DVC T &C Personal Use - Only Thread to Discuss!

[muppets3d]

Sorry if real world scenarios don’t fit your predetermined narrative.

It's just that it's irrelevant what I or you or anyone else thinks about what constitutes permissible activity, because we won't be the ones cancelling reservations or restricting accounts if that's what Disney decides to do.

 

[Mai Ku Tiki]

I hope commercial renter doesn't include owners trying to offset some of the annual dues once in while.
I think of a commercial renter as person or an entity (fancy word) whose primary or substantial source of income comes from renting out points.

A very high-income profession can still be a "commercial renter" even if their DVC rental income is not their primary source or "substantial" relative to their professional income or other assets.... which raises the issue of taxes....Are these high-rollers reporting their DVC rental income on their tax returns?
That could be a legal problem for them IF DiSNEY targets them.

I agree with most here that average DVC owners will be ok.
But we know DVC has a right (in original docs) to prohibit "commercial renting."
When we sign on the dotted line, we agree to the terms of the contract.
NOW, because of too many presuming the rules didn't apply to them & exploiting them, we're all checking the box to affirm our knowledge of the contract.

And when even small owners make $ renting points, it IS reportable income for federal taxes.

 

[muppets3d]

The default spreadsheet as displayed shows purchasing 160 Riviera points breaks-even in 2045 and saves $437,000 by 2070 vs renting at $23.

Lowering the starting rental to $20 moves the breakeven to 2054 with savings of $197k by 2070. That takes into consideration increases in dues and rental rates, along with time value of money.

We can fiddle with the rental figure and claim "oh, I can always find someone to rent for $15." Not sure how accurate that is over the long haul. Cheaper rentals tend to be distressed points. At a minimum, that means you're paying more points for a larger room or "better" view. 160 points will yield 5 nights in a Standard view One Bedroom. But if you're forced to book a Preferred view, you need to rent 180 points. Owners aren't making 11 month rental reservations at Riviera for $15 per point.

That's with minimal control over the rental reservation, no member perks, no asset that can be re-sold along the way, etc. At the 15-year mark, the renter will have spent $64,000 with nothing left to show. The owner will have a 160-point DVC contract with 30 years remaining that's reasonably worth at least $20-25k.

I still have the spreadsheet I made before buying where I projected the prevailing rental rate in 2025 to be $13 per point. I kinda missed on that one.

I changed the buy-in price of the points to the actual current buy-in for new members, $235, and did $20 rentals. Because as of today you can work with a broker and book a custom rental for $20 per point - that's an actual real number. Yes you might be able to get someone cheaper, but not consistently so, and I have no way of knowing what promotions a new buyer would be eligible for (Are they on a cruise, do they have a Disney visa, D23 members, etc) so I just did the base rates for each.

So depending on your actual figures the payoff date moves back or forth a bit. You could customize it to your particular situation (maybe you are on a DCL cruise when you buy and get a promotional rate on the direct purchase, maybe you finance the purchase and thus it never pays off versus renting).

The point is though - the math between direct purchases at today's prices and rentals is razor thin. And I think that razor thin margin is a big reason why Disney is cracking down.

 

[Moonspinner]

It begins.

Reminds me of this lol


Not that I’m against renting per se

 

[EPCOT Terran]

DVC, if they do what they are supposed to do for those who own pre RIv contracts s is come up with reasonable definitions on what makes the membership commercial. And in line with FL laws about right to rent.

@Sandisw,

I've seen mentioned more than once about a distinction between pre-RIV and post-RIV contracts. I bought last year into RIV. Can you explain what the difference on the causal renting side would be for me if I wanted to rent sometime in the future?

Thanks!

 

[Genie+]

Claiming a negative impact is false. There are more people wanting the rooms than rooms. There’s no way that they would’ve gotten the room if you didn’t rent and used your points instead you would’ve gotten in the room and they still would be out of a room.

Can you prove no negative impact?

80% of some of the highest points/value rooms/seasons end up on the spec res market. Because it is super easy! If I decide that’s what I’d like to do with my points, I only need to find the first one that exists. Very little is holding me back because I’m not constrained by specific dates or much of else really. I could pick four sets of 2 or 3 dates and not even care if they are concurrent. This is MUCH different than typical personal use activity.

