Followup - "Sell me on DVC"

[CanadaDisney05]

OP here. Does anyone have any experience with using this RCI network to use your points towards other resorts around the world?

 

[Deb & Bill]

OP here. Does anyone have any experience with using this RCI network to use your points towards other resorts around the world?

With the high price of DVC points versus other timeshares, you get the best use of your points by booking DVC resorts. If you really want to stay at another timeshare, you could rent out your points and use the proceeds to book a different vacation.

 

[anomamatt]

I respectfully disagree. When I bought BWV in 2012 I was getting about $10-11 per point in rental income vs. $5.61 per point in dues. Fast forward to today and I can easily get $15-17 per point in rental income vs. $7.17 in dues. Other resorts mirror this pattern as well. In that time span point rental prices have actually increased at a rate greater than maintenance fees.

To be bit predictive, if the number of unfilled reservations out there on the point rental websites is any indication, we are poised for an increase in rental prices pretty soon.

Thanks for that data. I'd be very interested in comprehensive data from a rental perspective, if it exists. My statement was based on the lack of rental price increase (at least from the rental companies) when MF went up ~8% across the board from 2018 to 2019. Most people are expecting two more rounds of similar MF increases (due to the increased costs associated with $15/h that are coming).

You very well may be correct and perhaps the rental prices are lagging... But I've long held the view that rental prices are too low. Maybe I'm wrong, but I expect MFs will be over $10/point two years from now... I'm not sure rental prices will be >$20/point in 2021. But I suppose it's possible.

I also like to look at the BCV example... if you bought points direct (people do, strangely enough) and rented them out (I assume no one does -- I hope), you would lose money every single year, starting in Year 1. That is another sign that rental prices are currently too low. You can argue DVC is overpriced, but people are paying it... and the savings on rental points versus cash rates is enormous.

 

[Deb & Bill]

Thanks for that data. I'd be very interested in comprehensive data from a rental perspective, if it exists. My statement was based on the lack of rental price payout (at least from the rental companies) when MF went up ~8% across the board from 2018 to 2019. Most people are expecting two more rounds of similar MF increases (due to the increased costs associated with $15/h that are coming).

You very well may be correct and perhaps the rental prices are lagging... But I've long held the view that rental prices are too low. Maybe I'm wrong, but I expect MFs will be over $10/point two years from now... I'm not sure rental prices will be >$20/point in 2021. But I suppose it's possible.

Rental points were stuck at $10 a point for many, many years until there was more than one broker out there. Once David got competition, he had to raise the price per point to make sure he got owners to work with him instead of the other guy.

 

[lovin'fl]

With the high price of DVC points versus other timeshares, you get the best use of your points by booking DVC resorts. If you really want to stay at another timeshare, you could rent out your points and use the proceeds to book a different vacation.

Yeah. We have never done it. We once tried. Called about finding a carolina area beach resort for Aug of 2012. Called in Jan. They only offered up dumpy old places with icky online reviews. They said, 'but, you know Vero Beach is open'. We were driving from MD so wanted 7 hours or less but said 'what the heck' and booked Vero for 4 nights. Then added 2 nights at Hard Rock Universal to see the Harry Potter stuff. Long drive but fun trip. Booked a 2BR with our OKW points (at Vero).

Also booked HHI 1BR in July 2009 with OKW and loved it so much we bought HHI points. We booked BCV studio for Xmas 2016 (for in laws) with OKW points. Just stayed at BLT in 1BR in March (used other points as non-BLT owner, can't remember which resort we used). Got POLY studio for NYE 2017-18. Did BWV and VWL split in 1BR over July 4th 2008. Got BCV 1BR, BLT studio and VWL 1BR at F&W time (over several years) with OKW points. Disclaimer though...we do 3-5 night stays or splits of 2-4 nights each part (often). We have done SSR (and AKV) a lot too...which we enjoy and they are easy to get. We also had a 2BR at BCV in Jan once. BWV...we got that a few times before finally buying there in 2014. Originally bought OKW in 2006 (and are in process of selling those actually...in ROFR).

 

[crvetter]

I'm curious why you think the risks associated with the rental aspects are high.

I will say that they are a lot higher now than they once were, but mostly because the cost of points is so much higher that it extends out the payback timeline. Like you said, I think that having rental as an outlet for times where you have points you might not use (whether from a new contract or a skipped vacation) is probably the middle ground of rental engagement. The far ends of the spectrum are complete avoidance and doing it for a living, so to speak.

