Need advice on purchasing resale add on points

[stocker1042]

Hello all...

After reading threads for over two hours, I've realized a few things. First, my eyes hurt. Secondly, there are a ton of very well-informed and knowledgeable people on this forum. So, I have a question for everyone and hopefully someone can point us in the right direction. This might be a little long winded.

My wife and I bought 160 points at BLT last December with a June use year. Our reason for buying into DVC was so that after our initial payment, rent off some points every year to cover our dues, and use the rest for our bi-yearly Disney vacations. We figured the savings on quality rooms over the years would be more then what our investment would earn in the current economic climate. It has worked out well so far.

Now what has happened...we have more people asking us to rent points AND we'd like to have the option in a few years of using more points to upgrade for special events like our anniversary.

So...I've been going crazy looking at resale contracts. We are looking to spend $10K or less. I am thinking the 150 point range is what I will have no problem renting out as it seems everyone who asks wants a week...which most seem to be in the 120pt range. We're talking Disney World in Florida, no CA, HI, or cruise requests.

So...my questions:

1. Would it be better given our situation to buy a lower inital price resort (HH, VB) and deal with the higher dues-or go with a higher price resort and deal with lower dues?
2. We rented this year to a friend for $8 a point..which...I think was a bit low. What is fair on the open market to rent? $10....$11....more?
3. How much "wiggle room" is there right now (July 2011) on asking prices on TTS listings vs. what Disney will jump on? I know this all depends on which resort, but let's say for example..OKW listed at $57...if I go in at say....$52..which is about 10% less...will it go through? I know someone did the chart but for some reason I was not comprehending it.
4. Finally..does anyone else out there do this? If my math is somewhat correct...on a $8000/150pt investment, and renting at $12 a point, you can cover your dues at $700 and make $800 or so back on your investment per year.

Any help in the decision is greatly appreciated. Thanks!

 

[JimMIA]

So...my questions:

1. Would it be better given our situation to buy a lower inital price resort (HH, VB) and deal with the higher dues-or go with a higher price resort and deal with lower dues?

I personally would not buy VB or HHI. First of all, the dues are going to eat you up. Secondly (and maybe more important), I'm sure the vast majority of your rentals are going to be at WDW. With HHI or VB, you would be limiting yourself to the 7-month window. If you own somewhere onsite at WDW, you can at least be assured of getting a reservation for a renter at a WDW resort, even in prime time if they plan far enough ahead.

2. We rented this year to a friend for $8 a point..which...I think was a bit low. What is fair on the open market to rent? $10....$11....more?

Yeah, that's low. It's okay for a very occasional gift to a good friend, but too low for regular rentals. If you're renting yourself, $10-12 seems to be the range. If you rent through David, he rents the points for $13 and you get $10. Considering David's success at $13, it doesn't seem that $11-12 is too high at all.

3. How much "wiggle room" is there right now (July 2011) on asking prices on TTS listings vs. what Disney will jump on? I know this all depends on which resort, but let's say for example..OKW listed at $57...if I go in at say....$52..which is about 10% less...will it go through? I know someone did the chart but for some reason I was not comprehending it.

If you're looking at OKW or SSR (which is what I'd look at -- low selling prices and low dues), I don't think Disney cares what you pay -- they're not ROFRing. Both of those resorts have cleared ROFR for $45 or less this year, so I don't think you have to worry.

Listing prices are starting points. I would look at the ROFR thread to get an idea of what various resorts are selling for. I'd ignore the highs and lows and focus on where most of the contracts are selling...and I wouldn't pay more.

4. Finally..does anyone else out there do this? If my math is somewhat correct...on a $8000/150pt investment, and renting at $12 a point, you can cover your dues at $700 and make $800 or so back on your investment per year.

Although that sounds good at first blush, it's really not a great return on investment. And there could be all sorts of issues -- loss of points, not being able to rent all the points you want to rent, restrictions by DVC on rentals. I like renting a lot better as a way to use points which are not needed right now, or to fund some other type of vacation -- not so much as a business.

 

[magicaldisney]

What would you do if Disney wouldn't allow the rental of points any longer? Would you be ok to hold on to all of those points for yourself? And pay the maintenance fees on all of the points without rental income to cover it?

 

[robertdangelo]

You may want to consider Saratoga Springs Resort for additional points. The prices are reasonable and the contract end date is 2054. you may also want to consider purchasing 2 contracts at 75 points each, with same use year. this way you can downsize if necessary and smaller contracts tend to sell quicker.

 

[JimMIA]

What would you do if Disney wouldn't allow the rental of points any longer? Would you be ok to hold on to all of those points for yourself? And pay the maintenance fees on all of the points without rental income to cover it?

Legally, I don't think DVC could prohibit renting altogether. In addition, they rent themselves so I don't think they would stop renting even if they could.

They could, however, restrict rentals. They could create all sorts of hoops to jump through, institute "guest certificates" like many other timeshare systems do, etc, etc. So, although renting probably would not cease, it could certainly get less convenient and less profitable.

 

[stocker1042]

Thanks for the information. I've learned a bunch on this board already. I almost wished I had gone here to learn about resells before buying direct from Disney.

As far as restricting renting, I don't see how they could really prevent me from doing so. I am really only renting to friends and relatives..and in some cases in the very near future, we plan on giving the points away as gifts instead of purchasing traditional gifts for major events. We have quite a few weddings and big birthdays (60/70) coming up and instead of buying something that they may or may not like-or just giving cash, who wouldn't want a weekend at Disney as a gift??? I don't see how Disney could ever restrict that type of thing.

We are looking to upgrade to about 300 points total. That really isn't all that much considering that we do go two times a year for about 3-4 days at a clip. I would be fine upgrading from 160 to 260 also, as that would also serve my purpose. Seems like most SSR are 150 or so, but I do see some different amounts every now and then.

I guess now I just need to keep the eyes peeled!

Thanks again!