Fair Value of Points

[Trishtack]

Hi - I am a new DVC owner (well in-progress hope to be owner) and booked two studios at BLT for the week of Thanksgiving.

I am hoping another family (friends of ours) will choose to go and stay in the second studio.

I have no clue what the true value of the points are. For the second studio it is costing me 73 points. How do I equate a dollar value to that for compensation for the points?

Also as I am an underinformed purchaser, anyone to take a stab at explaining how I should equate value to my points overall as I take this 50 yr journey?

 

[Chuck S]

The going rental rate seems to be $8 to $12 per points.

Everyone values their points differently. Personally, I take the initial purchase cost of the points divided by the number of years on the contract at time of purchase (for instance, if you just purchased a resort that expires January 2042, you have about 31 years of use left) plus the annual dues.

I figure my OKW points for 2010 cost $5.92 per point, or $51.50/49 years = $1.05+$4.87 dues = $5.92.

 

[backyardponder]

As you lurk on these boards you will find this question asked a lot. Chuck gives a good way to figure a range. With that said, however, there are a number of us who would not charge friends/family going with us. We look at DVC as our home away from home and wouldn't think of charging friends or relatives to share our 2nd home with us. Just a different view.

Good Luck!

John

 

[Dean]

Hi - I am a new DVC owner (well in-progress hope to be owner) and booked two studios at BLT for the week of Thanksgiving.

I am hoping another family (friends of ours) will choose to go and stay in the second studio.

I have no clue what the true value of the points are. For the second studio it is costing me 73 points. How do I equate a dollar value to that for compensation for the points?

Also as I am an underinformed purchaser, anyone to take a stab at explaining how I should equate value to my points overall as I take this 50 yr journey?

There are many variables. First, if you invited them they may expect you are picking up the tab esp since many people see using timeshares as free to the owner. Full market value would be around $12-14 for fully functional points and $8-10 for distressed points, maybe less depending on how distressed. Your underlying costs are your maint fees plus possibly an adjustment for your initial investment. I find that many such situations result in significant issues on both sides. It's not uncommon that the owner sees they're giving a deal and the other party thinks they're being ripped off with the emotions that go with those positions when such conflict arises. Only you know the specifics and must take this info provided by all to decide how you should proceed.

 

[missy2217]

There are many variables. First, if you invited them they may expect you are picking up the tab esp since many people see using timeshares as free to the owner. Full market value would be around $12-14 for fully functional points and $8-10 for distressed points, maybe less depending on how distressed. Your underlying costs are your maint fees plus possibly an adjustment for your initial investment. I find that many such situations result in significant issues on both sides. It's not uncommon that the owner sees they're giving a deal and the other party thinks they're being ripped off with the emotions that go with those positions when such conflict arises. Only you know the specifics and must take this info provided by all to decide how you should proceed.

What are "fully functional points" vs "distressed points"?

 

[Trishtack]

Thanks John for stating what was my thought!

However, I don't believe my friend will accept going without paying. I sort of tried that in saying don't worry about the room, etc. and she kept shooting me down.

The opportunity to go with friends and family at a reduced cost was one of greatest lures for me. Especially as our DD is an only and she loves being with other children.

Any ideas on how to get her to accept it?

 

[Chuck S]

Thanks John for stating what was my thought!

However, I don't believe my friend will accept going without paying. I sort of tried that in saying don't worry about the room, etc. and she kept shooting me down.

The opportunity to go with friends and family at a reduced cost was one of greatest lures for me. Especially as our DD is an only and she loves being with other children.

Any ideas on how to get her to accept it?

I don't charge when we take people with us, whether we share a villa or if I get them their own. Usually, they just buy us a table service meal, if they can afford it. Or, if you don't want to spend all day every day at the parks, they could pay your admission to Fantasia miniature golf, or a small off-site location like Gatorland park. Whatever works best for you and for them.

 

[Trishtack]

Thanks John! I appreciate the input.

I am going to pitch my sales pitch tonight! If all else fails I'll just never cash the check.

 

[rlovew]

What are "fully functional points" vs "distressed points"?

Normally one would consider points that are not able to be banked and need to be used within a few month distressed- these could be points you didn't bank in time or previously banked points that haven't been used or points borrowed for a reservation that is subsequently canceled.

 

[Sandisw]

Thanks John! I appreciate the input.

I am going to pitch my sales pitch tonight! If all else fails I'll just never cash the check.