I don't think the risks of rental itself are inherently high. I think buying extra points with the explicit desire to rent them is high. Mainly because renters are wanting the cheapest accommodations (studios which are already hard to get), once the next recession hits you are sitting with extra points unlikely able to rent, and DVC could say if you are consistently renting out X points a year it is a business in nature for renting (which the POS expressly prohibits). Renting as presented in the POS is intended to be happenstance, not buying more to create in an income stream. Also as @Deb & Bill stated the brokers could be asked to shut down any day if DVC really wanted to push the issue.

 

[crvetter]

Thanks for that data. I'd be very interested in comprehensive data from a rental perspective, if it exists. My statement was based on the lack of rental price increase (at least from the rental companies) when MF went up ~8% across the board from 2018 to 2019. Most people are expecting two more rounds of similar MF increases (due to the increased costs associated with $15/h that are coming).

You very well may be correct and perhaps the rental prices are lagging... But I've long held the view that rental prices are too low. Maybe I'm wrong, but I expect MFs will be over $10/point two years from now... I'm not sure rental prices will be >$20/point in 2021. But I suppose it's possible.

I also like to look at the BCV example... if you bought points direct (people do, strangely enough) and rented them out (I assume no one does -- I hope), you would lose money every single year, starting in Year 1. That is another sign that rental prices are currently too low. You can argue DVC is overpriced, but people are paying it... and the savings on rental points versus cash rates is enormous.

Really the rental market seems to be quite flush in the cheaper cost per point resorts (hoping really for the 7 month window by the people renting the points) than the "premium" resorts as some rental brokers market. There should be a much larger gradation of cost per point if you book in the home resort priority period. As you point out BCV is severely under-priced on the rental market perhaps the most extreme; the next or equal to it would be VGC which the discount on the cash room there is crazy high (considering the rooms almost always go for rack at all 3 onsite resorts).

 

[ljmiii]

Really the rental market seems to be quite flush in the cheaper cost per point resorts (hoping really for the 7 month window by the people renting the points) than the "premium" resorts as some rental brokers market. There should be a much larger gradation of cost per point....

For a short time I was thinking of getting some extra VGC points and so was stalking the various transfer boards and forums. There you do see that gradation you are looking for - VGC higher than BCV higher than BLT/VGF higher than anything else. David's et.al. are definitely underpricing some resorts and overpricing others.

 

[crvetter]

For a short time I was thinking of getting some extra VGC points and so was stalking the various transfer boards and forums. There you do see that gradation you are looking for - VGC higher than BCV higher than BLT/VGF higher than anything else. David's et.al. are definitely underpricing some resorts and overpricing others.

Yeah agreed. Though I would suspect that the Rental Brokers really set the price, only because a majority or rentals I assume go through them. I also think the $18, which was one of the higher asking prices at the time, I paid for renting VGC was far too low (on DIS not through a broker). I mean my total cost in a studio at VGC ended up being 20% cheaper than staying at Paradise Pier, which while nice is no where near the level of GC, for the same time including a Costco Discount.

I will say the broker's cut is quite high on rentals too. 18% commission seems high considering when I worked with them all the did was send me a list of requests and said pick one that you can fulfill. Though they served a purpose because I had no time to rent out the points on a contract I bought and they did have people ready to rent which I didn't have to hunt for.

 

[we"reofftoneverland]

The rental market scares me personally. What if someone rents out your points and trashes the room? To me the couple of hundred dollars you might make is not worth it. Plus, ssr points are not valuable on the rental market compared to other resorts. It's the low rent district. Lol. I wouldn't want to depend on ssr points for rental income. There are better investments out there.

 

[Deb & Bill]

Thanks for that data. I'd be very interested in comprehensive data from a rental perspective, if it exists. My statement was based on the lack of rental price increase (at least from the rental companies) when MF went up ~8% across the board from 2018 to 2019. Most people are expecting two more rounds of similar MF increases (due to the increased costs associated with $15/h that are coming).

You very well may be correct and perhaps the rental prices are lagging... But I've long held the view that rental prices are too low. Maybe I'm wrong, but I expect MFs will be over $10/point two years from now... I'm not sure rental prices will be >$20/point in 2021. But I suppose it's possible.

I also like to look at the BCV example... if you bought points direct (people do, strangely enough) and rented them out (I assume no one does -- I hope), you would lose money every single year, starting in Year 1. That is another sign that rental prices are currently too low. You can argue DVC is overpriced, but people are paying it... and the savings on rental points versus cash rates is enormous.

Rental prices have to stay below Disney's discounted rate because non-owners would be able to book direct from Disney, not worry about cancellation and get daily full cleaning. Usually there is more availability for points stays since members own 95-97% of the points for the resort, but as Disney ROFR's more points, they have more to rent out. But as members get smarter, they book closer to 11 months out instead of waiting until five or six months out. And renters also are getting smarter and getting with the broker at 12 months out to have a member ready to book exactly at 11 months out.

