Is renting out your DVC for profit legal?

[3DisneyKids]

Just subsribing as I can never pass up a good renting thread!

 

[rinkwide]

By the way, does anyone happen to know why renting DVC for commercial purpose is prohibited?

 

[JimMIA]

If DVC defines renting of points as commercial, what next? They can't take your real property without due process. In other words, they must buy back the points or live with members engaged in "commercial" renting.

IF -- and it's a big if -- DVC ever decided to really crack down on "commercial renters," they would do no such thing. That's jailhouse lawyer talk.

If they really wanted to crack down, DVC would simply restrict points usage to what they consider permissible uses. They wouldn't "take" anything, they wouldn't buy back anything, and they wouldn't "live with" commercial renters. They'd simply say no and either refuse to make ressies, or cancel ressies.

If an owner didn't agree with DVC's position, they would be within their rights to challenge DVC in court. Personally, I think that would be a loser, but the courts are all about differences of opinion on legal issues.

 

[kend58]

QUOTE=Turtleship;19713049] "snip" As for the IRS, my original purchase price on the points, annual dues, my time engaged in the renting of the points, at best will be a wash. "snip"[/QUOTE]

The IRS has specific rules for Real Estate interests they would not just allow a write off but would require a depreciation schedule of 30 years for the Purchase price.

Annual MF would be an allowable expense

Your time and effort are not expenseable unless you are paying yourself wages and then you better have done your quarterly (or more frequent) filings and paid your applicable 941 taxes in a timely manner on that income.

Fictional example:

Bought 1000 DVC points from DVD for $ 90 per point
30 yr depreciation schedule = $3 per year
MF $4.12 per year
Associated overnight delivery services etc $25

Rent a customer 250 pts @ $10 per point or $2,500.00

Depreciation on those points $ 750
MF on those points $ 1,030
Misc expenses $ 25

Total expenses $ 1,805

Taxable profit from transaction $ 695
taxes on transaction $ 173.75

(assumes 25% bracket your own tax rate may be higher or lower it will vary)

The above would be "as for the IRS" on that example whether the State of Florida, Reddy Creek Municipal district, Orange County Florida, your state of Residence or some other govermental entities would also want a piece of the action I am uncertain.

My point is any DVC owner renting points for anything close to the prevailing rates as seen on the boards would have a hard time arguing they made $0.00 profit on the rental. That would make it a for profit transaction and under the IRS rules subject to taxation unless being done by a registered non-profit entity. Should DVD, DVC or whatever division of Disney ever decide to get serious about this they will IMHO have little difficulty proving "Commercial Intent" if the owner has repeticious transactions across multiple years and or multiple transactions in a given year at different times either one will show an ongoing intent to rentpoints and the transactions are clearly "for profit" if payment at prevailing rates is being received.

 

[RobDoc]

... If they believe the renting of points was against their rules, a Disney lawyer will be filing a cease and desist order against the operators of disboards.com to stop it from aiding DVC members trying to rent points on their board. Their silence speaks volumes.

The DIS has no direct commercial benefit from the Rent/Trade Board. If Disney's lawyers want to address "Commercial Purpose" it will be (and has been) done directly thru the individual members themselves. Their (Disney's) "silence" has nothing to do with "Commercial Purpose" or any lack of interest in the issue - only that they have direct means to address the issue.

 

[dunkie7557]

Has anyone else had this experience of being waitlisted all the time? Why would anyone buy into DVD if this was the case? Are you trying to get inot only one specific DVD like BW or BC which are very popular? These untis will be worth nothing if you can't reserve a room within a reasonalbe timeframe like 7 months or more

 

[kimberh]

Has anyone else had this experience of being waitlisted all the time? Why would anyone buy into DVD if this was the case? Are you trying to get inot only one specific DVD like BW or BC which are very popular? These untis will be worth nothing if you can't reserve a room within a reasonalbe timeframe like 7 months or more

I have never had this happen. I buy where I want to stay, so I use th 7-11 month booking window at those resorts.