Even if that for-profit activity was only cut in half, my odds at having a shot triple.

DVC wasn’t set up to be an olympic game or for members to profit.

Neighborhoods with parking problems might never be ‘easy’ but many still end up resorting to permit parking when things go sideways. Residents may still have issues, so why bother?

 

[Brian Noble]

I haven't seen a BAN RENTING in this thread I am not sure what you are reading but we are not reading the same thing.

It is interesting to note that the person you are quoting joined DISboards on Tuesday, and has clear opinions on this thread (but only this thread).

 

[Brian Noble]

I changed the buy-in price of the points to the actual current buy-in for new members, $235

That's not what it is at 160 points, because there are developer incentives. It is at worst $226, and you can knock that down to $223 and change by buying a D23 membership.

 

[Mai Ku Tiki]

This made me laugh, but I am also wishing for the best for you. I suspect there are a lot of DVC owners like me who love both AKL and BWV but won’t buy there because it’s infuriating and stressful to compete with spec rental bots.

This is actually what I want to hear, but I recognize there are some circumstances where I hope Disney will allow more flexibility, especially foreign owners.

I would hope that if you have a history of using almost all of your points for your own travel and explain this to Disney, they would be understanding.


That is already happening.

I am not one of Disney’s lawyers, but I am a lawyer (and friends with Disney lawyers) and I am certain they can handle defending this policy without any real risk of loss, especially if occasional rentals are allowed.
They also have a huge advantage, which is that the only person for whom it would be worth bringing a very expensive lawsuit is a commercial renter! I also don’t know how you could demonstrate any significant harm without establishing that you are regularly and predictably renting for profit.

And when their tax records are demanded by Disney, many would probably be caught not reporting all their taxable rental income. No way out!
They'd be crazy to open the whole can of worms.

 

[AstroBlasters]

It's just that it's irrelevant what I or you or anyone else thinks about what constitutes permissible activity, because we won't be the ones cancelling reservations or restricting accounts if that's what Disney decides to do.

Cool. So then why are we even discussing this?

 

[VGCgroupie]

Well I can tell you how it was explained to me when I bought and when I had in depth conversations last year.

In 2009 when I bought, the rule was that if your membership had more than 20 reservations in a rolling 12 months, you’d be flagged and contacted as possibly being seen as using it for commercial purposss.

If you stayed under that 20, no one was bothering you. And thus, those buying who might be doing a few rentals yearly were well under the written rules.

Fast forward to today and because of the ease of renting and exploding of DVC memberships, that high threshold seems to be inappropriate to stop people from becoming commercial renters.

Why do you think there are so many LLCs? Because it was used as a work around.

Now, they have made the language vague and used “frequent and regular”

And when I talked last year in depth, it was up to me as an owner to decide, if I needed to rent, to follow the written contract.

So, based on that, my belief is an owner renting a few reservations, even every year is not frequent or regular enough to violate the personal use clause.

An owner who is has several rental reservations every month and it never stops?

That would seem to shift to commercial use.

This. Why cant people realize DVC was vague for this reason not because they are out to try and punish every person renting. There are bad actors and they are the reason this was done. If Disney isnt vague they will find a work around just as they have in the past. I honestly think buying with an LLC should be stopped not sure if they can are allowed to stop that. That solves some of the problem.

 

[Brian Noble]

One other item to throw into the grinder.

It does not particularly matter whether or not commercial renters represent an availability problem. What matters is whether or not a non-trivial fraction of Members believe that they do. And, it is not hard for a Member to come to that conclusion---rightly or wrongly---after perusing the confirmed reservations for rent for 11 months hence.

 

[muppets3d]

That's not what it is at 160 points, because there are developer incentives. It is at worst $226, and you can knock that down to $223 and change by buying a D23 membership.

I didn't include any because I don't know what new members are eligible for, but the base developer incentives are fair enough. I re-ran it at $226 and it looks like the payoff is 2055.

 

[AnnaKristoff2013]

So when someone says they’re ok with their contracts being valued at $0, I see it as they’re saying “I’m ok if these changes cause devaluation of what I own because the others doing things I don’t like will be having a worse time than me”.