The other piece, is that you can certainly tell them that you don't want anything. If they insist, tell them what the value is for renters (use the lower end of $8.00/pt) and that whatever they feel is fair to give you.

Then, take the money they give you and use it to treat them to things like dinner, etc. when you guys are traveling. This way, they feel comfortable and you end up treating them still.

 

[Dean]

What are "fully functional points" vs "distressed points"?

They would be points with some limitations on them. They might be expiring in a month or 2, in holding account or good for another 6 months. To a degree, the definition is variable from one person to another.

 

[tomv]

I have been faced with this same situation, it's a little awkward! Perhaps as an alternative let them treat everyone a nice dinner out! It'll give your guests the opportunity to feel like they are contributing!

 

[Crystal_27]

Also as I am an underinformed purchaser, anyone to take a stab at explaining how I should equate value to my points overall as I take this 50 yr journey?

The Guides have a complicated formula that they try and sell you on that sets forth the value of your membership for the full 50 years of ownership. It equates to about $5.00/point. What the formula intends to do is lessen the sticker shock of the initial buy-in cost but I don't think that the numbers are realistic, particularly because it assumes that you will own your contract for the full 50 years, which I think it quite unlikely for most families. If you are looking to value your points for rental purposes, use the $8-12/point range previously stated. If, however, you are trying to value your points overall (which it sounds like you are), I think that the best you can do is to begin a spreadsheet, starting with what you paid for the points, and then, as you book trips, deduct from that initial buy-in figure what you would be paying for the cost of your rooms. Make sure to account for maintenance fees and room discounts. Alternatively, you can do the speadsheet year-by-year and just divide how many points you are using by what you would have paid for the rooms, again accounting for MFs and discounts. Obviously doing it year-by-year will yield a different result each year, but I think that it will get you a little better idea of real value than the general formula the Guides use. Either way, enjoy your Thanksgiving trip. Remember that if the second couple decides not to join you that you must cancel that second studio within 31 days of your travel so your points don't go into holding.

 

[goofy4tink]

Thanks John for stating what was my thought!

However, I don't believe my friend will accept going without paying. I sort of tried that in saying don't worry about the room, etc. and she kept shooting me down.

The opportunity to go with friends and family at a reduced cost was one of greatest lures for me. Especially as our DD is an only and she loves being with other children.

Any ideas on how to get her to accept it?

I traveled to WDW with a friend and her dd a few years ago. I got a two bedroom villa at BWV for us...it was the two 13 y/o girls and a mom each..so four of us. My dd and I shared the master, and the other mom and her dd took the 2nd bedroom/studio. That mom refused to go unless she paid her fair share. So...I gave her the amount she would have paid if she were paying cash for that studio. Then, I took the difference in points between a one bedroom and a two bedroom....then charged her $10 a point for them. When she saw the difference in the cash value vs pt value, she was thrilled. As long as she felt that I wasn't paying her way she was good to go. I think she ended up paying me about $500 for 5 nights!

 

[Muushka]

I had a cousin who would not take no charge for an answer.
I asked him to donate whatever he would like to his favorite animal shelter.

 

[bbangel]

I'm taking my best friend and her family in June. She didn't want to take the room for free either. We finally settled on her paying for my meals for the week. So I feel like she is treating me and she feels like I'm treating her so there is balance

 

[Trishtack]

Sounds like you have a good deal worked out. We are all buying the Deluxe Dining b/c we have 3 pre-schoolers and did all the character meals last time and will again.

She is looking at possibly purchasing a DVC.....

 

[GoofItUp]

We are going with my aunt, uncle, and cousins this summer. They had a room booked at the Dolphin, but I was able to get them a studio at BWV with us. They raise beef, so we traded 1/2 a beef for the room. It was less cost to them than the Dolphin, and a great value to us since we were low on beef.

That's a very unusual deal I'm sure, but the point is that it worked for all of us. Whatever deal works at the time you're going with the people you're going with is the right thing for you.

 

[bumbershoot]

The conversation hasn't yet been had, but if my cousin+her family and my aunt want to pay for lodging during our big trip this December, I'll just have them figure out what an All Star would have cost for that time. That's where they LOVE staying (though they recently had a hubby/wife getaway at Wilderness Lodge), and that's probably where we all would have been staying for this trip if DH hadn't bought into DVC, so it seems fair.

 

[TisBit]

I agree about just buying a nice sit down dinner or something similar. Another option is just to let them pay maintenance fees for those points.....very cheap for them and help you pay your MF's next year.