Is Renting DVC Really THAT great of a deal?

[Starport Seven-Five]

I like stability, honestly ….

There is nothing stable about this market, our economy, ….

So like I said No thank you!

You should look at what point renters went through in 2020…

 

[RoseGold]

I saw a bunch of points for $19 for rent the other day and thought of this thread. In a world with $19 points, renting is the smarter choice mathematically.

It has other downsides, for sure, but this is math.

 

[AC168]

I saw a bunch of points for $19 for rent the other day and thought of this thread. In a world with $19 points, renting is the smarter choice mathematically.

It has other downsides, for sure, but this is math.

Please do math for me on this. I’m about to add another contract and don’t see this, but would be curious how you got $19 renting to be smarter choice.

The one thing that has come to mind separately is renting can get u in at 11 months at other resorts.

 

[Robbie Cottam]

You should look at what point renters went through in 2020…

How so?

I had a lot of points rented in 2020!

Every one of my renters got re-accommodated …

 

[Starport Seven-Five]

How so?

I had a lot of points rented in 2020!

Every one of my renters got re-accommodated …

I would have to look through old threads to remember all the details. My memory is that people who rented through sites like David's were struggling to get refunds.

This was David's message on March 16th, 2020:

A Message to our guests and owners
We understand the severe impact that the COVID-19 virus is having.

Here is what we hope to accomplish over the next few days (maybe weeks).

If you are a guest, please wait for us to contact you. We will work with your owner to verify point status and then contact you with available options. This could be a rebooked reservation, points for a future reservation, or possibly a refund dependent on the owner’s current financial status. We may, in some circumstances, be able to re-rent points to allow for a refund situation. Each case will have its own set of variables. We promise to do everything we can to ease this unprecedented situation.

If you are an owner, please wait for us to contact you. We ask that you put your contract with the guest aside and work from your heart. Let your conscience be your guide. Depending on the status of your points, we will ask you to rebook the reservation, offer the points for a future reservation, offer a refund of the monies sent to you if you are financially able to, and let us re-rent your points. We do not intend to leave any owner "holding the bag."

Our commitment to you is as follows;

We will be in contact with each and every owner
&
We will be in contact with each and every guest

Due to this unprecedented situation, we are not equipped with the resources to do this in our usual timely fashion. It may take weeks to sift through all of the cancelled reservations. Yet, we remain committed to replying to each message we receive. We ask that you don’t send more than one email; every email sent takes resources away to sort through. Abusive language will not be tolerated.

Thank you for your support and your loyalty. We will keep you updated throughout this dynamic situation as events unfold.

https://www.disboards.com/threads/davids-dvc-rental-reimbursement-or-rescheduling.3796922/

 

[RoseGold]

Please do math for me on this. I’m about to add another contract and don’t see this, but would be curious how you got $19 renting to be smarter choice.

The one thing that has come to mind separately is renting can get u in at 11 months at other resorts.

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

This is why. This math has some limitations, like linear depreciation. But assuming it's in the ballpark, why would you buy $14, $15, $17 points and lock up five figures and take on the risks of owning when you can just rent for $19?

Add in the cost of financing, and renting is a total no-brainer to me.

And yes, renting can have some upside, like skip a year, change resorts, do it big this year. Renting does also have risk and downside, as does ownership.

 

[Robbie Cottam]

I would have to look through old threads to remember all the details. My memory is that people who rented through sites like David's were struggling to get refunds.

This was David's message on March 16th, 2020:



https://www.disboards.com/threads/davids-dvc-rental-reimbursement-or-rescheduling.3796922/

Sounds like a good reason not to work with a broker…. Like I said, all my renters were taken care of !

 

[zavandor]

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.

Very sad and very true.
I wouldn't buy DVC right now for two reasons. One is the buy in cost, which would be nearly 3 times what I paid ( because of increased resale costs and stronger USD against the Euro and GBP).
The second is that I'm not so sure I want to go twice every 3 years like in the past. I've already switched to every other year and I might do longer pauses. I'm not selling yet, maybe it's just momentary and I'll get excited again. If I sell I'll lose all my perks as a long time resale buyers (blue card, unrestricted points) and no chance I'd pay direct prices to get those back. So I rent excess points and wait.