Nah. What those people are saying is that they get more utility out of being able to use their contracts without having to compete with mega renting bot brokers, then they do out of their contracts having resale value. In any event, DVC isn’t going to zero resale value so you’re attacking a strawman.

 

[VGCgroupie]

This! Thanks for mentioning this. I had this thought a while back and forgot about it. I was helping a friend figure out how to rent points for a stay at Animal Kingdom Lodge. I didn't put pen to paper, but this is a reasonable bullet to add to the list of why Disney is now doing this. Being able to rent points for cheaper than purchasing direct kinda kills off the need for future direct buyers. If you bought in a while ago, owning likely continues to be the less expensive route versus purchasing today.

And I by no means want to steer this thread down the path of direct, versus, resale, staying at Disney, not staying at Disney, etc. I do think there is another thread that talks about the continue building of resorts, additional points, etc. Supply / Demand is a delicate balance for Disney otherwise the direct market falls of a cliff.

If you could rent points annually way cheaper than buying, then why wouldn't you? Plus, you're not tied into the long-term contract and retain more flexibility.

Well everyone had their certain tolerances. Not all people are okay with the high risk involved with renting. I have seen many people on FB get ripped off because scammers will be scammers. If anyone rents it should be via brokers. But even then there lies a risk when one needs to cancel. So pool of renters is big but certainly isnt everyone.

 

[tjkraz]

I changed the buy-in price of the points to the actual current buy-in for new members, $235, and did $20 rentals. Because as of today you can work with a broker and book a custom rental for $20 per point - that's an actual real number. Yes you might be able to get someone cheaper, but not consistently so, and I have no way of knowing what promotions a new buyer would be eligible for (Are they on a cruise, do they have a Disney visa, D23 members, etc) so I just did the base rates for each.

I don't know why you'd ignore incentives entirely. $226 is a well established current price for 160 Riviera points. I'm fine disregarding niche incentives that could take it even lower. Going up to 200 points will take it lower. And current members make out even better--and audience that buys points, too.

(Side note: Even at $235 per point, it shows the member breaking even with 15 years remaining and saving more than $167k. I wouldn't call that razor thin. Especially when factoring in member perks, control over reservations, ability to book earlier, ability to re-sell, etc. If you're projecting someone always renting 11 months out to get Value or Standard rooms, probably need some accommodation for time value there, too, given that they're paying out the funds consistently so far in advance. And some greater allowance for travel insurance or lost funds on those occasions when a rental trip gets derailed over the span of 40 years.)

The point is though - the math between direct purchases at today's prices and rentals is razor thin. And I think that razor thin margin is a big reason why Disney is cracking down.

I'm not in any position to say you're absolutely wrong, but I don't really agree with that logic. The professional renters they're cracking down on are making $25...$30...$35 per point. Which in comparison makes buying look even better.

Personally I think this is mostly about member satisfaction. Not that a massive number of people are immediately going to start getting what they want. But if you could somehow eliminate EVERY single AKV Value studio currently being held, and every single Riviera Standard studio, every single Boardwalk Standard Studio, and so on...that's a lot of members getting rooms they aren't getting today.

Yes, there may be some other ulterior motive deep down. But in many ways this is like popcorn buckets. Disney doesn't HAVE to limit purchases to 2 per person. But they do, so that more people can get them. If they have 100 buckets available, they'd rather give those buckets to 50-100 parties rather than letting 10 scalpers buy 10 each. They're selling all the buckets either way. But it's a reasonable limit to keep customers happy.

Here, it's about putting more Average Joes in rooms rather than letting DVC scalpers tie up those rooms for months on end.

 

[MB_01]

You would not have.

But it's reasonable to assume that lots of people would have, because plenty of timeshare developers are able to sell timeshares at similar prices to DVC's wtih zero resale value. Is it a little harder? Sure. But it is definitely not impossible, or even prohibitively difficult.

I’m gonna have so many points when DVC resale drops to zero!
Any insight as to why other timeshares are so worthless for resale? I only have DVC. Do they work completely differently?

 

[Kingkonig]

One other item to throw into the grinder.

