Is Renting DVC Really THAT great of a deal?

[AC168]

I've been reading a lot of threads that encourage people to rent, and I get that renting DVC is often way better than paying rack rates through the Disney Hotel Portal, but isn't it an even MUCH better deal if you can buy the DVC points?

For example, last year I stayed at VGC for two nights in a Grand Villa and just did the following price calculations for staying for this upcoming year for two nights in the same time period:
1) I own so I divided my purchase price of points into years left (no account for time value of money) and then added the amount of money for points needed with corresponding management fee -- I got $4,800 or so in cost for two nights. The true cost is arguably a little higher because of the time value of money and that I got a good purchase, but many others before me had much better purchases.
2) I went to one of the rental sites and they quoted me $6,992.
3) I went through the Disney site and got $15,000 or so for a similar suite.

As a new resale owner, it looks clear that renting is better than going through the hotel portal, but if you are able to buy into the system, the system rewards points owners even more.

Thanks for any opinions. I just bought my first resale a couple of years ago and am thinking about buying another -- was going to go the rental route, but am thinking that I should just save and buy into the system a bit more.

 

[Sandisw]

Renting works for those that want to go every so often for a few years but not necessarily for long term.

Or if someone doesn’t want to worry about having to sell down the line.

But, for those that go regularly And want to continue then buying usually makes sense!!

 

[Noodlez]

This is very much a generalisation, but renting is great for people that aren't owners, but renting would never be cheaper than owning. If owners weren't making money the cost of rentals would increase!

Of course, there are individual circumstances, such as people needing to offload points quickly at less than market value, but there is no reason for owners to choose to rent at a loss. If the direct Disney price ever reduced enough that it was lower than the cost per year plus maintenance fees then people would stop buying DVC.

Of course it isn't for everyone, but I definitely wouldn't have bought if I know I could have rented or booked direct every year for less than what I paid!

 

[J-Dog]

I've been reading a lot of threads that encourage people to rent, and I get that renting DVC is often way better than paying rack rates through the Disney Hotel Portal, but isn't it an even MUCH better deal if you can buy the DVC points?

For example, last year I stayed at VGC for two nights in a Grand Villa and just did the following price calculations for staying for this upcoming year for two nights in the same time period:
1) I own so I divided my purchase price of points into years left (no account for time value of money) and then added the amount of money for points needed with corresponding management fee -- I got $4,800 or so in cost for two nights. The true cost is arguably a little higher because of the time value of money and that I got a good purchase, but many others before me had much better purchases.
2) I went to one of the rental sites and they quoted me $6,992.
3) I went through the Disney site and got $15,000 or so for a similar suite.

As a new resale owner, it looks clear that renting is better than going through the hotel portal, but if you are able to buy into the system, the system rewards points owners even more.

Thanks for any opinions. I just bought my first resale a couple of years ago and am thinking about buying another -- was going to go the rental route, but am thinking that I should just save and buy into the system a bit more.

I agree with your assessment, but I've always heard that renting is a great deal compared to rack rates, not compared to ownership. And your calculations support that.

 

[SleeplessInTO]

The lack of control over reservations means renting is too “expensive” for me. It’d have to be dirt cheap for me to be locked into a reservation under someone else’s control, and even then, I might just request the points be transferred so I can book it myself.

Buying all the way!

 

[MamaBelle4]

We rented points tbe first year we stayed on property.

We decided then to buy. It was probably $4000 to stay a week (I can't remember), and we bought our first SSR resale contract for $9k.

Of course you have the dues, etc that add on to that. But we've booked 3 week long 2 bedroom stays on those points so far. And we've got MANY years left, going every other year, to utilize those points.

So buying makes much more sense for us.

 

[Great3]

No, Renting isn't a good deal compared to buying, using for 10+ years, or even 3-5 years, and then selling. But buying isn't for everybody, so renting works for some.

But yes, the best deal is in buying if you can swing the upfront cost, which can be substantial and out of reach for many folks that are renting.

Great3

 

[Starport Seven-Five]

Renting is generally pitched as a better deal than booking rack rate.

With DVC being a front loaded purchase bought in today's dollars, you could probably make an argument for renting over buying. The buy in amount for DVC thrown in an index fund plus annual dues would probably more than fund DVC rentals going forward. Really splitting hairs there though and I'd assume most DVC owners have enough funds that a couple hundred dollars either way isn't going to matter.

 

[crisi]

There are some advantages to renting. You can usually find an owner with the home resort you want to stay at, so while DVC owners themselves are often locked out of BCV or VGF or where ever at (or shortly after) the seven month window, you have home resort advantage anywhere - that's a big deal.

