# Has anyone compared owning points to renting points?

Discussion in 'Purchasing DVC' started by invalid_char, Feb 12, 2004.

1. ### invalid_charMouseketeer

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I know a lot of number crunching has been done which shows the cost savings of owning DVC vs. staying in the deluxes. I'm wondering if anyone has done a comparison between owning points and renting points on a regular basis.

Here is a very simplistic example:

We own 500 points. I think we paid on average \$74 per point or \$37000. Say our dues are 4.25 per point or \$2125 annually.

Now let's say we can rent 500 points per year at \$9.50 per point. for an annual cost of \$4750. This means that, this year, we save \$2625 by owning as opposed to renting. Even assuming that dues will never go up, which they will, it would take us 37000/2625 or over 14 years to make back our initial investment. And, as I've come to realize, dues continue to go up but the cost of renting seems to remain static at between \$9 and \$10 per point. So really, the cost savings should decrease every year. I haven't done the calculation, but I have to imagine that if you factored in the inevitable increase in dues, it would take quite a lot longer than 14 years to make back your money.

Also, if you are renting, you already have your money. There is no risk or worries that Disney will deteriorate in the future and you will not be able to sell and get your money back.

It seems that any anxiety over renting could be mitigated by keeping a small account open to which you can have points transferred from other members.

Anyway, has anyone ever pursued this line of thinking and what made you buy instead of rent or vice versa.

Thanks!

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Some corrections to your thinking may be needed here.

Within the last 3 years- points could be readily rented in the \$6-7 range. To assume that \$9-10 is a static number may not have much basis.

The assumption that points can always be rented (at any price) may not have much basis either. The rental of DVC reservations is governed by supply and demand. If there is an increase in the number of people wanting to rent points, the cost of that rental may well increase - and if the number of members wanting to rent increases faster than the number of potential renters- then the cost could even decrease.

While you may have been able to rent 500 points at \$9.50 each this year, there is no guarantee that many points (at that price) will be available next year or any time in the future. With your DVC membership- you are guaranteed a fixed number of points each year- currently costing \$3.69- \$4.37 each.

Many members feel they have already reached a break even point with their DVC expenses- so the annual fee is their only cost. Thus renting- even at \$9.50- is far more costly than what they now enjoy.

4. ### WDWorld2003DIS VeteranDVC Gold

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Also, you can always sell your points at the market value and make back some or all of your initial investment (at least at this point in time).

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Iwas reading your reply and for me the simple answer would be to divde your point plan into the cost to give you costs plus the anual fees so i would have to say they are around 6-8 dollars. My other thoughs would be you have something to sell that will apprecaite slowly . Dont know what others factors there might be. I would be interested.

6. ### Jimbo6 AM and already the boy ain't right.<br><font col

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Another thing to consider is that renting is kind of easy because of the Rent/Trade Board on this site. But if Pete decided to shut that board down for any reason - perhaps under pressure from Disney - then what would you do? If your source for points turns into eBay auctions, you can expect the price to go up.

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Well i didnt read the entire 1st post but if you bought an plan with 220 and 220 bank like i did sold off 400 points reciceced 4k reducing my cost to 10k,I have visted 4 times. Its not to bad.
I guess if you sold off your points for 5-7 years it would cost you nothing for the plan but dues at 600 a year whinch is half a week at a hotel.

???

8. ### invalid_charMouseketeer

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Here are my thoughts:
The fact that points are readily available at \$6-\$7 makes renting even more compelling doesn't it?

500* \$6 = 3000 (rental cost)
500* \$4.25 = 2125 (dues)

owning then only saves me a negligible \$875, a savings that could easily be erased if dues go up.

While I agree that there is no guarantee that points will be available, there does seem to me to be a very active market.

While I respect this sentiment, and believe me I love my DVC too, I'm trying to make the wisest decision with my money going forward.

Actually, if this ever happened, it would hurt owners just as much as renters. Heck, I'd open up my own site and die a very rich woman!

Anyway, I hope people can see that I'm playing devil's advocate here. The whole Comcast thing is making my mind wander!

Thanks everyone for your feedback. I hope more people respond!

9. ### WDWorld2003DIS VeteranDVC Gold

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I'm just speculating and I would never want to rent out all of our points, but there are those that do make a business of it (when I talked to resellers they stated there were several people who buy points just to sell)

If you bought 300 points at \$74/pt. = \$22,200

Current dues would be approx. = \$1,245.

Without taking inflation into account (and I know you have to but I'm just using current prices as an example) in 10 years you would have paid \$12,450 in dues + \$22,200 for your initial investment = \$34,650.

