Has anyone bought resale points to use for renting only?

[fairytalelover]

I wholeheartedly agree. It needs to be looked at as an annuity payment. Compare it to a bond which will make more sense. Obviously, there is more risk than in a traditional bond, thus the higher ROR (rate of return) than what is being offered in the bond market currently. The ROR will depend on what you paid for the points, what you can rent them out for, and your MF's. Also, there is work involved with renting as opposed to a bond where you just get money sent to you because you purchased the bond. I have a finance background. It does yield a decent return if you mostly rent, but it is risky because Disney can change the rules at any time or start more strictly enforcing the "no commercial renting allowed" clause. Certainly don't go and buy a bunch of points counting on this. Some people do, but that is incredibly risky because of the aforementioned reasons.

Yes I hear what you are saying. I'm starting to understand now that it would not be a good move. Thinking maybe of putting the money we wanted to invest in buying more points in some kind of investment account and just make that our vacation fund to use for cruises, flights etc then use the points we have through disney for our resort stays. Not sure what kind of investment fund to put it in yet. We will meet with a financial advisor and see what they say. Any advice here?

 

[fairytalelover]

I figure its about 14 years if you account for time value of money since you are paying $15000 up front. For 14 years payback it was a conservative index fund. A more aggressive fund would make the payback even longer.

So yes people have bought to rent. Although i see better ways to earn money rather safely than in buying points to rent.

What type of aggressive funds would you suggest ?

 

[fairytalelover]

I think you have better sit down and think this through thoroughly. Your roi in math does not take into account dues. Also you cannot get 400 points every year with a 200 point contract. You can borrow in the first year to get 400 points but it will still take 8 years to get the 2000 points you need If you buy a contract with banked points. Glad you asked first for some advice.

Yes and I appreciate everyone's input. We just bought 400 points directly through disney in December and they gave us 40 extra points free. So we have a total of 440 at poly. We are very new to all of this and we are trying to understand how it works. The dvc rep who talked us into becoming a member made it sound like we could easily take our annual cruises and resort stays with our points. But that's not the case. In order to do that we would have to borrow from the next year then skip a year which we don't want to do. So we've been trying to figure out if we should just add more points. According to the points chart it takes an average of 675 points to take our 7 night cruises for the 3 of us. That's a lot which is why we thought we should buy more points through resale but then we were told that using points for cruises is a waste and we are better off renting out points and using cash. And that's what brought me to post this thread.

 

[KAT4DISNEY]

Of course, I bought my points to use, not rent, and commercial renting is not allowed, so that may cause some difficulties (albeit I have not heard of this being enforced).

I have, at least twice. And DVC forced one of them to sell.

I'd suspect it's been stopped more than those 2 times I've heard about.

 

[TexasChick123]

Yes and I appreciate everyone's input. We just bought 400 points directly through disney in December and they gave us 40 extra points free. So we have a total of 440 at poly. We are very new to all of this and we are trying to understand how it works. The dvc rep who talked us into becoming a member made it sound like we could easily take our annual cruises and resort stays with our points. But that's not the case. In order to do that we would have to borrow from the next year then skip a year which we don't want to do. So we've been trying to figure out if we should just add more points. According to the points chart it takes an average of 675 points to take our 7 night cruises for the 3 of us. That's a lot which is why we thought we should buy more points through resale but then we were told that using points for cruises is a waste and we are better off renting out points and using cash. And that's what brought me to post this thread.

Rent your Poly points out to pay for the cruise for just one year, and you'll make a profit. That's what most people do. We just paid for the cruise out-of-pocket and are going to Disney a few months before!!! Haha. We could've rented out our points to cover the cost, but we didn't.

Regarding good investments right now, I'm no longer in the best position to make recommendations on stocks/bonds/etc. because I'm now a criminal attorney who is currently taking a leave of absence to stay home with my kids while they are young.

 

[TexasChick123]

I have, at least twice. And DVC forced one of them to sell.

I'd suspect it's been stopped more than those 2 times I've heard about.

