Need some second opinions on my plans

[WDWRook]

We own 60 points at Poly we purchased direct a few years ago. Love the Poly, love DVC. My wife and I have been talking about adding some points so we can go more often and maybe start staying in one bedrooms. We also just went on our first DCL cruise a few weeks ago and loved it (though my wife less so as the waves got to her the first night). But, we are booked for another DCL for next January.

So, my though process is, why pay $5,000 to DCL for a one time trip. Instead, pay $10,000 for 100 AKL points (estimating and rounding for math), and we can rent those 100 points at $14.5 per for two years and pay for much of our cruise, plus we would still have the points for the further that we can either go to WDW, rent and use the cash for another DCL, or swap into RCI and go where ever. The idea being that out of three years, one year we use 3 years Poly points at WDW, the second year we rent the AKL yr 1 and 2 points and cruise, the third year we use Yr 3 AKL points at WDW, and repeat.

This was for $10,000 (ignoring annual fees) we can cruise once every three years, and increase our WDW trips, versus paying for two cruises.

I know that's over simplified and I'm intentionally ignoring the annual fees, but am I way off here? If we plan to go anyway, isn't this a smarter way to go about it?

The only hiccup, is that I'm not real fond of the fact that resell points cannot be used at the new resorts. I'm not sure I'll be overly eager to go to Riviera but the Relections concept at the old River Country could be something we are very interested in. I supposed we can always worry about that with it opens (likely not for 3-4 years) and consider buying some points direct from that resort.

 

[skippytx]

Ignoring the dues is the downfall of this. AKL dues are about 7.50 a point. You'll net 7 dollars a point off renting your AKL points every year. Renting 2 years of points for a net of 1400 won't even cover 1/3rd of a 5K DCL cruise.

Those 200 points though can get you a 1 bedroom at AKL for a week during Magic season, a much better value for the use of the points. (Rack rate would be roughly 5K for that room)

 

[KAT4DISNEY]

As mentioned you can't ignore the annual dues when reviewing a financial justification to purchase more points with the plan to rent them out.

Buy DVC to use for DVC room stays. If you want to cruise now and then renting points out to go towards costs is fine IMO but with everything going on with DVC these days I find it a very risky proposition to purchase points with the plan to regularly or only rent them out. As mentioned your net of $7 to $7.5 per point isn't getting anywhere near covering the Disney cruise. Even with current owners the recommendation to rent vs use points for exchange is just because there is such a premium point requirement vs the calculation of what you would need to rent to pay cash for the cruise. It isn't that you make money doing so. It's just that you aren't paying such a high premium doing the point exchange.

 

[WDWRook]

Part of it is that we are thinking of buying more points in the nearish future. Maybe not today, but in the next couple of years. So, why not buy it now and if we don't need the points all the time rent them and use the cost toward a cruise. I know using points direct for a cruise or really anything else is said to be a poor use of points (except maybe RCI).

 

[Deb & Bill]

Part of it is that we are thinking of buying more points in the nearish future. Maybe not today, but in the next couple of years. So, why not buy it now and if we don't need the points all the time rent them and use the cost toward a cruise. I know using points direct for a cruise or really anything else is said to be a poor use of points (except maybe RCI).

You'd have to spend more and buy direct points to use them for the cruise without selling them to pay for the cruise. You can't use resale points to book a cruise.

 

[kniquy]

I know that's over simplified and I'm intentionally ignoring the annual fees, but am I way off here? If we plan to go anyway, isn't this a smarter way to go about it?

If you are looking to maximize your take home money from renting your points then purchase the resort with the lowest MF - SSR. Your example of 100 points would yield $1700 on the rental market per year, your MF if you bought SSR would be $640 (based on 2019 dues) so you would have $1060 per year to put towards a cruise. Rent out 2 years of points and you now have ~$2120 per year to use for a cruise. So you would still have to come up with a portion for the cruise.

I guess in theory this could work to off set your cruise costs. You could always look at doing other cruise lines too which would be considerably less expensive than DCL.

If you have the funds to purchase without financing then this situation could work out for you.

I have never rented but i believe others have mentioned that there could be taxes owed for renting your points. This might be only if you use an actual rental company to handle the transaction.

 

[_auroraborealis_]

You'd have to spend more and buy direct points to use them for the cruise without selling them to pay for the cruise. You can't use resale points to book a cruise.

I think OP was intending to rent and pay cash. Resale works for that.

 

[Cyberc1978]

(except maybe RCI).

Using your points for RCI is IMO THE worst use of points. If you want to stay at a rci resort either rent your points and use that money to book the resort. Another option would be to buy a cheap RCI timeshare and use that to exchange within RCI.

DVC points are best used within DVC.

 

[WDWRook]

Thanks for the comments everyone. Yes, if we (really when we) buy more points we will pay cash. (or really use a credit card to get some miles, then pay that off before interest kicks in). This all started out of a discussion that we want to buy more points, go to DVC more often, and stay in some one bedroom resorts on occasion. The kids are 12 and 8 currently and tWife commented that we should make use of Disney while they are still young and love it. Great. Then, we went on a cruise, loved it (mostly, tWife got a bit motion sick and is still unsure about that aspect) and promptly booked a second cruise. So, knowing we plan to do DVC often, practically every year, but we also want to cruise everyone 2-3 years and would likely not stay in DVC for more than a couple nights on years we cruise, I was trying to maximize how to do that. My thought was simply, buy more points now even though we cannot use then in 2019 or 2020 (we have trips booked already) rent the points out to get some value back and apply to the cruise.

