Is Buying DVC worth it vs. Renting?

[Tbella]

Hi all! I've been trying to convince my husband to buy into DVC for years. I have rented points for our last 2 vacations and am going to rent points for next year as well. We plan to travel to Disney about once a year or every other year for a week. My husband doesn't see the costs benefit of buying when we are doing so good renting. He points out that the resale value will not be much after we are done using it (when our kids grow up, even though I plan to keep going with or without them) since the dvc point expire. Also the maintence fees seem to be expensive. When I calculated the maintence fees alone seem to be what I pay to rent points Sun-thurs. Please help me explain to my husband why owning is better than renting. Or is it?

 

[browniemtb]

Tough question......some are perfectly content on renting for their vacations. But when you own you have control over the points being used. Vacation planning may be a little easier. I'm sure there are a few others.....Not owning gives you no maint. fees to worry about and no push to travel to WDW every year or every other year.

To be honest renting vs owning is a toss up. Most comparisons have always been like this: "We travel to WDW every year and stay in a deluxe resort, should we buy DVC?" In most cases the $$ make sense to buy DVC. I do know renting can be a pain though and owning DVC will give you peace of mind and your own set of points as well as much more control and freedom.

 

[chalee94]

owning costs more up front, but maintenance fees are only $4.21 per point to about $5.00. if you can rent for about $5 a point, definitely keep renting...

owning gives you a little more control in some areas and less in others. if you're sure you want to go to wdw every year and can afford it, owning is cheaper overall, but renting ties up less cash.

 

[mgilmer]

I have a spreadsheet (excel) that breaks down the costs of renting vs buying. PM me your email and I will send it to you. I did not create it, but it is very good.

 

[ia466590]

But It says under 10 post newbies can't do pm's. Oh well I just made my offer on a resale today at SSR at $76 a point. Hope I get it.

 

[Tbella]

Thank you for your answers. Do people buy more points than they can use so that they may rent out the rest and recoup there maintence fees?

 

[chalee94]

Thank you for your answers. Do people buy more points than they can use so that they may rent out the rest and recoup there maintence fees?

a few may do it for the first year or two to offset some of the cost. i don't think many do it on a regular basis. for one, DVC actively discourages what they call "commercial renters" and two, it's really not that much of a profit after considering the hassle factor and the (small) risk that the renters might trash the room or run up charges that the owner would be responsible for.

 

[mjy]

It may become more of a necessity to purchase your own since renting is not so much a gamble or hazard for the renter but for the owner who rents. Especially since it is the owner, not the renter, who is responsible for damage, et cetera.

And, with the changes being made to the reservation system, and finding it harder and harder to get the reservation desired, more owners may be less likely to rent.

 

[ITGirl50]

We rented twice before we bought. The process of renting isn't that much fun. We now own and now planning for the trip is as much fun as actually going. I think it's kind-of like owning vs. renting your home. When you rent, you just live there. You can't change anything and it's not really yours. If you own, you can dream about the plans for your place. Of course, owning costs more than renting.

 

[bookswin]

The big advantage to buying is that in 30 years, when a Value room costs $400 plus tax (that's what it will be if we have about 5% inflation), you will have locked in at today's price.

Yes, your maintenance will also have quadrupled, but do the math.

 

[Brian Noble]

Using my preferred assumptions (purchase price amortized at 8% to account for cost of capital plus depreciation over the RTU period) a new purchase at SSR has an equivalent rental rate of a bit over $12 per point. A resale purchase at OKW is a shade under $10pp.

Interestingly, this pretty much covers the range of today's rental rates.

It appears to me that rental rates have gone up slightly more slowly than dues, but the dues basis is smaller, making that a wash.

The advantage of owning is that booking what you want, when you want it, is much simpler than renting. So, the total costs are pretty similar, but the convenience of owning could well be a compelling reason to buy.

The advantage of renting is that as your point needs fluctuate over time, it's possible to rent only exactly what you need, rather than buying enough to meet your maximum projected needs over time.

On balance, if I expected to be renting every year for the forseeable future, I'd go ahead and buy for the convenience of ownership.

 

[Tbella]

It seems that it mostly comes down to convenience. Also for me it is about owning and being apart of something Disney. I will continue to make my arguments to my husband and will use some of the information I learned from all of your helpful comments. Thank you all! I am also keeping my ears open for those rumored Contemporary timeshares.

 

[Brian Noble]

If you are the one finding the rental source, it's no wonder he doesn't see the big deal. Put him in charge of securing your next reservation, and see how quickly he comes around.

 

[Deb & Bill]

If you have a reliable member to rent your reservation from, renting should be fine. We've often thought the same as you. We joined in 1997 when points were much less expensive - we paid about $50 a point for our first contract. I'd never join now with points at $104 each. Even a resale can be nearly expensive with closing costs.

We've made some money on selling some of our contracts recently since we decided that we just didn't want to give Disney so much money every year in dues. True, a rental will cost more than the annual dues, but it doesn't seem like the cost of renting is increasing as fast as the price of points or as fast as dues increase.

 

[Tbella]

I know! I can't believe the $104 per point! I was contacted by a DVC salesperson this week selling Animal Kingdom at that amount with a minimum of 160 points. OUCH! I would rather find a BCV or BWV resale for $90 a point and I would be good with a start of 100 points. Also with the way the economy is going I am getting skittish about making a big purchase anytime soon. In fact I can't wait for my lease on my big and heavy SUV to run out!

 

[BluesBro]

I have rented twice, and found the process rather easy. The key was that we were flexible when we wanted to go and I requested pts 6-9 months in advance.

Since we are currently going to Disney every 3-4 years, renting makes the most sense for us.

If we get to a point where we can't secure a good rental or the rental prices skyrocket, we could consider buying.

 

[srenga]

I think it depends on the incentives offered at the time of purchace. We also rented before and just bought in June. We were able to buy Jambo and get $8 discount, developer and 08uy points. We payed cash and plan to rent out the points to bring our "net" cost down to about $78-79pp. We can then use 09uy points for trips starting next year. Per year, each point costs about $4 in lost interest and $5 in mf's for a net cost of about $9pp. So I figure I'm saving $1-2pp over renting and gain control of my reservation.

Of course the wildcard is $ tied up in the contract and how much could be recovered if forced to sell.

Anyway, that was "logic" I used to convince myself to buy-in.

 

[Tbella]

What are developer points? and the other incentives?

 

[srenga]

Not sure about the current offers, but typically if you buy a contract you will get developer points in an amout equal to your contract points. It's a one time deal, once the points are used there gone forever. They also must be used (or deposited in II) within one year on you contract purchase date. Also, currently only can book SSR with them.

 

[Tbella]

thank you srenga