Owning means tying up capital in points...which not everyone can afford to do. Some people are better off renting points and not tying up their capital

Since points expire, owners usually end up at Disney at least every other year. If you are an every year Disney person, owning makes sense, even if you are an every other year Disney person. If you want to go every three or four or five years, it really doesn't make sense to own - you could own and rent out points you aren't going to use, but your money usually does better in other vehicles.

Owning makes sense if you have bought into Disney as a long term vacation destination. There is no way I have the confidence in Disney as a corporation or destination right now to invest in future travel and we've been spending our travel dollars at other places.

 

[Genie+]

It depends on individual goals - which cover a vast spectrum of circumstances.

We only bought DVC recently (after many rentals and experiencing most WDW resorts), didn’t want to invest much long term, love staying at WDW park adjacent resorts, love the occasional trips in low cost room seasons, didn’t want our travel habits and spending to be overly-influenced by our contract purchase, and left room to rent or transfer in points for home resort advantage at resorts we don’t own during high demand weeks.

So our decision… we paid a higher average point cost per year for small contract at thee resort we’d always be content staying. Normally we book WDW 6-11 months out regardless. With current dues our BW works out to around $16pp over the rest of its 20yr life. We rented for $16pp last year. Maybe that owner bought in much cheaper a while ago and still turned a profit, but we’d be unable to do the same. Today I think $20pp rental is still a great value when it gets a preferred room, no commitments beyond that trip, and no lost time value of our money.

Some pros to our purchase- we can book 18 weeks out of the year Sun-Fri for 9 or 10 points per night, our cost $160/night or less that includes times of the year we love, Dec and May. That’s insane. We can enjoy the BW view rooms for 15-20pt/nt for most of the year while non-owners mostly have to settle for non-BWview at the same cost. We have more control than renting and now we can transfer in BC, GF, and Poly points if/when we need more points or different home resort advantage. We love the short contract. Just the right size to be used up by us and avoids the need to care about future price speculation. Don’t care. We are getting the resort we want at a very reasonable usage cost for our specific intents.

Some cons to our purchase- Higher cost per point/year than average, but otherwise would’ve been a compromise on either a different resale home resort or shelling out multiple times our initial investment with direct for a contract much longer than we’re comfortable. The smaller contract is harder to manage due to banking or borrowing for our typical trips, which could leave us with dangling points or trip scenarios with more holding or expiration risks. That is something I value about renting though, I don’t have to worry about potential point waste since renting is for exactly the points needed and the owner worries about the rest of the contract.

 

[Brian Noble]

isn't it an even MUCH better deal if you can buy the DVC points?

It’s better, but not that much better. The payoff window is very long on buying vs. renting. It does save money, but not right away because of the large up-front payment.

The short answer Is: Buying makes sense if you (a) plan to visit WDW at least once every two years for at least the next decade and probably longer, (b) prefer to stay in Deluxe resorts, sometimes book Moderates in a pinch, and rarely if ever would consider Values, and (c) the thought of staying off property gives you the heebedy-jeebedies.

Renting makes more sense if (a) is not true. If (b) is not true, then it’s hard to save money by either renting or buying, but you might be able to upgrade your lodging quality. If (c) is not true, then there are dozens of resorts within a stone’s throw of WDW borders that are as nice or nicer than DVC but cost much less.

 

[crisi]

Add to Brian - Buying DVC makes sense if you can operate within the restrictions of a timeshare. You can plan your trips well in advance, will cancel those trips with 30+ days notice, don't mind not having housekeeping, can live with a 4pm check in and no late check out, don't need a roll away, can live with a studio that has a pullout couch (a no go for my family - we always stayed in two bedroom units which wasn't exactly money saving) etc.- and are willing to do this trip after trip after trip. If you want to take short notice trips, then buying - and renting - probably doesn't make sense - but renting can make a little more sense since you can sometimes find an existing reservation to rent and some trips you can live with the pullout.

If you are expecting a hotel experience, neither renting nor buying make sense.

 

[disneyfan123]

I always thought we'd just rent because it was way cheaper than buying in, and we only went to Disney every few years, however, the steep increase in rental costs (last time we rented in 2018 it was around $17/18 per point, compared to $11 the first time I rented), plus the financial ability to pay for the purchase cost made it reasonable to buy in.

As others have mentioned, if you have the means, and you plan to stay in deluxe resorts at least every other year, buying DVC makes financial sense. If you only go every 3-5 years than renting will probably be better.

I'm just glad I've locked in my yearly costs (yes I know dues go up every year, but not nearly as much as rental rates) and I have the ability to make reservations on my own, without relying on third parties. As bad as the DVC site is, at least I can use it!

