Give me your 2 cents, DVC to make $

[dtheboys]

OK....I'm posting this question for a friend!! He wanted me to post the following question:


Hi,
I'm thinking of buying DVC, and never using it.....
I was going to pay cash for the points, no financing. Then my plan is to rent out the points every year. ( make resv. at Easter, or Christmas and then try and rent out that resv. dates)
Does anyone have a spreadsheet on this idea? I'm not an accountant, but I look at it as a chance to make a few bucks in the long run?
I was going to buy 150-200 points from a Timeshare store.
Tired of stocks, mutuals, and If I make any $ on my investments, I just pay more taxes on them.
Any comments, good or bad would help!!
Thanks
Greg


PS.....My cousin posted this question for me....He loves DVC, and uses every point he owns....He didn't even want me to post this qustion!!

 

[Chuck S]

Not something I would want to do. Those peak travel periods take so many points that folks will often get a "better deal" by using discount codes. If travel should take another downturn, or the economy take a nosedive you may not be able to find a renter. Plus the hassle of dealing with it, getting the deposit, making the ressie, making sure the renter pays the balance...not sometinhg I want to do on a regular basis. DVC should not be viewed as in "investment" but a pre-paid vacation plan.

 

[dcfromva]

(This doesn't sound like a controversial topic. )

Here are some random thoughts I had:

I believe it is against the rules stated in the contract to own points for the sole purpose of renting them out at a profit.

150-200 points would not give you many days during the highest point times. (Not enough to make a living).

Profit from renting points as a business would be subject to taxes. (I can't think of too many businesses who are exempt from taxes in the eyes of the IRS)

Renting is not risk free. Finding a renter and making appropriate reservations takes work and due diligence.

-DC

 

[disneyberry]

first of all, this is against the rules. even when bought by resale, the original sales contract terms/conditions still apply.

besides that, DVC should never be viewed as an investment.
there is risk that renting will not remain profitable.
and there is risk that resale value will not stay as high as it has been in past years. (resale prices are already lower than last year).

anyway, advice for Greg: "don't do it. if you do, not only are you breaking the rules, but you're sure to be flamed by people on these boards forever "

 

[PamOKW]

The documents from Disney contain boldface warnings that DVC should not be purchased as an investment and that no one should count on being able to make profitable rentals. They cite Disney's ability to compete as one reason it's not the best idea.

I wonder how your friend would run this business -- since that's what it would be? They need to consider the tax implications since it won't be pure profit on the rentals and they need to consider where they will get the renters from. It's instances like this that would be taking advantage of Pete's subsidizing of the Rental Board here. Someone like that should pay a fee to Pete if that's how they intend to get their customers.

 

[vernon]

There are people, or so I believe, that manage to make a turn on their investment, but it seems to me they have to indulge in what most people would consider distasteful practices ( i.e. finding mug punters that don't know the "real price" of renting points) they also seem to spend a lot of time trying to talk up the price of renting points so I'd guess they aren't making a big killing.

If one is prepared to spend a lot of time running around and prepared to put up with people dropping out of the transaction after you've booked the accomodation before they pay you then there may be a small profit to eke out of DVC, but I truly don't think the effort or time required is worth the $$ you earn. JMHO