You could rent your points for 10 years at \$10/pt. (fairly easy to get) - 3000 pts. X \$10.00 = \$30,000. A difference of \$3,650.......

Now, hopefully, at that point in time you could sell your DVC for at least \$50.00 point (possibly more) = \$15,000 minus \$2,000 (for brokerage fees) and you would be \$9,350 ahead - much better than my 401K the last few years! If there was no longer a viable market for DVC then the above would not be true and you would be better off renting.

I do see your point.... ... the above is how how we justified our purchase. We're hoping we made the right decision instead of just renting points.... only time will tell.

10. ### rigginsYou can't always get what you want, but if you try

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I rented twice before we bought . . . once for \$10/point and once for \$9/point. At first, I thought renting was the way to go. Then as the frequency of our trips increased, I started doing some basic math. We had taken 3 trips in 19 months and spent \$2322 renting points and \$2130 on a CRO reservation- \$4452 total. So, with what I spent on those three trips, I could have paid for 1/3 of my initial 200 point purchase. I felt like I was going to sink \$15K into Disney trips whether I bought DVC or not. So, like Doc said, I view our initial investment as money spent in order to get to a point where we stay at the price of dues only.

However, for me, the more compelling reasons not to "just rent" is that it can really be a hassle. Here's some thoughts:
• If you want to get reservations at a busy time, you need the 11 month window just like a DVC member. If you are booking that far in advance, you're going to pay \$10/point. While the \$6-7 dollar deals exist, you don't get them when you need them.
• While both of my renting situations worked wonderfully, you always risk someone not making the reservation or cancelling it or stealing your money or whatever. Personally, I want to save a lot if I'm going to have to deal with this concern.
• If you're not a member, you can't check availability. So, you have to have your renter check for you. If you are considering multiple dates and/or different accomadations, this can be a pain.
• Also, when you are renting, you need to play the CRO vs. Renting game everytime to make sure you're getting a good deal. The time I rented at \$10/point, it was peak season and CRO had no discounts. In this case, \$10 was a bargain. However, the time I rented for \$9, it was value season and there were discount codes. So, I wouldn't have paid more than \$9 because I could have done better direct through Disney. So, if you want to be a renter, you also need to be a CRO code watcher.
• If you rent, you cannot change your plans. If I book a trip 6 months out and something comes up 3 months before the trip and I want to cancel, the renter is probably not going to be very accomodating. While owning certainly has limitations on changes and cancellations, you are at least in control. When you rent points and send the money, you're locked in. You could certainly try to work with your renter or re-rent the reservation, but who wants that hassle. Now, I know the rules, make a decision, and call MS.

So, to sum it up, being a renter can be a hassle. Personally, it would have to cost much less than owning for it be worthwhile.

Leslie

11. ### JJ721Next year for sure....

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As the cost of accomodations at comparable disney resorts increase, wouldn't it be logical to assume that the cost per rental pont would increase also? For example, if five years from now the cost to stay at GF increases, say 20%, wouldn't \$10/point look like an even better deal? Accordingly, the demand for points at \$10 would go up, supply (at \$10) drops, and price increases.

I agree with Doc. Assuming everything else is equal, this looks like a classic economics 101 case study

12. ### childsplayDIS Veteran

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Right, and you own the contract for another 38 (50 at SSR)......
That's 24 years on the plus side by my calculations

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As many people have demonstrated in the above posts, you can use hypothetical numbers to prove anything you want. Since we don't know what dues or room rates will be in 10 or 20 years, it's easy to make up numbers to prove a point. ( and kind of fun too! ) I think we'll have to wait until we either sell DVC or the contract expires to definitively figure out if we got a "deal" or not.

14. ### invalid_charMouseketeer

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No, I would not assume that this is the case and I believe that, historically, it has not been true. As far as supply and demand are concerned, it would seem that as they add more DVC resorts and supply increases, that the rental cost will go down, not up. As Doc indicated, over the last few years the cost of renting points has actually decreased.

I agree that you can't count on getting \$6 to \$7 per point. But I disagree that you will necessarily pay \$10. In fact, if you are buying a large block, the seller will often give you a discount.

As I said in my original post, I would maintain a very small account (maybe 25 or 50 points) just so points could be transferred into my name and so I could maintain control and check times, etc... I'm not sure what the rules are on transferred points but I believe I would have some cancellation flexibility, depending on the circumstances.

I think being able to take advantage of any super deals Disney has is an advantage not a disadvantage. I mean, how hard is it to look on mousesavers.com and look at the current discount codes?Probably a lot less of a hassle than getting involved in banking and borrowing and trying to keep track of how many points you own, etc. etc.

