Question about buying multiple DVC resales and then renting the points out

[JessLCH]

Is this permitted? Is there a limit to how many points one can buy and a limit to number of home resorts? Looking into purchasing DVC mainly for the purpose of renting out the points, though we would use some as well.

 

[bakenatj]

There are some rules about this that some here can tell you about, but from what others will tell you it is a lot of work without a lot of return. You have to figure the most you are going to rent points for is $12 then you have maintenance fees out of that so you might make $5-7 a point.

Most jobs pay better than that and you don't have to deal with annoying renters. No offense, I'm sure most are great but if it's anything like retail you wouldn't mind taking of few of them behind the wood shed for a good beat down!

So even if you are looking at it to pay for your up front cost, it would still take you 8-10 years to pay it off if you buy resale, and a lot longer if you buy direct.

I do know that Disney prohibits and will stop large renters, or commercial renters. So they do monitor this.

 

[chalee94]

Is this permitted?

past a certain point, "commercial" renting is prohibited by disney.

IMO, you'd be asking for trouble to buy pts intending to rent them. way too much hassle for too little return.

Is there a limit to how many points one can buy and a limit to number of home resorts?

no limit to home resorts that i know of. there is a limit to maximum number of pts but it's pretty high.

 

[JessLCH]

Also, what is the best place to purchase resale? the Timeshare Store? Where else?

 

[CarolMN]

I would also discourage you from doing this unless you already have an ongoing source of reliable people who would like to rent from you. Renting to strangers can be risky and frustrating.

You will have lots of competition from others who are already well known and have established businesses with websites. As already mentioned, Disney is not very supportive of renting and prohibits "commercial" renting. At this time, making more than 20 reservations per year will trigger some type of "audit" to see if the owner is renting commercially.

Know that the owner is responsible for the actions of his/her guests and renters - there have been reports here of an owner's account being frozen due to an unpaid bill at check out. (Apparently, the charges came through after check out and rather than try to contact the guest, Disney just decided to freeze the owner's account. Fortunately, the "renter" was a relative of the owner and paid the charges when the owner notified him about them. Even more interesting, the owner didn't even know there was a problem until he tried to use his account to make another reservation. DVC did not pro-actively notify about either the problem or the freeze). Similarly, if your guest or renter damages the room, you, the owner would be responsible.

Many owners do rent occasionally, when they cannot use the points themselves. Many are successful. However, because of the large numbers who do this, rental prices rise slowly, if at all. Getting $12-$15 per point is tough when others are offering points for $10 or less. Points were renting for $10 in the late 90's and many transactions are still going through at that price.

Think carefully before you proceed. It's not as easy as one might think.

 

[JessLCH]

What exactly defines "Commercial renting" by DVC? More than 20 rented reservations per year? What If I were to own, for example, 10 sets of point contracts and rent them all out nearly every year? Trying to find out the exact rules on this. "prohibits commercial renting" is too vague.

 

[drusba]

Under the rules you can own no more than 2,000 points in one resort and 5,000 total. Under the same rules you concede when purchasing that you are doing so principally for your vacation use. Under the same rules you are prohibited in engaging in the "commercial" rental of the units which it defines further as a pattern of rental activity which DVD could construe as showing you are a commercial renter. Disney has set up a 20 presumption rule in that if you reach 20 reservations per year you will be presumed to be a commerical renter. That number is for you and the combination of all your contracts, i.e., you don't get 20 per contract, and it is 20 reservations regardless of whether they are all rentals and thus the count includes your own personal reservations.

If you still want to proceed at your own risk then the Timeshare Store which is a sponsor of this site has many good reviews.

 

[JessLCH]

Under the rules you can own no more than 2,000 points in one resort and 5,000 total. Under the same rules you concede when purchasing that you are doing so principally for your vacation use. Under the same rules you are prohibited in engaging in the "commercial" rental of the units which it defines further as a pattern of rental activity which DVD could construe as showing you are a commercial renter. Disney has set up a 20 presumption rule in that if you reach 20 reservations per year you will be presumed to be a commerical renter. That number is for you and the combination of all your contracts, i.e., you don't get 20 per contract, and it is 20 reservations regardless of whether they are all rentals and thus the count includes your own personal reservations.

If you still want to proceed at your own risk then the Timeshare Store which is a sponsor of this site has many good reviews.

Thank you, this was the information I was looking for. Appreciate it.

