Rental Value vs. Rising Maintenance Fees

[crisi]

Doug, your situation is a little different as you aren't a casual renter of points. I'd guess that by now you are getting referrals and repeat business...you are able to offer references if someone asks. That is a different situation than I'd be in, I've never rented points, would be posting to the rent trade board blind. And I'm in a pretty positive situation, with a contact long ago paid for at a reasonable cost, and points I could offer for bwv at eleven months out, and have a long board history.

And none of us can say what Disney might do next....it's an easy thing for them to not permit the dining plan without a member card. Or magical express. It isn't much harder for them to give room preferences to members staying in the room, and guests of members are the ones with the dumpster view...a few reports on the resort board from people who have cms tell them that renters get a lower priority in room selection than members, and the value of rentals starts to drop. Disney can exercise a lot of influence here should they choose to.

 

[Deb & Bill]

Here's my rental experience, all of which are just point rentals, no reservation rentals.

- For the previous two years ago I rented out points for $10/point no problem.
- Earlier this year I rented out 1,000 points in 2 days for $11/point.
- This year I've also rented out just over 300 points at $12/point and one rental of under a hundred points for $13/point.


I'd say that the average rate today is $11/point and while there are some people offering rentals for under $11/point, typically there aren't many of them and there is usually an issue with the points having a short life left on them, thus they can't be used to book the most popular rooms and resorts.

In my view, owners of popular resorts for popular times can get $12/point today provided they make their points available in the 7-11 month window so they get home resort advantage for those popular times.

Careful, Doug, you are approaching commercial renter status.

 

[joeyrose]

Careful, Doug, you are approaching commercial renter status.

it's hard to approach something that has no precise definition.

 

[DougEMG]

Careful, Doug, you are approaching commercial renter status.

I'm not even close to the definition of commercial renting.

The only reason I even have so many points to rent out right now is because the contracts I bought all came with 2-3 years worth of points which I need to get rid of. In a normal year I'd probably do 10-20 rentals spread over 3 different memberships. And then once I retire I'll do even less as I start using more points for myself. Right now the number of vacation days I get a year are my most limiting factor.

I've talked with a really big point owner and even they have never had any issues with how many rentals they do.

 

[disneynutz]

it's hard to approach something that has no precise definition.

Or it may be easy depending if Disney decides to change their mood.

Bill

 

[AllieV]

If you can sell out 1000 pts in 2 days at $11 (and presumably expiring soon, so no 11 ms rez), it makes me wonder why no one is listing their points at $15. If you have BWV and can offer Food and Wine at 11 months, people will pay that price. So long as the rate is cheaper than a regular room, you'll get it.

 

[robinb]

Nah, it's been stuck at around $10 a point for the last ten to twelve years. David charges $13 - he gets his cut out of that ($3) and the owner gets $10.

Nah, the usual and customary rental price is finally $11 per point. Sure, you can find some people who just want to dump their points for $10 or less but they are becoming far and few between. The last 3 times I rented out my points I received $12 per point, mostly because I am an experienced renter who is established on the DIS and I use a contract. I know you're not a big fan of people renting, but it has saved me from losing points more than once when "life" got in the way.

 

[robinb]

I'm not even close to the definition of commercial renting.

The only reason I even have so many points to rent out right now is because the contracts I bought all came with 2-3 years worth of points which I need to get rid of. In a normal year I'd probably do 10-20 rentals spread over 3 different memberships. And then once I retire I'll do even less as I start using more points for myself. Right now the number of vacation days I get a year are my most limiting factor.

I've talked with a really big point owner and even they have never had any issues with how many rentals they do.

Sorry, but I agree with Deb on this one. I think that 10-20 rentals per year for 3 years *is* commercial renting and I would bet that you are one of the top renters out there. Are there members who rent out more points? Sure. But I think there are far more people who only rent out once or maybe twice a year.

 

[joeyrose]

what dvc owners think commercial renting is or how they feel about it is moot. only disney's perspective matters. disney has no definition of commercial renting (that is telling), has occasionally sent out a letter about this folks who may appear on their radar. but, to my knowledge no one has been stopped from renting or suffered any consequences. IF YOU HAVE, PLEASE POST.

1) disney is on swampy legal ground when it tries to tell owners what they can do with their points. if disney really could and wanted to legally control this, why all the ambiguity?

2) disney tolerates brokers. removing them from members' accounts as "associates" had little effect on the big brokers. there has been no big effort that i am aware of to shut them down.

3) disney tolerates big point holders (8000+?) that rent, e.g., david/gblast123

4) disney doesn't really mind renting as it many times leads to purchase...brings in fresh blood.

5) disney uses renting as a selling tool by guides..."you can rent" if money gets tight, you can't travel that year, etc.

regarding rental prices, i have not taken less than $12 in three years.

 

[DougEMG]

If you can sell out 1000 pts in 2 days at $11 (and presumably expiring soon, so no 11 ms rez), it makes me wonder why no one is listing their points at $15. If you have BWV and can offer Food and Wine at 11 months, people will pay that price. So long as the rate is cheaper than a regular room, you'll get it.

I think renters are their own worst enemy in that they aren't familiar enough with DVC and don't realize exactly how the 11 and 7 month windows work. They're use to being able to call Disney at the last minute and there be availability, so they figure renting DVC points work the same way and lots of them are surprised that the dates they want aren't available.

 

[DougEMG]

Sorry, but I agree with Deb on this one. I think that 10-20 rentals per year for 3 years *is* commercial renting and I would bet that you are one of the top renters out there. Are there members who rent out more points? Sure. But I think there are far more people who only rent out once or maybe twice a year.