Anyway, the hassle factor is the most compelling argument for owning, but owning can be a hassle too when you consider the time invested in tracking and manipulating points and worrying about dues increases and the future of Disney.

Well, I'm still playing devil's advocate, someone prove me wrong!

15. ### DrTomorrowYour Disney friend from the Future!<br><font color

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I appreciate your investigation and research, invalid_char, but there are simply too many unknowns to yield a valid proof / disproof. Not only are there all the financial factors already mentioned, but some intangibles as well:

1. Demand. In 20 years, will Disney's "magic" begin to wane, or will there be a renewed interest in "pixie dust" and "Main Street USA"?

2. Supply. Disney continues to build new DVC resorts, keeping supply growing. What about when the last DVC resort is built - will DVC rental points become a more scarce commodity?

3. Aging of the DVC ownership. Currently, enough people want to experience other non-DVC vacations, and rent out their points to fund them. Might this change as the owners age and perhaps value DVC a bit more?

We "ran the numbers" last fall ere we bought into SSR, but it was the "annual trip(s) at WDW Deluxe vs. buying into DVC" question. DW and I couldn't deal with the uncertainty and hassle of renting - it's just not 'us'; we are plan-ahead folks.

16. ### rocketriterDIS Veteran

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Something I'm not finding in this discussion: are there any tax implications to renting a large number of points? If there are circumstances where the Fed and the State can take income tax, the other calculations change dramatically.

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It would appear that my point was missed. Three years ago- you could easily rent points for \$6-7 per point. Now the price is closer to \$10 to rent those points. I would find the assumption that \$9-10 is a static price incorrect just based on the past 3 years experience. Rentals for \$6 per point are very rare at this time.

Rental costs have already outpaced dues increases during that same time period.

The premise proposed is based on a static rental price and rising fees for members- the both should be expected and only the rate of increase is the unknown.

Good luck making your decisions- just be sure to consider all of the variables to reach your decision.

18. ### invalid_charMouseketeer

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Doc, thank you and I apologize if I misinterpreted your original response.

I still feel; however, that rental points have historically remained pretty close to \$10 per point. Yes, there are times when they are sold for more and yes there are times when they have sold for less. But I do not see an overall consistent trend for rental price appreciation so I do not expect it in the future. On the other hand, I have seen a consistent trend toward dues going up over time and, considering the very real possibility that Comcast will own Disney, and considering the way that Comcast treats customers who are 'locked in', I am not very encouraged that the overall cost of a DVC vacation will not increase somehow.

But, as an earlier poster said, the correct decision will only be known for certain in hindsight. This is just my view of the probabilities.

19. ### Desnik<font color=teal>I actually love packing and plann

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invalid_char
DH and I recently went through this same thought process. We rented last year and have been contimplating buying into DVC for a few years now. I don't want another monthly payment and don't have the cash to buy points right now. That is part of the reason we haven't bought.

I think the decision has to be based on the individual. Here are the reasons we feel it isn't worth it for us to buy and continue to rent.
-We have a person we trust to rent points from and we feel comfortable renting from someone on these boards using paypal.
-We usually vacation in Nov. Sun-Fri. and only need 45-60 points. We stay somewhere else on the weekends.
-the points for the weekend are too high and if we owned we would probably never use them for the weekend.
-Right now a studio suits as just fine.
-No monthly payments or dues
-When renting we receive the same DVC discounts and treatment as a member.
-We like to stay at Deluxe resorts sometimes. If we owned I wouldn't be able to justify the waste of points to stay at a deluxe vs. the villas.
-DH won't fly so the other vacation destinations DVC offers do us no good.

So for now for us we will continue to rent and not buy.

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The \$10 pricing has happened within the past year. As I've tried to make clear, apparently without ANY success, as recently as three years ago, \$6-7 per point was the prevailing price on our Rent/Trade Board. Perhaps your \$10 figure comes from a source of which I'm unaware. There has been no consistent "historical" price and to suggest a premise based on that imaginary price is inherently flawed.

Good luck with the plan.

21. ### DrTomorrowYour Disney friend from the Future!<br><font color

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That does change things, if true; no offense, but I'd personally be very surprised to learn that one could rent OKW points for anywhere near \$10 / point in 1991 or 1992. I though I'd read here that they were closer to \$5 / point or so. And if they've doubled in the last 10 years, what might they do in the next 10?
Sincerely, I wish you luck in your decision; I'm just Devil's Advocating to make sure you don't end up in a "Garbage In, Garbage Out" situation re: your analysis.