 

[ELMC]

I don't think the risks of rental itself are inherently high. I think buying extra points with the explicit desire to rent them is high. Mainly because renters are wanting the cheapest accommodations (studios which are already hard to get), once the next recession hits you are sitting with extra points unlikely able to rent, and DVC could say if you are consistently renting out X points a year it is a business in nature for renting (which the POS expressly prohibits). Renting as presented in the POS is intended to be happenstance, not buying more to create in an income stream. Also as @Deb & Bill stated the brokers could be asked to shut down any day if DVC really wanted to push the issue.

Thank you for clarifying. I happen to agree with just about all of this. Also, there is a loose (or perhaps stated) rule that more than 20 reservations per rolling 12 month period is defined as commercial activity by Disney and will earn their attention.

To draw a parallel, we recently found out that Owner's Locker was not allowed to deliver our locker for our recent stay at Lowe's Royal Pacific. The reason? Lowe's decided that they weren't allowed to deliver there anymore. If I were the owner of that business it would send chills down my spine that if a critical mass of hotel chains did this, they would effectively be out of business. Now my understanding is that they have an arrangement with Disney so that likely won't happen. But I'm not sure the point rental brokers have such an arrangement, and if Disney does in fact crack down on renting reservations, it is a doomsday scenario.

 

[anomamatt]

Rental prices have to stay below Disney's discounted rate because non-owners would be able to book direct from Disney, not worry about cancellation and get daily full cleaning.

I understand renting needs to be cheaper than cash rates. But I rented points (from a disboards member) @ $18/point for VGC. I still saved 45% off the best deal I could get on a hotel room at VGC. Meanwhile, I contacted two of the big rental companies who couldn't get me points. At least for some resorts, the pricing model is broken. I think 45-50% savings over cash rates (even with the best discounts on the cash side) is way undervaluing the points.

And I totally agree with @crvetter that not all "premium" points are the same (e.g., VGC, BCV, VGF,...).

 

[crvetter]

But I rented points (from a disboards member) @ $18/point for VGC. I still saved 45% off the best deal I could get on a hotel room at VGC.

This was my experience too. I just don't get how VGC renting can even be going for less than Paradise Pier cash rates. Not to mention as you said the 45% less than GCH rooms (all discounted rooms too when I was renting).

 

[ELMC]

This was my experience too. I just don't get how VGC renting can even be going for less than Paradise Pier cash rates. Not to mention as you said the 45% less than GCH rooms (all discounted rooms too when I was renting).

DVC is an inefficient market in just about all aspects of the product. It makes sense that the rental market is not so dynamic that it meaningfully differentiates between the tiers within the tiers. But it just takes on person to advertise VGC points for $25 each and one person to pay it to set a new precedent. Seeing as how I sold my VGC contract when prices hit $200 per point I will not be that person unfortunately.

 

[zavandor]

1) Several people seemed to indicate that DVC is not about the numbers. It's not an investment. Think of it as an expense rather than an asset. I was hoping for more elaboration on this. Perhaps I am missing out on a major benefit. From what I understand, buying into DVC doesn't really enhance your experience in anyway. It's the same product as if you were to buy a hotel room from Disney directly for cash each trip. Buying into DVC is basically paying upfront (and some small annual dues) for a series of discounts on future hotel rooms. Am I wrong? If I am not wrong, this would indicate that purchasing DVC is an investment, and the numbers are the whole purpose behind it.

I had a diffent approach to my calculations before buying DVC.
I used to stay in Values and offsite. I wanted to stay in deluxes but didn't really want to pay $300 to $600 per night to do so. So I looked at DVC and calculated if I could afford it. I wasn't really looking at savings, because I would never book the Poly or the Contemporary for cash, I was looking at upgrading my type of accommodation. From this point of view, it hasn't been an investment, I'm actually paying more than before (more trips, more flights, more food, more tickets), but I'm also enjoying my vacations more.
And it was also an emotional decision, but that's another story.

3) After doing a bit more number crunching, I came up with the thought that instead of buying a small contract, maybe the best way to go is to buy a larger contract and rent out the excess points. David's uses the value of $13.50 per point goes to the owner of rental points. Even if I were to lowball this at $12, I figure on a 140 point contract, and visiting every two years for 7 nights, I can roughly rent out any excess points and break even on my annual dues. This would mean that the only out of pocket cost would be the upfront cost.

Has anyone here implemented a strategy like this? How easy is it to rent off your points.

