Has anyone bought resale points to use for renting only?

[fairytalelover]

We have points directly through Disney at Poly but are thinking of buying resale at Saratoga or Bay Lake for the sole purpose of renting to use the cash to pay for our annual disney cruises. Has anyone done this? Any advice?

 

[BillPA]

I would check your math.

 

[fairytalelover]

I would check your math.

do you care to elaborate?

 

[Lynne M]

Given the cost of DCL cruises, that would be a lot of points.

 

[fairytalelover]

Then do people buy resale to rent out to use for anything like plane tickets, spending money etc.... or is it not worth it?

 

[Marionnette]

We have points directly through Disney at Poly but are thinking of buying resale at Saratoga or Bay Lake for the sole purpose of renting to use the cash to pay for our annual disney cruises. Has anyone done this? Any advice?

I agree with @BillPA. Check your math on that. Owners pretty much break even or even take a loss when they rent. Most do it because they have points that they are not going to use before the end of their UY, cannot bank them and don't have any friends/family interested going. They just want to mitigate their losses.

You pay a huge buy-in price plus closing costs for those points. That's money that could be invested and earn you a decent return. You also have to pay MFs every year. Those costs are ongoing and increase annually. It's unlikely that you would realize any significant "profit" over the life of the contract to make it worth the investment.

 

[Marionnette]

Then do people buy resale to rent out to use for anything like plane tickets, spending money etc.... or is it not worth it?

People buy resale because they want to prepay for their Disney vacations. They rent in order offset their costs when they cannot use the points themselves. I can think of a lot of ways to pay for airfare and spending money that do not require a huge investment of capital.

 

[supersnoop]

Two issues:

1. "Commercial use" is prohibited. Buying a contract specifically to rent out the points would likely be a violation of that contract.

2. The ROI of buying to rent is likely somewhere past 12 years, which is longer than most people would accept for an ROI. You'd be better off investing the money elsewhere.

 

[disneynutz]

If renting DVC reservations made financial sense, there would not be any contracts listed for sale, they would be bought up by people with deep pockets.

Bill

 

[fairytalelover]

buying points through resale for example at saratoga for about 200 points would be about $15,000 with dues only about $1120 per year. Seems to me that if the $15,000 is paid off in full at time of buying and we are only paying the annual dues, renting them out at about $13 per point would get us about $2600 which is little more than what our average round trip flights cost.

 

[mousehockey37]

buying points through resale for example at saratoga for about 200 points would be about $15,000 with dues only about $1120 per year. Seems to me that if the $15,000 is paid off in full at time of buying and we are only paying the annual dues, renting them out at about $13 per point would get us about $2600 which is little more than what our average round trip flights cost.

Math is still wrong. If you're making $2600 off of renting the points, subtract the MF's out of that, leaves you with around $1500. That's also IF you rent all the points out, and as others said, the MF's are going to continually increase. So you'll actual bring in less, unless you start renting points for more than $13.

ETA: Don't you also have to pay taxes on income like this?

 

[fairytalelover]

Two issues:

1. "Commercial use" is prohibited. Buying a contract specifically to rent out the points would likely be a violation of that contract.

2. The ROI of buying to rent is likely somewhere past 12 years, which is longer than most people would accept for an ROI. You'd be better off investing the money elsewhere.

Seems to me that if we rented it out only once a year then in 5 years we would get ROI. If we rent out twice a year it would be sooner. Again this is based upon buying about 200 points resale at saratoga for the average it's going for of about $15000.

 

[disneynutz]

buying points through resale for example at saratoga for about 200 points would be about $15,000 with dues only about $1120 per year. Seems to me that if the $15,000 is paid off in full at time of buying and we are only paying the annual dues, renting them out at about $13 per point would get us about $2600 which is little more than what our average round trip flights cost.

You paid 15k plus dues plus income tax, hoping that your SSR points will rent out. It may work, it may not. Like I said, there are reasons why everyone isn't doing it.

Bill

 

[fairytalelover]

You paid 15k plus dues plus income tax, hoping that your SSR points will rent out. It may work, it may not. Like I said, there are reasons why everyone isn't doing it.

Bill

from what I have been reading online and have been told by some people, it appears many people are actually doing this. Not specifically buying resale for renting out only but buying resale to add to their points to rent out to use for flights, spending money on vacation etc....

 

[dfisher9]

That's $75 a point (not including closing costs). If you get $13/point renting, that is a net of ~7.40/point after you pay dues. That puts ROI at just past 10 years if you rent every point and dues and renting cost never change.

 

[Marionnette]

from what I have been reading online and have been told by some people, it appears many people are actually doing this. Not specifically buying resale for renting out only but buying resale to add to their points to rent out to use for flights, spending money on vacation etc....

You need to do your own math, taking all the costs of ownership into consideration. If some people IRL are telling you that they are profiting enough by doing this to cover other vacation costs, then ask them to show you their numbers. I think they are using fuzzy math.

 

[disneynutz]

from what I have been reading online and have been told by some people, it appears many people are actually doing this. Not specifically buying resale for renting out only but buying resale to add to their points to rent out to use for flights, spending money on vacation etc....

Go for it and let us know how it works out. We have rented extra points in the past, sometimes it works out, sometimes it isn't worth the trouble. Rental brokers have caused the rental prices to increase but they take a cut and you still have to make the reservation for the renter. In addition you may be liable for any damages or room charges if the renter flakes, they are your guest in the eyes of Disney.

Bill

 

[supersnoop]

Seems to me that if we rented it out only once a year then in 5 years we would get ROI. If we rent out twice a year it would be sooner. Again this is based upon buying about 200 points resale at saratoga for the average it's going for of about $15000.

You're having a really hard time with the math. You can't rent out the same points twice.

If you rent points out for $13/point and dues are $5.50/point, then you make $7.50/point before taxes and ignoring increasing dues. To make back your $15,000 investment, you'd have to rent out 2,000 points, which is 10 years worth of points.

buying points through resale for example at saratoga for about 200 points would be about $15,000 with dues only about $1120 per year. Seems to me that if the $15,000 is paid off in full at time of buying and we are only paying the annual dues, renting them out at about $13 per point would get us about $2600 which is little more than what our average round trip flights cost.

Would you pay $15,000 up front plus $1,120 per year to get a $2,600 annual return? That doesn't sound like a good investment to me.

 

[DougEMG]

The people that bought points to rent out did so a number of years back when you could get loaded contracts for $50 per point. Renting out those loaded points brought the real rate of those contracts down to $33-$35 per point. At those prices it made sense. Resale prices are a lot higher today and I doubt there are many people buying resale for the purpose of renting only. I certainly wouldn't.

 

[_auroraborealis_]

Also,keep in mind that the rental income is taxable. It's not income-dues=profit.