 

[Deb & Bill]

And if DVC stumbles upon your website or Ebay sales, they can shut you down in a minute and may require you to sell your points.

 

[ELMC]

Thank you, this was the information I was looking for. Appreciate it.

It sounds like you're pretty determined to do this. My only recommendation would be that you run the numbers to see if it actually makes sense vs. investing the money in a low risk bond fund or similar investment that averages 4-6% over time. When doing your calculations remember that unlike traditional investment vehicles, with DVC your initial investment (purchase price) depreciates to zero over the life of the contract. There are a lot of variables to consider, feel free to PM me if you want to discuss this more.

 

[Caren90]

Here is the exact language from the 2012 vacation planner:

Examples of commercial renting include, but are not limited to:

A member who maintains a website offering rental of Vacation Points.

A member who makes 20 or more reservations across all Memberships, in total, during a 12-month period in the name of persons not on their membership.

 

[Tamar]

DVC point renting is not much of a money-maker, unless you go big time like David's rentals. I know it looks attractive, but it is not easy money. There are too many variables. You can't buy contracts and assume that a renter is going to want exactly the number of points that you have. Then there will be dining to book, and magical express, and changes, and keeping up on when payments are due, and worrying about a renter damaging a room or leaving an unpaid bill....not for the faint of heart.

 

[ELMC]

DVC point renting is not much of a money-maker, unless you go big time like David's rentals. I know it looks attractive, but it is not easy money. There are too many variables. You can't buy contracts and assume that a renter is going to want exactly the number of points that you have. Then there will be dining to book, and magical express, and changes, and keeping up on when payments are due, and worrying about a renter damaging a room or leaving an unpaid bill....not for the faint of heart.

To clarify, David is a point broker. The majority of his business involves matching owner with renter and taking a cut of each transaction.

The major obstacle to renting out points for profit remains the basic economics of the DVC model. The fact that it takes between 4-8 years to simply get your money back on a DVC purchase sort of makes it difficult to turn a reasonable profit.

 

[DVC Dude]

And if DVC stumbles upon your website or Ebay sales, they can shut you down in a minute and may require you to sell your points.

This seems highly unlikely.

With over 150,000 members (or is it now 300,000) has this even happened to ONE person?

Finding renters with their own website or eBay is easy to do, but I doubt Disney cares as long as the annual dues is paid.

Also, renters would be HAPPY if Disney bought ALL of their points back --- if they want to offer the current developer selling rate.

 

[KAT4DISNEY]

This seems highly unlikely.

With over 150,000 members (or is it now 300,000) has this even happened to ONE person?

Finding renters with their own website or eBay is easy to do, but I doubt Disney cares as long as the annual dues is paid.

Also, renters would be HAPPY if Disney bought ALL of their points back --- if they want to offer the current developer selling rate.

A recent post I saw somewhere indicated that DVC did just this or similar to a person in the last month or so.

 

[Deb & Bill]

This seems highly unlikely.

With over 150,000 members (or is it now 300,000) has this even happened to ONE person?

Finding renters with their own website or eBay is easy to do, but I doubt Disney cares as long as the annual dues is paid.

Also, renters would be HAPPY if Disney bought ALL of their points back --- if they want to offer the current developer selling rate.

A recent post I saw somewhere indicated that DVC did just this or similar to a person in the last month or so.

I also heard of it happening to someone who rented on ebay.

 

[Dean]

The max is 5000 and 2000 per resort. One could do so and likely stay out of the commercial renting issue but it'd be close. Plus it makes no sense financially. Not enough money to be made and far too much risk.

 

[crisi]

Remember, as well, that Disney has a lot of subtle power to influence rentals if they choose to. For instance, they could make it only possible for MEMBERS to add the dining plan - it wouldn't be available to your guests or renters. Or only MEMBERS may use ME, your guests or renters would have to rent a car or take a cab. They could make it known that MEMBERS staying in the room get priority on rooms requests, guest and renters get the room overlooking the dumpster or the one without the balcony. These sorts of changes would not surprise me as Disney has more room inventory in their hands and rentals remove revenue from their pockets. Moreover, for a lot of the membership who really doesn't like rentals and likes DVC as an "exclusive club" these sorts of changes would be welcome (right until you try and book a trip for your daughter for her honeymoon and discover that she isn't a member).

Now, you invest in 3000 points this year, and next year Disney decides to start discouraging rentals, that might be an uncomfortable spot.