 

[Robbie Cottam]

Very sad and very true.
I wouldn't buy DVC right now for two reasons. One is the buy in cost, which would be nearly 3 times what I paid ( because of increased resale costs and stronger USD against the Euro and GBP).
The second is that I'm not so sure I want to go twice every 3 years like in the past. I've already switched to every other year and I might do longer pauses. I'm not selling yet, maybe it's just momentary and I'll get excited again. If I sell I'll lose all my perks as a long time resale buyers (blue card, unrestricted points) and no chance I'd pay direct prices to get those back. So I rent excess points and wait.

I really want POLY tower, HOWEVER, I would NOT buy any more DVC unless and until Management remembers that DVC is a long term relationship with their GUESTS. NOT A GET RICH QUICK SCEEM!!!

That includes bring back annual passes and a park reservation system that protects DVC guests / on property guests…..

Or returns to pre covid Rules ….

As well as dinning plans and other perks ….

I don’t mind paying more (fair price) for an annual pass and the dinning plan, but without these two resources adding another 9 days vacation at Disney per year is not an option.

Too bad too because I’m really starting to like the poly tower design

 

[taaren]

I was 5 minutes from purchasing resale in early 2020 and I am so glad I didn't. If I want to go to WDW and stay on property again (unlikely at this time) I can pay cash or rent points from one of you! However, now I don't have a costly timeshare to manage in a place that I do not care to visit in the foreseeable future.

My coworker, who I gave the Disney bug to, owns and has been very successful in managing his points and having fantastic vacations. Owning has absolutely worked for him.

It comes down to more than a math problem and everyone has to do their own calculations.

Just wanted to second this. I'm currently working on transferring one of my contracts into a living trust so that my former DH won't be the owner if I pass, since he wouldn't get a good value out of it.

The main reason I want the person to take it over that I do if the worst should happen is because she would manage the contract in a way to get a great amount of value out of it. When I thought about just leaving it to my DS, he's scattered like former DH and wouldn't have great vacations because they'd forget to book or would forget to bank and end up using it as reservation points at a Disney hotel at the last minute, (his dad did this a few times since the split) so he'd be better off selling the contract and using the cash to take trips whenever or wherever he wanted (which would probably still be a lot of Disney). So I asked him if he'd rather I leave it to his cousin would would maximize the value and invite him on really great trips, since my intention for the contract is for my family to continue to have a great time, even if not I'm around. I went through a list of family and friends before settling on an individual that I thought would create great memories for my kids and would also enjoy the process of booking and optimizing those points. That is a large part of the value, because your strategy in using the points does affect how much bang for your buck you get out of each point. If you don't want to manage it, or only want to pay very little attention, the math trends downwards very quickly.

 

[crisi]

Very sad and very true.
I wouldn't buy DVC right now for two reasons. One is the buy in cost, which would be nearly 3 times what I paid ( because of increased resale costs and stronger USD against the Euro and GBP).
The second is that I'm not so sure I want to go twice every 3 years like in the past. I've already switched to every other year and I might do longer pauses. I'm not selling yet, maybe it's just momentary and I'll get excited again. If I sell I'll lose all my perks as a long time resale buyers (blue card, unrestricted points) and no chance I'd pay direct prices to get those back. So I rent excess points and wait.

We've used our points for Aulani (which was OK, but the fantasy Hawaii in Hawaii wasn't our thing) and HHI in the Winter which we enjoy. Because we never had a ton of points we can do every other year in a one bedroom at one of those locations for a week plus. Both Aulani and Hilton Head are hotel rooms at destinations we enjoy with pools where the Disney bubble isn't quite as bubbly (especially Hilton Head). But we bought in 2000 and the dues aren't a hardship - so its easy to either use them at an offsite location - or rent them for enough cash to make it worthwhile.

 

[BrianLo]

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

This is why. This math has some limitations, like linear depreciation. But assuming it's in the ballpark, why would you buy $14, $15, $17 points and lock up five figures and take on the risks of owning when you can just rent for $19?

