Does DVC still make sense now that renting points is so cheap?

[invalid_char]

We are at a crossroads now as to whether to do an add-on (and get the number of points we need before the price increase) or to sell our DVC interest and rent points. With many points now available for $6pp (I have been examining the rental boards and this does seem to be the case), the rental cost is becoming perilously close to the maintenance cost. Should the rental cost dip below the maintenance cost then, in my mind, DVC is basically worthless: you can get the same product for the same cost without ever having to buy anything!

Is anyone else concerned about this?

I spent $21,000 to get 300 BCV points ($70pp). For the sake of discussion, I am only going to look out 30 years, because the variables beyond that point are too difficult to predict. I will be generous to DVC and assume that maintenance costs do not increase over the next 30 years, although they probably will. My maintenance fees will be (4 * 300 * 30 = $36,000). I will also not factor in what I could earn if I invested my maintenance fees or my initial investment (knowing me I'd probably lose it in the stock market) and, given that Disney believes they can get $84pp for BCV, I will assume that I can atleast get back my initial investment of $70pp. $36,000 + $21,000 = $57,000. $57,000/ $6 per rental point gives me 9500 rental points over the next 30 years. 9500/30 years = 316.66 points per year. Over the next 30 years I would then have MORE POINTS AT MY DISPOSAL IF I SELL MY DVC AND RENT POINTS than if I keep my points. I may even have more points to rent if I get more than $70pp for my BCV interest.

Now it is true that points may not stay at $6pp, but they could also go lower as Disney continues to expand DVC. And it is also likely that maintenance costs will go up higher than $4pp, which would also tilt the equation in favor of renting.

Renting also relieves you of the burden of having to bank, borrow, and rent if you would like to use fewer points one year. I am not saying that I do not love DVC it's just if you can get the same exact accomodations more cheaply, shouldn't you do that? Why give Disney your money and really get nothing in return. It is SO easy to rent points!!!

Please, someone convince me that I'm wrong. I love the feeling that I am a member, but I am not willing to give Disney thousands and thousands of dollars more just for a feeling.

 

[mikesmom]

Personally, I've only seen a couple of posts at $6 and those appeared to be distress sales (about to lose them). I've seen way more posts begging to buy at $6 or $7 or $8 and apparently not getting them. I've even seen quite a bit of trying to get November or December ressies at any price and none being made available.

As a matter of fact, I think we're starting to hit the critical mass of non-DVC people being aware that points can be rented. It's all over the non-DVC bards about the great deals and accomodations DVC rentals are. As with other good things at Disney, I see people getting a way inflated idea of just how cheap they can get a lot of space. I think you're appraoching a point where those desiring to rent are rapidly outstripping those who can rent (let alone want to rent)

I think any softening of point prices or even of room prices in Orlando is due greatly to a softened economy. As with anything else, this too will pass. I think if you sell now, in a couple of years at most you'll be kicking yourself. Points will be high or unavailable and rooms will be back up to the same ugly rates.

 

[DVCajun]

As is in discussion on another thread, $6 isn't the "going rate" for points. On these boards, the going rate is $10 with some going lower because of what mikesmom termed "distress sales." Those are not the norm. I have never seen $6 a point and I personally think it would be nuts to rent that low. You might as well stand in a dark alley with money in your hand. $10 is a deal for the renter, and I personally will never rent them for less. While I don't like to rent my points, I have done so in the past and my *average* rental went for $12.50 a point. In fact, I won't rent my points for $10 a point. They're worth more to me than that.

I'll say it again-- give me a call if you're willing to rent that low! I'll duke it out with the rest of the folks here to rent them at that price.

 

[PamOKW]

The question really is whether you want to own enough points to make your own decisions on when and how to book or whether you want to turn to strangers to help complete your vacation plans. With Disney offering so many deals, I can't see the allure of renting at all. I'd rather just book through Disney if I had a problem or a "one time" trip that needed time beyond my point availability.

It's really a question of whether you want to own and plan to use that many points on a regular basis or whether you have occasional times you need more points and don't mind the hassle of tracking down someone to rent to you. As the economy improves, some renters may also begin to use their points again.

 

[erikthewise]

I think Pam is right on the money. I also considered the possibility of renting points instead, but realized that I just wasn't interested in the major inconvenience of working through a (likely different!) third party year after year. To be sure of getting an 11 month booking, you'd have to start looking to rent at 13-14 months, etc..... Better to just have my own points.

Also the difference between the financial analyses of renting at $6 or $10 is enormous, like the difference between a 6% mortgage and a 10% mortgage. Even a single dollar per point, projected over 30 years, could change the picture completely. All the more reason to take such analyses with a large grain of salt.

 

[TroyWDW]

Just a suggestion to your thought process.

Try using your same logic but look at owning DVC for the first 10 years, selling your contract (recovering the initial investment or some portion of it), and then renting for the next 20 years.

Then do the same calculation owning for the first 20 years and renting for the last 10 years.

Which scenario do you like best?
1) Own for 30 years
2) Own for 10 years, rent for 20 years
3) Own for 20 years, rent for 10 years
4) Rent for 30 years

Troy

 

[adamak]

I have the same kind of arguement with myself. Add on or rent more points. And so far, I have opted rental. I mean, buying addons is a long term committment. I may not need more points year after year. I already have bought enough 'minimum' points for the next 40 years. On those days when I need more points, I think rental will work better for me.