Maybe it doesn't really work that way.

 

[WDWRook]

Regarding RCI: If you can book a weeklong trip for 150 or even 130 points in peak season at just about any RCI resort, isn't that a good deal? We have not done RCI at all, but that is the sales pitch.

 

[_auroraborealis_]

Regarding RCI: If you can book a weeklong trip for 150 or even 130 points in peak season at just about any RCI resort, isn't that a good deal? We have not done RCI at all, but that is the sales pitch.

Not necessarily when you figure the sunk cost and the functional value of a DVC point, versus the discounts it's not that hard to get on many RCI properties for cash.

 

[BillPA]

Just an FYI, many RCI resorts have lots of fees, be sure to check what they are as to not be caught off guard.

 

[Dean]

We own 60 points at Poly we purchased direct a few years ago. Love the Poly, love DVC. My wife and I have been talking about adding some points so we can go more often and maybe start staying in one bedrooms. We also just went on our first DCL cruise a few weeks ago and loved it (though my wife less so as the waves got to her the first night). But, we are booked for another DCL for next January.

So, my though process is, why pay $5,000 to DCL for a one time trip. Instead, pay $10,000 for 100 AKL points (estimating and rounding for math), and we can rent those 100 points at $14.5 per for two years and pay for much of our cruise, plus we would still have the points for the further that we can either go to WDW, rent and use the cash for another DCL, or swap into RCI and go where ever. The idea being that out of three years, one year we use 3 years Poly points at WDW, the second year we rent the AKL yr 1 and 2 points and cruise, the third year we use Yr 3 AKL points at WDW, and repeat.

This was for $10,000 (ignoring annual fees) we can cruise once every three years, and increase our WDW trips, versus paying for two cruises.

I know that's over simplified and I'm intentionally ignoring the annual fees, but am I way off here? If we plan to go anyway, isn't this a smarter way to go about it?

The only hiccup, is that I'm not real fond of the fact that resell points cannot be used at the new resorts. I'm not sure I'll be overly eager to go to Riviera but the Relections concept at the old River Country could be something we are very interested in. I supposed we can always worry about that with it opens (likely not for 3-4 years) and consider buying some points direct from that resort.

If you cruise, you're paying for it one way or another, renting to pay for the cruise is an option but even better to just pay cash for the cruise and add on the points you need going forward as independent processes even if you have to wait a couple of years to buy more points after you pay for the cruise.

Regarding RCI: If you can book a weeklong trip for 150 or even 130 points in peak season at just about any RCI resort, isn't that a good deal? We have not done RCI at all, but that is the sales pitch.

When you consider the best places are unlikely to be available, the short answer is no. Many options don't have one BR to use the lower points, many aren't going to be available, there are often extra dues, you lose assignment priority, if you have to cancel your have little options are some of the issues. It's good to have options but buying planning to use for RCI is not a good plan.

 

[DisneyLore]

Thanks for the comments everyone. Yes, if we (really when we) buy more points we will pay cash. (or really use a credit card to get some miles, then pay that off before interest kicks in). This all started out of a discussion that we want to buy more points, go to DVC more often, and stay in some one bedroom resorts on occasion. The kids are 12 and 8 currently and tWife commented that we should make use of Disney while they are still young and love it. Great. Then, we went on a cruise, loved it (mostly, tWife got a bit motion sick and is still unsure about that aspect) and promptly booked a second cruise. So, knowing we plan to do DVC often, practically every year, but we also want to cruise everyone 2-3 years and would likely not stay in DVC for more than a couple nights on years we cruise, I was trying to maximize how to do that. My thought was simply, buy more points now even though we cannot use then in 2019 or 2020 (we have trips booked already) rent the points out to get some value back and apply to the cruise.

Call me crazy but your option sounds like a good one to me. If you're planning to add on anyway, why not do it now before the price goes up even more. Then since you can't use the points at WDW for the next two years, rent them out and cover your MF and any left over money goes towards your cruise. Obviously, you know that it won't pay the entire amount of the cruise and yes you have to pay your MF for the two years you won't be at WDW but since the cost per points are going up each year (sometimes more than once) why not get them now and rent them out to cover the MF of those years.

 

[a742246]

Regarding RCI: If you can book a weeklong trip for 150 or even 130 points in peak season at just about any RCI resort, isn't that a good deal? We have not done RCI at all, but that is the sales pitch.

IMHO, the only time it pays to trade your DVC points into RCI, is to trade into the Manhattan resorts. All other trades are not that equal in value. On the other hand if you are a DVC member you can get some good RCI "last call" and "Extra Vacations" for cash reservations.

 

[Dean]

IMHO, the only time it pays to trade your DVC points into RCI, is to trade into the Manhattan resorts. All other trades are not that equal in value. On the other hand if you are a DVC member you can get some good RCI "last call" and "Extra Vacations" for cash reservations.

There are some good choices but they are limited. The trouble is most of those are not going to be available routinely.

 

[cruisin5]

The time with your kids at Disney is limited, especially if they are boys. Think about how you and your wife will use it in 15 or 30 years.