That's what I did. Shortly after buying my first contract I got a new job offer and moved to London. This meant I went from planning a visit every three years, to twice every three. So I started looking for an add-on, but contracts in the 75-100 range were even more uncommon than now. So I ended up buying a 150 points add on: it was cheaper, it was loaded which meant I could offset some of the initial costs renting those banked points and I also thought it was a good idea to have a few extra points in case I wanted to visit during a more expensive season, book a bigger unit from time to time or as an insurance against reallocations. I also though I could rent the extra points to offset the dues and it worked very well until now. I think I've rented enough points to cover all the dues I've paid in my 7 years of ownership.
However, key to this strategy is being able to affort to pay the dues on all points without any problem. While the rental market has been very good in the latest 5 years, it's not guaranteed.

 

[rg35]

The rental market is good now, but this isn't a reason to buy or consider as a long term strategy.

• If the economy goes bad (which it eventually will), rentals will slow down as people don't have disposable income for vacations and travel.
• As Florida weather gets more extreme as climate change accelerates, people may not have the same propensity for taking Florida vacations (which will also derail the resale market)
  
• DVC may at some point decide to eliminate rentals.

Basically, buying DVC for any reason other than vacationing at Disney are the wrong reasons for buying DVC.

 

[stewart715]

1) Several people seemed to indicate that DVC is not about the numbers. It's not an investment. Think of it as an expense rather than an asset. I was hoping for more elaboration on this. Perhaps I am missing out on a major benefit. From what I understand, buying into DVC doesn't really enhance your experience in anyway. It's the same product as if you were to buy a hotel room from Disney directly for cash each trip. Buying into DVC is basically paying upfront (and some small annual dues) for a series of discounts on future hotel rooms. Am I wrong? If I am not wrong, this would indicate that purchasing DVC is an investment, and the numbers are the whole purpose behind it.

DVC does not save you money. I don't see how it could. It will save you a TON of money on accommodation cash rack rates. But it won't save you money.

I'll elaborate. If you didn't have DVC, would you go every year? Would you then be enticed to go every 2 years? Would you buy annual passes? Would you buy every freaking piece of merch that you can get your hands on? My guess is no. DVC feeds the WDW addiction. Do I regret this? Not a single bit. That place brings me and my family so much freaking joy that I'm proud of every penny spent.

The right (cheap way) to do DVC is buy half the amount of points for a stay, go every other year in a studio for one week. And leave it at that. Unfortunately, that's not what happens. You end up adding on contracts. You start taking extended family down. You become known as the Disney Family to everyone you know. People are surprised when they see you and you don't have Mickey ears on.

So no, it's not an investment. It's a life choice. You are making WDW your home and a part of your life. You are saving money on per night accommodations but the number of "per nights" is likely to be drastically greater than if you hadn't joined DVC. The number of WDW gear sprinkled throughout your home and life is likely to be drastically greater than if you hadn't joined DVC. Again, I don't regret this one bit

 

[AdamsMum]

From what I understand, buying into DVC doesn't really enhance your experience in anyway. It's the same product as if you were to buy a hotel room from Disney directly for cash each trip.

It isn't just a hotel room though. Even a studio with it's kitchenette was more convenient for me than a hotel room. Having the kitchenette or a kitchen, and more space enhances my experience. Staying in a better resort, in a better location enhances my experience. Not having to wait for a bus after fireworks at least some of my days enhances my experience. If it's just a room you want, then I don't think DVC will enhance your experience, but it did mine.

I used to stay in Values and offsite. I wanted to stay in deluxes but didn't really want to pay $300 to $600 per night to do so. So I looked at DVC and calculated if I could afford it. I wasn't really looking at savings, because I would never book the Poly or the Contemporary for cash, I was looking at upgrading my type of accommodation. From this point of view, it hasn't been an investment, I'm actually paying more than before (more trips, more flights, more food, more tickets), but I'm also enjoying my vacations more.

I agree with you there, I was tired of staying in cramped hotel rooms in not great locations. I was staying in moderate resorts and I love POFQ but with me, spouse, and teenage dtr and son, it was getting old fast. Trying to make breakfast in a hotel room because I didn't want to spend an hour and $30-$40 in a restaurant in the morning, was trying. I would never have paid $500-$600 a night for a room, I purchased my DVC membership in 4 small contracts, 1 of which I've sold. I was looking to stay at a better quality of room with more amenities in a better location. When I discovered BWV so close to EPCOT, I was all in.

 

[stewart715]

It enhances my ability to visit WDW in the accommodations I want every single year. As opposed to every 3 years or so (or accommodations I don't really want to stay in every year). That's really what it boils down to (for me at least!).