I know that the general rule of thumb is that you cannot do more than 20 rentals per year per contract without triggering an investigation by Disney and that you need to use those points at least some of the time. If you own two contracts, it might be wise to go back and forth between the two if you are going to rent some of the time. Again, this is just the current rule which could change at any time.

 

[Brian Noble]

The ROI is modest and even using a broker it can be significant work. There is also significant downside risk in the event of a travel slump. Given the current unsettled political climate and its impact on international tourism, this isn't a path I'd personally start down right now.

 

[disneynutz]

Yes and I appreciate everyone's input. We just bought 400 points directly through disney in December and they gave us 40 extra points free. So we have a total of 440 at poly. We are very new to all of this and we are trying to understand how it works. The dvc rep who talked us into becoming a member made it sound like we could easily take our annual cruises and resort stays with our points. But that's not the case. In order to do that we would have to borrow from the next year then skip a year which we don't want to do. So we've been trying to figure out if we should just add more points. According to the points chart it takes an average of 675 points to take our 7 night cruises for the 3 of us. That's a lot which is why we thought we should buy more points through resale but then we were told that using points for cruises is a waste and we are better off renting out points and using cash. And that's what brought me to post this thread.

Disney will tell you that you can use your points for all kinds of magical vacations all over the world, technically you can but you can also use $100 bills to light your fireplace. Use your points for DVC resort stays only for the best value. DVC will teach you that what you loved about Disney being a different kind of company isn't true, all they want is your money and they will walk the gray line to get it.

DVC has had issues in the past with resort rooms needing better maintenance and cleanings, some long MS phone hold times, and even a legal issue with Aulani which resulted in the head of DVC and other executives getting terminated.

If you had purchased within the 10 day grace period, I would recommend that you rescind your contract and start over but that is off the table.
Another item is that you have a 400 point contract which may be difficult to sell, you could have bought 2 - 200 point contracts or 4 - 100 point contracts. Learning the ins and outs of DVC is an eye opener but it can save you some money on your room.

Bill

 

[Wakey]

I wouldn't say there is much work in renting if using a broker. Basically all you have to do is book it, and if necessary add magical express or dining plan. A 10 minute job. The money is paid to PayPal, you press 1 button to transfer to your bank, and enter the transfer amount, then click proceed- a 2 minute job.

 

[fairytalelover]

Disney will tell you that you can use your points for all kinds of magical vacations all over the world, technically you can but you can also use $100 bills to light your fireplace. Use your points for DVC resort stays only for the best value. DVC will teach you that what you loved about Disney being a different kind of company isn't true, all they want is your money and they will walk the gray line to get it.

DVC has had issues in the past with resort rooms needing better maintenance and cleanings, some long MS phone hold times, and even a legal issue with Aulani which resulted in the head of DVC and other executives getting terminated.

If you had purchased within the 10 day grace period, I would recommend that you rescind your contract and start over but that is off the table.
Another item is that you have a 400 point contract which may be difficult to sell, you could have bought 2 - 200 point contracts or 4 - 100 point contracts. Learning the ins and outs of DVC is an eye opener but it can save you some money on your room.

Bill

what legal issues did they have with aulani?

 

[disneynutz]

what legal issues did they have with aulani?

DVD set the dues too low and reportedly they were caught by the State of Hawaii. It resulted in Disney/Aulani getting their sales registrations pulled in many States, when sales started again, Disney agreed to cover the difference in the new dues rate with existing owners for the life of the contract.

IMO they set the dues low to help with sales, also IMO BLT was also set low. Since then the new management, (this is our 2nd since Aulani) seems to be setting the dues for new resorts much higher.

Bill

 

[Dean]

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?

It sometimes makes sense to buy to rent but generally only on a short term or limited basis. Maybe you only need 100 and buy 150 or you need a 1 BR now but a 2 BR in a few years and have extra points. Or maybe you buy a contract that has a lot of points you need to dispose of. To do it as a financial investment alone is a poor choice. For a relatively high risk investment, which DVC is, I'd want a return of principle over no more than 10 years AND a ROI of 12-20% for this type of plan. About the best you could do would be return of principle over 10 years after taxes.