Add in the cost of financing, and renting is a total no-brainer to me.

And yes, renting can have some upside, like skip a year, change resorts, do it big this year. Renting does also have risk and downside, as does ownership.

I do think you are largely correct, with a few slight caveats;

Under the assumption that one holds the contract towards complete expiration and there is therefore no value left on it. Most applicable to 19 year contracts (if one is buying now the price per point certainly has to start decreasing at some point), less applicable to mid 40's year residual contracts, that almost certainly can be sold for a similar resale price (historically up to significantly more) in 19 years.

You are also not accounting for rental prices scaling upwards that have thus far strongly outpaced maintenance fees. Per point rental prices are up several dollars over the last few years alone. That's probably a lot to depend on short term, but again I'm confident a rental price per point in 20 years will be significantly higher than today.

The line in the sand you point out is exactly what I agree with though. The math rapidly falls apart when one considers a purchase for anything below a OKW Extended on that DVC Resale Market list. Coincidentally that lines up well with 2042 resorts are a niche resale purchase decision these days that requires a lot more of an emotional purchase than a truly sensible one. The one oddity being Grand Cal, I think people also slightly lost their mind with, considering resale prices went from 150 to 300 on that resort from 2019-2021.

 

[BeachClub2014]

I do think you are largely correct, with a few slight caveats;

Under the assumption that one holds the contract towards complete expiration and there is therefore no value left on it. Most applicable to 19 year contracts (if one is buying now the price per point certainly has to start decreasing at some point), less applicable to mid 40's year residual contracts, that almost certainly can be sold for a similar resale price (historically up to significantly more) in 19 years.

You are also not accounting for rental prices scaling upwards that have thus far strongly outpaced maintenance fees. Per point rental prices are up several dollars over the last few years alone. That's probably a lot to depend on short term, but again I'm confident a rental price per point in 20 years will be significantly higher than today.

The line in the sand you point out is exactly what I agree with though. The math rapidly falls apart when one considers a purchase for anything below a OKW Extended on that DVC Resale Market list. Coincidentally that lines up well with 2042 resorts are a niche resale purchase decision these days that requires a lot more of an emotional purchase than a truly sensible one. The one oddity being Grand Cal, I think people also slightly lost their mind with, considering resale prices went from 150 to 300 on that resort from 2019-2021.

I think this really depends on what you pay for the resale of a 2042 resort. There are deals to be had that keep the annualized cost far enough below rental rates to make owning them worthwhile.

 

[crisi]

Sounds like a good reason not to work with a broker…. Like I said, all my renters were taken care of !

Which is one of the reasons owning is also a huge risk. That was a nightmare for both renters and owners - not everyone - on either side - ended up whole. When owners say "I can just rent my points" they need to understand that if something like that happens, they will have to decide if they make renters whole, and take the risk of losing points themselves, or not. Losing points as an owner is one of the ways that can really impact any sort of "saving money" analysis - I have yet to see a model for "and 5% of the time we loose points because we rent out and they cancel without paying the second half, or we book a Grand Villa to bring family and they back out or Dad had a heart attack and we couldn't go." Its one of the arguments for booking through CRO and paying cash and not bothering with DVC at all.

 

[Robbie Cottam]

Which is one of the reasons owning is also a huge risk. That was a nightmare for both renters and owners - not everyone - on either side - ended up whole. When owners say "I can just rent my points" they need to understand that if something like that happens, they will have to decide if they make renters whole, and take the risk of losing points themselves, or not. Losing points as an owner is one of the ways that can really impact any sort of "saving money" analysis - I have yet to see a model for "and 5% of the time we loose points because we rent out and they cancel without paying the second half, or we book a Grand Villa to bring family and they back out or Dad had a heart attack and we couldn't go." Its one of the arguments for booking through CRO and paying cash and not bothering with DVC at all.

You are completely correct!

The next time there is a once in a hundred years event, someone might not come out whole.

Look at all the old people in New York that came thought COVID DEAD!

DVC take some work to manage on the owners part. Renting also requires you to stand your ground and know your worth.

when renting DVC you have to get paid at time of booking. If your are doing half now half later, well you have invited the risk.