 

[Lynne M]

Has anyone else had this experience of being waitlisted all the time? Why would anyone buy into DVD if this was the case? Are you trying to get inot only one specific DVD like BW or BC which are very popular? These untis will be worth nothing if you can't reserve a room within a reasonalbe timeframe like 7 months or more

I've only had to waitlist once, when booking spring break at VWL, 3 months out. The waitlist came through the same day.

If you're booking your home resort between 7 and 11 months out, waitlists are probably quite rare, except for villa types that are rare, such as BWV standard view, BWV grand villas, and AKL concierge villas. There are small numbers of each of these, so of course there's going to be a lot of competition between you and your fellow owners.

Certain times of year may also require waitlisting. December is perhaps the best example of that, it's extremely popular for DVC members and villas book up fast, even in the home resort window. BWV and BCV can also fill up quickly during the Food and Wine festival.

Outside of those examples, though, it's not difficult at all to get a villa without waitlisting. I've never even called day-by-day for my home resort (VWL), which is one of the smallest, because I book that between 7 and 11 months out.

 

[doubletrouble_vb]

I suspect I've waitlisted most times. But that's because I either want something specific that isn't my home or I'm trying for a reservation on the fly.

Odds are if you make your reservation at your home resort you can get a room at 7.5 months.

 

[MrShiny]

Well, my longest booking request (5 nights) was done around 5 - 6 months in advance for a vacation and I was put on a wait list. Was told to wait list night by night for a better chance to get my room and slowly was getting my nights one by one. I actaully waited until 2 weeks before check in that I actually got my whole request. THAT was difficult because I didn't want the vacation if I didn't have the nights together and it was very last minute.
I never requested more than 2 nights after that (maybe due to fear...lol)...but I still get waitlisted.
My recent request (only 2 nights) I did exactly 7 months in advance and guess what, I am on the waitlist. No word yet.....

That's your problem. You should try your home resort, at least 7 months and a day out. Then you should not have any wait list problems. Does your schedule not allow booking that far out, and/or are you always trying for other than your home resort?

I've been a member for 5 years now and have not had much problem, except with reservations about a month or two away from my home resort, and even then, I usually find something (or at least a discounted cash room through DVC).

 

[Kickapoo Joie Juice]

I called on the day 1 of my 11 month window and booked my ressies for the 2 bdrm and studio for our vwl first week in december vacation. I got waitlisted scared1: ) on the studio. It came through in about a week.

Then in february we had more family members want to come and I called for anther studio at vwl.

Waitlisted.

It's now july.

I'm still waitlisted.

I called in at the seven month window and added ssr and okw studios for that week, hoping one would come through.

Waitlisted.

We have to book at the end of august and I'm not willing to leave some points hanging out there in the hopes that one would come through.

this is the first year I've had trouble like that and I'm frankly kinda bummed...

 

[tfc3rid]

I'm having issues looking for simply one night... I mad reservations on Friday for Any Resort either 1BD or Studio for Saturday 10/6 and Sunday 10/7... Got a wide choice on the 6th, but nothing availalble for the 7th... So now I'm waitlisted an holding off on buying airline tickets because of it... I'm debating using points for the Yacht Club...

I've booked on relatively short notice in the past (October for New Years week, etc.) and never had to be waitlisted...

 

[mark&sue]

It looks like we need more DVC resorts!

I am glad that we can rent out as you never know when you can get over to WDW in the next 40 something years. It could be through illness, loss of job or other unforeseen events. We live in the UK and it just may not be possible for us to come over every year. so without having to sell our DVC at least we have the re-assurance of renting. This is what we were told when we bought and helped us made the decision to buy.

So far we have never rented but it looks like it could be a possibility soon, as we are buying a holiday home in Spain and need to use our time off work to sort things out over there for maybe the first year or two.