Everyone is entitled to their own definition of commercial renting, the only one's opinion that counts though is Disney's.


My end goal is to rent out enough points to cover all my MF, which quite a few other members already do.

 

[DougEMG]

what dvc owners think commercial renting is or how they feel about it is moot. only disney's perspective matters. disney has no definition of commercial renting (that is telling), has occasionally sent out a letter about this folks who may appear on their radar. but, to my knowledge no one has been stopped from renting or suffered any consequences. IF YOU HAVE, PLEASE POST.

1) disney is on swampy legal ground when it tries to tell owners what they can do with their points. if disney really could and wanted to legally control this, why all the ambiguity?

2) disney tolerates brokers. removing them from members' accounts as "associates" had little effect on the big brokers. there has been no big effort that i am aware of to shut them down.

3) disney tolerates big point holders (8000+?) that rent, e.g., david/gblast123

4) disney doesn't really mind renting as it many times leads to purchase...brings in fresh blood.

5) disney uses renting as a selling tool by guides..."you can rent" if money gets tight, you can't travel that year, etc.

regarding rental prices, i have not taken less than $12 in three years.

Plus Disney rents out DVC rooms for cash themselves. Every time a member trades their points for a cruise, a Disney hotel, an RCI exchange or something else they are effectively renting out their points and using Disney as the point broker. All of these are perks that are not part of the contract, so as long as those are in place, Disney would probably lose any legal arguement to limit what other owners do in regards to renting out their points.

I'm not a lawyer and this could be just wishfull thinking.

 

[wdrl]

Question for DVC Members who rent their points to others: How many of you collect and pay the 6% Transient Accommodations Tax as required by the State of Florida on rental charges or room rates?

 

[joeyrose]

Question for DVC Members who rent their points to others: How many of you collect and pay the 6% Transient Accommodations Tax as required by the State of Florida on rental charges or room rates?

how owners who rent handle their taxes is strictly between them and the tax man.

 

[jeankeri]

Nah, the usual and customary rental price is finally $11 per point. Sure, you can find some people who just want to dump their points for $10 or less but they are becoming far and few between. The last 3 times I rented out my points I received $12 per point, mostly because I am an experienced renter who is established on the DIS and I use a contract. I know you're not a big fan of people renting, but it has saved me from losing points more than once when "life" got in the way.

This is good to see. When I first bought my resale it came with banked points I could not use, so I rented them through the rent/trade board in 2 separate transactions. At the time I thought 10/pp was crazy low since, doing the math which helped me decide to buy DVC in the first place showed what a bargain it made the room in comparison if CRO rack rates. I would periodically check back and would still see 10/pp. When I bought my BLT contract I ended up with a surplus of points which I sell to one friend who attends F&W. Still rent @10pp b/c she is a friend and it is a stress free way to cover MF for the off years I do not travel. If I had to enter the rental market again it's good to know I can increase my rate.

 

[disneynutz]

Question for DVC Members who rent their points to others: How many of you collect and pay the 6% Transient Accommodations Tax as required by the State of Florida on rental charges or room rates?

How many pay Federal and State income tax on the income?

Bill

 

[joeyrose]

How many pay Federal and State income tax on the income?


Bill

only the tax man knows for sure.

this i do know: the irs is extremely ambiguous as to how one calculates profit on such rentals, leaving it to the owner/renter's discretion as to what expenses can be deducted. i am sure a thread that asked how one calculates profit here would produce a myriad of answers and justifications, most of which seem likely to pass irs muster.

 

[crisi]

only the tax man knows for sure.

this i do know: the irs is extremely ambiguous as to how one calculates profit on such rentals, leaving it to the owner/renter's discretion as to what expenses can be deducted. i am sure a thread that asked how one calculates profit here would produce a myriad of answers and justifications, most of which seem likely to pass irs muster.

Actually, there are tax rules about how to rent out a timeshare and how to cost it and how you do that depends on (and its been a while since tax class) what proportion of your ownership you rent out. We can have all the methods and justifications in the world, but this one is really something anyone who rents more than casually should talk to their tax professional about, because most of them wouldn't pass muster under an audit - if there was any income tax implications at all (for casual renters, IIRC, there isn't).

I am not a tax professional, I am not your tax professional, and advice on the internet is worth what you paid for it. I could be a highly trained chimpanzee typing this.

 

[joeyrose]

Actually, there are tax rules about how to rent out a timeshare and how to cost it and how you do that depends on (and its been a while since tax class) what proportion of your ownership you rent out. We can have all the methods and justifications in the world, but this one is really something anyone who rents more than casually should talk to their tax professional about, because most of them wouldn't pass muster under an audit - if there was any income tax implications at all (for casual renters, IIRC, there isn't).

I am not a tax professional, I am not your tax professional, and advice on the internet is worth what you paid for it. I could be a highly trained chimpanzee typing this.

may we please have the irs tax code to which you refer here. i'm sure all of us would like to know exactly how the irs expects calculations of profit on timeshare rentals. why didn't you post a link or quote from this code with its unambiguous rules.

i do my own taxes. i can certainly figure out the code if you simply point me to it.

 

[crisi]

may we please have the irs tax code to which you refer here. i'm sure all of us would like to know exactly how the irs expects calculations of profit on timeshare rentals. why didn't you post a link or quote from this code with its unambiguous rules.

i do my own taxes. i can certainly figure out the code if you simply point me to it.

Sure, I'm not a tax accountant, but I am an accountant. I'd be happy to research the law for you. My consulting rate is $200 an hour. I get paid in advance with a three hour minimum.