 

[glamdring269]

Former owner. We go every other year on average but decided when Covid hit to sell. I was concerned the economy was going to tank which ended up not being an issue (as it pertains to DVC pricing). But we did get into other issues that impacted borrowing points which is kind of a big deal to an every other year person.

Anyway, based on this we have decided to just stick with renting as it allows a nice advantage vs rack rate and owning for our particular preferences.

Of course if the dvc market tanks again like ~10 years ago then who knows.

 

[RoseGold]

VGC is an extreme outlier in DVC for pretty much anything.

Reality is that renting is mathematically better than buying for the more expensive point types. People don't like to hear this because they believe DVC is "saving" them or something.

Math is that buying Beach Club points is $17. Renting is maybe $20ish. That's definitely not enough mathematical premium to justify the risk and the outlay of five figures to hold this.

https://www.dvcresalemarket.com/blog/best-economical-dvc-resorts-to-purchase-spring-2022/

It's possible renting goes up, I believe it should. But until then, renting is a great mathematical choice.

 

[arich35]

Add to Brian - Buying DVC makes sense if you can operate within the restrictions of a timeshare. You can plan your trips well in advance, will cancel those trips with 30+ days notice, don't mind not having housekeeping, can live with a 4pm check in and no late check out, don't need a roll away, can live with a studio that has a pullout couch (a no go for my family - we always stayed in two bedroom units which wasn't exactly money saving) etc.- and are willing to do this trip after trip after trip. If you want to take short notice trips, then buying - and renting - probably doesn't make sense - but renting can make a little more sense since you can sometimes find an existing reservation to rent and some trips you can live with the pullout.

If you are expecting a hotel experience, neither renting nor buying make sense.

We just bought, and this really isn't our mindset. We know we want to go most years but I also know we can rent our points one year and actually make more than the dues and use that money towards a different trip for that year.

 

[crisi]

We just bought, and this really isn't our mindset. We know we want to go most years but I also know we can rent our points one year and actually make more than the dues and use that money towards a different trip for that year.

That will work, but as I said above, you would have likely done better renting points and investing the cash if you aren't going to use the points yourself. Renting your points out works, but the ROI on it isn't great. But that's the financial part of the decision, there are other factors, like being able to control your own reservation, wanting to say in a unit with a kitchen and washer and dryer on site, or wanting to stay in a room that allows you to shut a door between you and the kids. The last set you can do renting points, but having some control over your reservation is worth it to a lot of people.

 

[havoc315]

Value of renting points is highly variable depending on promotions and room type.

Renting points is often only a marginal savings comparing to booking a 1 BR unit, if there is a decent promotion.

Renting points is usually a very good savings on studios, but if they ever bring back free dining, and you're squeezing 4-5 adults into a studio... The value could start to get pretty close.

It's safe to say that renting points is almost always a savings and usually a significant savings compared to cash rooms --- BUT, you lose a lot of flexibility. A cash room can typically be booked just 1-3 months in advance, a cash room can be cancelled 30 days out without penalty. So the savings comes with a price -- The price is you are giving up a lot of flexibility.

 

[DVC Doctor]

For example, last year I stayed at VGC for two nights in a Grand Villa and just did the following price calculations for staying for this upcoming year for two nights in the same time period:
1) I own so I divided my purchase price of points into years left (no account for time value of money) and then added the amount of money for points needed with corresponding management fee -- I got $4,800 or so in cost for two nights. The true cost is arguably a little higher because of the time value of money and that I got a good purchase, but many others before me had much better purchases.
2) I went to one of the rental sites and they quoted me $6,992.
3) I went through the Disney site and got $15,000 or so for a similar suite.

Something is not right here....
VGC grand villa is between 94-224 points per night, depending on when you book
Annual dues is $7.50pp
Rental rates is between $17-20pp

Thus....
The cost per night for a member is $705-$1,680 per night - just for annual dues (ignoring purchase price)
If you add about $5 per point for purchase price depreciation ($200 buy / 40 years left) then the TRUE cost for members is about $1,175-$2,800 per night
The cost per night for rentals is $1,598-$4,480 per night

The rental site quoted you $6,992 = $3,496 per night (within the ranges above for a renter)
Disney quoted you $15,000 = $7,500 per night seems WAY OUT OF WACK

Who is paying $7,500 per night (checkin at 4pm and checkout at 11am) for only 19 hours for one night?

 

[AC168]

$2,400 per night is in your range. I said $4,800 for 2 nights. Resale is $260 ish now I should mention and not $200.
$3,496 per night is in your range as you say. (Though I think rental is closer to $20 - $22).
$7,500 per night is what was on Disney website to book a 3-bedroom suite. I don't know if it's as nice as a Grand Villa.