It does not particularly matter whether or not commercial renters represent an availability problem. What matters is whether or not a non-trivial fraction of Members believe that they do. And, it is not hard for a Member to come to that conclusion---rightly or wrongly---after perusing the confirmed reservations for rent for 11 months hence.

Exactly. If add-ons are a significant chunk of DVC’s business (which I’m not sure we’ve ever seen actual numbers, but given the Poly add on I would assume it is), they want members who use their product in the way Disney designed to be happy with the system. Plus, while I can’t imagine a ton of members are willing to say to friends and coworkers “I bought a timeshare!”, they do rely on good word of mouth. If members can’t book a room, know why they can’t, and then tell prospective new members why? Disney direct sales will be harmed.

They’re taking the risk that a disgruntled person who rents points out saying “only buy as much as you can use” or “don’t bother, you can’t rent out points easily for a profit” is going to do less damage to the sales team than a current member saying “don’t bother buying, you can’t ever book a room, even at 8am at the 11 month window”. Personally I think that’s an easy risk to take, as I doubt most new members are looking to rent to start. Maybe I’m wrong!

 

[Mouseforward]

Can you prove no negative impact?

80% of some of the highest points/value rooms/seasons end up on the spec res market. Because it is super easy! If I decide that’s what I’d like to do with my points, I only need to find the first one that exists. Very little is holding me back because I’m not constrained by specific dates or much of else really. I could pick four sets of 2 or 3 dates and not even care if they are concurrent. This is MUCH different than typical personal use activity.

Even if that for-profit activity was only cut in half, my odds at having a shot triple.

DVC wasn’t set up to be an olympic game or for members to profit.

Neighborhoods with parking problems might never be ‘easy’ but many still end up resorting to permit parking when things go sideways. Residents may still have issues, so why bother?

Your example permit parking is not on point. You give out parking stickers to prevent people who are not members or authorized to use the parking spot from using the parking spot.

This points out very well the flaw and everyone’s theory that the renters are causing it to be difficult to get certain reservations.

The only way your theory works is if Disney bans renters and takes all their points and makes them disappear. Like parking stickers would make it harder for people who don’t belong in the parking lot to be there.

At that point you would have more available slot for people to rent. But that’s not gonna happen. Those contracts are gonna be sold.

So you’re still gonna have exactly the same amount of people going after the hard to get rooms. They’re not going after them cause they’re a renter or owner. They’re going after them because they’re the most popular room.

 

[muppets3d]

I don't know why you'd ignore incentives entirely. $226 is a well established current price for 160 Riviera points. I'm fine disregarding niche incentives that could take it even lower. Going up to 200 points will take it lower. And current members make out even better--and audience that buys points, too.

(Side note: Even at $235 per point, it shows the member breaking even with 15 years remaining and saving more than $167k. I wouldn't call that razor thin. Especially when factoring in member perks, control over reservations, ability to book earlier, ability to re-sell, etc. If you're projecting someone always renting 11 months out to get Value or Standard rooms, probably need some accommodation for time value there, too, given that they're paying out the funds consistently so far in advance. And some greater allowance for travel insurance or lost funds on those occasions when a rental trip gets derailed over the span of 40 years.)



I'm not in any position to say you're absolutely wrong, but I don't really agree with that logic. The professional renters they're cracking down on are making $25...$30...$35 per point. Which in comparison makes buying look even better.

Personally I think this is mostly about member satisfaction. Not that a massive number of people are immediately going to start getting what they want. But if you could somehow eliminate EVERY single AKV Value studio currently being held, and every single Riviera Standard studio, every single Boardwalk Standard Studio, and so on...that's a lot of members getting rooms they aren't getting today.

Yes, there may be some other ulterior motive deep down. But in many ways this is like popcorn buckets. Disney doesn't HAVE to limit purchases to 2 per person. But they do, so that more people can get them. If they have 100 buckets available, they'd rather give those buckets to 50-100 parties rather than letting 10 scalpers buy 10 each. They're selling all the buckets either way. But it's a reasonable limit to keep customers happy.

Here, it's about putting more Average Joes in rooms rather than letting DVC scalpers tie up those rooms for months on end.

Yes I totally agree, they want the system to be as fair as possible for everyone. If members don't see the system as fair then that's how it falls apart.