You are selling a perishable item.

I will tempt fate by saying In 16 years I have never lost a point.

Like I said all may renters where taken care of during COVID….. yes it took some work on my part.

No I did not lose money.

Maybe you are to busy to manage your assets effectively?

 

[crisi]

You are completely correct!

The next time there is a once in a hundred years event, someone might not come out whole.

Look at all the old people in New York that came thought COVID DEAD!

DVC take some work to manage on the owners part. Renting also requires you to stand your ground and know your worth.

when renting DVC you have to get paid at time of booking. If your are doing half now half later, well you have invited the risk.

You are selling a perishable item.

I will tempt fate by saying In 16 years I have never lost a point.

Like I said all may renters where taken care of during COVID….. yes it took some work on my part.

No I did not lose money.

Maybe you are to busy to manage your assets effectively?

Good for you to not lose points or money. But it happens at a smaller scale all the time to other people. You rent out your points and ask for half up front and half at 30 days (which isn't smart because you need to cancel by 30 days, but its pretty standard for people to do.) At 30 days you don't get the other half of the payment, or you get an email "Please don't cancel, I'll have the money to you Thursday." On Thursday you get ghosted and have half the money and a reservation with points that will go into holding at the end of your use year. Yeah, you can manage around all of that - don't rent out at the end of the use year, and get your money 45 days out so you can cancel with room to spare. Don't borrow for rentals. But not everyone does. (If I were to rent privately, and when I rent I use a broker, I would get my money up front like you do. I'm also a mean, mean person and wouldn't be switching reservations - you get trip insurance because it ISN'T my problem. Usually when I state this here, I'm mean, but this is why I use a broker. I don't want to deal with people's sob stories and emergencies - I've had enough of them in my own life).

Same thing on the rental end - you rent points for a trip you know you are going to take and some sort of event happens so you can't take the trip. You should have insured it, but you didn't, and now you have a reservation that starts in six days that is paid in full that you can't take. Out the money. Unless the person you rented from is much kinder than you or I and CAN do something about it.

But I manage my assets just fine, thank you very much. Retired at 45. Of course, DVC isn't an asset for me any more than any of the vacations I take are assets and I certainly don't treat it as one.

 

[Robbie Cottam]

I don’t understand why you would rent point half now half later, KNOWING that you are taking a risk!

I don’t mind switching reservation if it is possible. Also, with Covid Disney made it very easy.

Finally, anything you have paid money for should be treated like an asset.

College education is an asset.
Home and cars are assets
Food is an an asset.
DVC is an asset.

You paid real money you should get real value.

But back to the underlying question of this thread :

Is Renting DVC Really THAT great of a deal?​

I’m going to RR next month.

The rack rate would be $14,200.

I would have rented the same number of points for $7500 dollars.

Yes, by my math that is a great deal.

If you want to pay rack for some sense of security that is ok too.

BTW. This one trip, is about 20 percent of my total purchase price…. So I think it makes a good argument for ownership as well

 

[AC168]

Ownership strikes me as best deal by far even with what many people are describing as very high priced to buy in.

 

[Robbie Cottam]

the high buy in price of ownership when I bought in in 06 was $69 dollars a point at SSR.
At BLT it was 100 ish.....

Point being it is all relative.

Like anything else, if you are going to use it is works, and you'll enjoy it.
If you are buying it because it is cool, you will be on here in a few years telling us how much of a horrible idea it is...

 

[RoseGold]

Ownership strikes me as best deal by far even with what many people are describing as very high priced to buy in.

Depends on what you mean by "best deal." No DVC is ever going to beat $179 Swolphin or Redweek the Wyndham. Heck not going to WDW at all and watching the fireworks on D+ is the best deal.

DVC is close to all time high to buy in, and these are contracts losing time. Is it a better option than others? Maybe. Maybe not. Renting is a very close option that can be a very good mathematical choice.

I own a lot of DVC, but I don't pretend like it was a "good deal" or that I'm still not paying through the nose for an expensive hotel room by shuffling dollars around.