the board will tell me I’m wrong….

I tend to plan ahead, I rent point more than 11 months ahead….

If I have any left I bank and use next year….

If you wait til the last minute, you might get burnt, you might 10 or 12 dollars per point…

Last minute you might get 7 to 10 dollars per point…. At that point t just be happy you got anything…

If you plan ahead, you should be able to rent all the points you want. SSR is 18 dollars a point.

You have to remember to use banked points first.

I’m happy to discuss or help further if you want to contact me directly

 

[Maistre Gracey]

The purpose of renting things out to make money is commercial, but that isn't the definition anyone has used in this context.

Yes, but in this case the reason they are purchased is for commercial renting. It’s not that the member has some points left over that they couldn’t use.

 

[Robbie Cottam]

The purpose of renting things out to make money is commercial, but that isn't the definition anyone has used in this context.

I think we had this discussion last fall….
Commercial is not objectively defined.

I think, if I recall correctly, that the “Magic” number is 20 rentals in one year per owner….

“Making money” is also a subjective term.
Are we taking a gross profit or net profit….

There are many not for profit organization that make money….. ever been to a hospital? Or a church?

Disney does not expect you to just lose the value of your points, but they don’t want to be competing with you either.

If you own 3500 point in multiple LLC and all you do is rent points, you might some explaining to do.

Disney has bigger fish to fry….

If you have a few 100 points you aren’t using for a given year….. Disney isn’t going to care….

It is allowed per the contracts!

 

[Sandisw]

I think we had this discussion last fall….
Commercial is not objectively defined.

I think, if I recall correctly, that the “Magic” number is 20 rentals in one year per owner….

“Making money” is also a subjective term.
Are we taking a gross profit or net profit….

There are many not for profit organization that make money….. ever been to a hospital? Or a church?

Disney does not except you to just lose the value of your points, but they don’t want to be competing with you either.

If you own 3500 point in multiple LLC and all you do is rent points, you might some explaining to do.

Disney has bigger fish to fry….

If you have a few 100 points you aren’t using for a given year….. Disney isn’t going to care….

It is allowed pre the contracts!

To add, its not just the word "commercial" that is used in the contract. It is that one is using it for "commercial purposes". Renting is allowed under the "personal use" clause and then is further clarified that renting for "commercial purposes" is different and why the 20 reservation information came about.

 

[Brian Noble]

Just as a reminder: Disney gets first-mover advantage to (re-)define what "commercial" means in this context. If you find yourself in disagreement, you will probably have to resolve it in court, whereupon Disney is likely to very slowly bleed you dry.

 

[Robbie Cottam]

Just as a reminder: Disney gets first-mover advantage to (re-)define what "commercial" means in this context. If you find yourself in disagreement, you will probably have to resolve it in court, whereupon Disney is likely to very slowly bleed you dry.

Redefining a contract usually doesn’t go well.
And Disney would be doing that in a Florida court….. That is as hostile as a home field can get right now….

 

[Jwaire]

Yes, I got the $17 per point. I did have someone offer less to do a transfer, but I told them no, and that I'd rather rent than transfer.

I'm just curious why you didn't want to transfer? It seems like it would be less of a hassle than dealing with changing travel dates, additional payments, etc.

 

[Chuck S]

I'm just curious why you didn't want to transfer? It seems like it would be less of a hassle than dealing with changing travel dates, additional payments, etc.

Well, basiccally, transferring is a matter of trust. Where as renting, I maintain control of the reservation just in case the renter doesn't pay, I can cancel the reservation and bank the points, a transfer is a final transaction...and it requires a phone call to Member Services, where are renting can be done online...unless you're trying to rent an existing reservation. It does require a call to MS to change the lead name on the reservation.

 

[Chuck S]

Redefining a contract usually doesn’t go well.
And Disney would be doing that in a Florida court….. That is as hostile as a home field can get right now….

Yes, but since Disney's definition of "commercial renting" isn't in the contract, but is simply basically a written memo, they can still change it at any time. Remember, prior to the 20 rental limit, there was no Disney definition to be found at all.

 

[Robbie Cottam]

Not disagreeing with you….
Just respectfully pointing out renting is not prohibited ….

Any if anyone has been keeping up with current events, the last thing Disney needs is to been seen attacking at guest in court… over an argument they may not win …

 

[Sandisw]

Not disagreeing with you….
Just respectfully pointing out renting is not prohibited ….

Any if anyone has been keeping up with current events, the last thing Disney needs is to been seen attacking at guest in court… over an argument they may not win …

Plus, they still have to make a program that allows rentals as “personal use”.

IMO, it’s just not something they feel needs to be better defined. They have the numbers and none of us know what steps they have taken against memberships that they believe have violated it.

I just don’t see them going after owners who may be renting points to cover dues by changing the “for commercial purposes” to include that.

Basically, if you are doing that, you aren’t really making a profit but rather simply making your yearly costs 0. iMO, not worth it for DVD.

 

[Brian Noble]

In the same vein as my prior post: At least one other timeshare operator (Wyndham) has invoked the "no commercial use" clause in cases where the owner wasn't "really making a profit."

This is all in the eye of the beholder, and the beholder is Disney. Will they do more than they are doing now? Maybe, maybe not. I can tell you that if I rented DVC points routinely, I would have a ready exit path in mind in case Disney does start paying more attention, and I would use it at the first opportunity. I would not wait around to see if they were serious, because that has the risk of depressing the market.

"Be first, be smarter, or cheat. [...] It sure is a [heck] of a lot easier to be first."

Of course, if this is a once in a while thing---as in once every many years---I wouldn't think twice about it. I might get my hand slapped, but it's not make-or-break.

 

[Sandisw]

In the same vein as my prior post: At least one other timeshare operator (Wyndham) has invoked the "no commercial use" clause in cases where the owner wasn't "really making a profit."

This is all in the eye of the beholder, and the beholder is Disney. Will they do more than they are doing now? Maybe, maybe not. I can tell you that if I rented DVC points routinely, I would have a ready exit path in mind in case Disney does start paying more attention, and I would use it at the first opportunity. I would not wait around to see if they were serious, because that has the risk of depressing the market.

"Be first, be smarter, or cheat. [...] It sure is a [heck] of a lot easier to be first."

Of course, if this is a once in a while thing---as in once every many years---I wouldn't think twice about it. I might get my hand slapped, but it's not make-or-break.

Do you happen to have the specific language of how the POS for Wyndham is written? That could make a difference in the steps they took that DVD might not be able to take.

I'd be interested to see how each contract is worded. My understanding is that there are some things that they were able to do that our contract strictly would prohibit them from doing.

 

[Brian Noble]

It’s basically the same; Wyndham was making it up as they went along. Don’t delude yourself into thinking Disney can’t do the same.