Susan

 

[Kickapoo Joie Juice]

By the way, does anyone happen to know why renting DVC for commercial purpose is prohibited?

...because it makes the socialists angry.


I called this week to see if there were any Vero Beach cottages available for our spring break next year, even though the 7 month window isn't until sept.

After the CM stopped laughing and wiped her eyes, she said, no, all four of them were already booked. I kinda wonder even if I got a small contract at Vero whether I'd be able to get one of those...

 

[MissMet]

Help me here...

I'm still not sold on the whole *need* to rent points. If you can't go on a vacation this year for whatever reason, why don't you just bank your points so you don't "loose" them? Then next year rolls around & you use the banked points first, then use that UY's points or bank them if you can't use them. And did we forget travel insurance? If you purchase the travel insurance, you get reimbursed (somewhat).

This annoys me. All the people for renting say, "well, if you can't book 11-7 months in advanced than DVC is not right for you.

No. If you can't go to WDW at least every other year than DVC is not right for you. DVC states that DVC is only worth it if you at least go every other year.

I would love it if DVC banned renting all together. Maybe make it that the owner must be present for the reservation with the exception of one reservation a year being allowed to "bless" family/friends with a trip without you needing to be present.

Some may rarely be able to stay at a certain resort due to it not being their home resort, but were told by the DVC staff that "they can stay at any of the DVC resorts" so they purchased. That's not fair to them, just so someone can rent their points to pay for their maintenance fees or so they wont "loose" their points.

It's just not right. Either you buy DVC to use yourself or you don't buy DVC at all. It's that simple.

 

[dianeschlicht]

Help me here...

snip
I would love it if DVC banned renting all together. Maybe make it that the owner must be present for the reservation with the exception of one reservation a year being allowed to "bless" family/friends with a trip without you needing to be present.

Some may rarely be able to stay at a certain resort due to it not being their home resort, but were told by the DVC staff that "they can stay at any of the DVC resorts" so they purchased. That's not fair to them, just so someone can rent their points to pay for their maintenance fees or so they wont "loose" their points.

It's just not right. Either you buy DVC to use yourself or you don't buy DVC at all. It's that simple.

That simply will NOT happen. I can't think of any timeshare that does not allow renting. While I agree that "commercial" renting should be controlled, I do not think you take away the ability for someone to get the use out of their points should they happen to not be able to use them for a couple of years.

Now as to renting and the availability of DVC rooms. There will always be SOMETHING available within your 11 month booking window. It might not always be the unit size you want, but the priority window is the key. There should be no difference to availability between folks using their points for themselves or booking for others. The home resort booking advantage doesn't change for the number of points sold at that resort, so that doesn't have a negetive effect on how many points can be used or booked. I thing the real problem came with point morphing and people working the system to make points from one resort become points of another resort. THAT is what would make an imbalance that would cause over booking at the 11 month window.

 

[Deb & Bill]

...If you purchase the travel insurance, you get your points back for a canceled trip.....

If you purchase travel insurance (through DVC) you get about $5 a point for your reservation. You don't get your points back.

 

[disneynutz]

Help me here...

... And did we forget travel insurance? If you purchase the travel insurance, you get your points back for a canceled trip.

If you are talking about Disney travel insurance, you only get the dollar value of 50% of your canceled trip points for covered reasons. Not the points. The value of the points are based upon the formula in the policy. Depending upon when you cancel, you may still be able to use the points for another trip, or you may loose them.

 

[disneynutz]

Deb, I must formally request that you type slower.

 

[MissMet]

Thank you for explaining Insurance to me, haven't needed to use it yet.

Anyway, my point is no matter what the reason you get reimbursed. Maybe not your full points, like I had said, but if you cancel with enough notice, you get most of your points back if not all or if you have insurance you get reimbursed somewhat.

So I still don't get why anyone "needs" to rent like they say they do, but whatever.