Renting DVC Points?

[TheXFactor]

Do any of you rent a portion of your DVC points as a means to offset the maintenance fee for the total amount of points you own?

I'm under contract for 150 BWV and 200 VWL. I'm thinking about renting the 200 VWL points (@ $8-10) to cover the maintenance fee's for all 350 points, does that make sense? Is there anything weird that I'm not considering?

 

[tjkraz]

You could, but I can think of a lot of better things to do with your money. My guess is you're paying around $17k for the 200-pt contract. An investment as simple as a CD earning 4% will net you enough in interest to cover your dues on the other contract, leaving the principal untouched.

At today's prices, it's tough to turn DVC point renting into a money-making proposition.

 

[DVCconvert]

Xfactor-

I think that's a perfect valid approach! Only rental points (imho) should go about $10-$12, not $8).

Go for it is my view if you don't plan on using the points. A DVC membership shouldn't be looked at as a profit venture, but there's no reason you can't /shouldn't beable to reduce your ownership expense in this fashion!

 

[Mark099]

Why have so many points?

 

[senecabeach]

forget it..

 

[CarolMN]

It will take time and effort on your part to rent the points and there is some risk involved (although you can minimize it if you are smart about how you rent).

Posts on this forum make renting seem to be quick and easy. Sometimes it is. Sometimes it is not easy and not quick. Sometimes it is a royal pain.

Personally, I agree with tjkraz - there are better ways to invest your $$.

Best wishes-

 

[AFMom]

We REALLY wanted to add on - had 100 points and wanted 150 more. Some years we were really going to need the extra points and didn't want to have to rent from someone else - while other years the 100 was going to be plenty. What we decided was to do the add-on now before points got even more expensive, and rent the extra out to help off-set the costs on years we couldn't use them. Yes - there are better ways to invest - but we know that there will be plenty of years (especially while we are living in FL) that we will need all 250! The more points will give us the wiggle room for longer vacations, or bigger accomodations for families joining us - and we just didn't see a downfall to this. We've already rented 3 times on the DIS rent/trade boards, and transferred to another member as well (couldn't use the extra points for this use year we recieved with our SSR add-on). All the rentals and transfers went smoothly and easily. Everyone was great to work with, very friendly, and the non-dvc members were happy to have a chance to stay at a DVC unit for a great cost.
There is some leg work when you rent to a non-member, transfers can be a bit easier, but I've never felt it was all that difficult, and we've always been able to rent at $10pp within a day or two of posting our points available.
Obviously this all could change for some reason or another - I won't even try to speculate why - and we wouldn't do it if we couldn't afford to handle it on our own without renting any points - but the option to rent has certainly made this a win-win situation for us and the renters wanting to save money on great accomodations!

 

[melanie18]

I rented out 110 points this year for the 1st time (we have 230 total). It's definitely something I would do again to help cover the annual dues. I actually called DVC and pre-paid my 2006 dues (that money was burning a hole in my pocket ).

 

[tjkraz]

I don't think there's anything wrong with the occasional rental, but it just doesn't make sense to buy more points than one will use on a consistent basis. If it's a case of occasionally needing MORE points, I think one is better off buying less and renting the additional points when needed.

I hardly ever visit the rent/trade board, but was just there and am shocked by the number of people advertising their points for $9.00 - $9.50 each. While I'm sure many people get more than that per point, it really appears to be a buyer's market.

 

[Cruelladeville]

Actually, I haven't found that to be true. Perhaps because I have a lot of posts, and because I am a DIS supporter, I had many, many people contact me for points. I bought a 270 pt contract this year, which had banked pts that had to be used or lost, so I rented them. I ended up renting those to 4 people who had rented from me three years ago! If I had had another 1000 pts, I could have rented them. Two people were looking for enough points for a grande villa! I ended up making over $7000,, which is 1/3 of the cost of the 270 pt contract, and I was amazed that it was that easy. Someone mentioned somewhere on the DIS board that I had rented points before, and that's all it took to rent those points. If you like talking to other members, it's a fun way to get to know them--and they will contact you again and again if they need points.

 

[dianeschlicht]

I see no problem with folks renting out a few extra points if they have them, but specifically buying extra points to rent seems like a business to me, and that is not allowed by DVC. I also feel that when you rent points at $10 or less per point, you devalue the DVC accommodations. Why should DVC rooms cost less than Pop or All Stars?

 

[Y-ASK]

You could, but I can think of a lot of better things to do with your money. My guess is you're paying around $17k for the 200-pt contract. An investment as simple as a CD earning 4% will net you enough in interest to cover your dues on the other contract, leaving the principal untouched.

At today's prices, it's tough to turn DVC point renting into a money-making proposition.

While this may be true, you would still need to tie up the principal within the CD, not that that is a bad thing. As far as money-making, I would never consider a DVC Timeshare as an investment but if I wanted to do a comparision... Let's consider this:

Purchase a resale like the one I just grabbed for this example:
$11,250.00 OKW 150 Pts per year with 50 Pts current, 150 coming Sept. 06

Say the resale cost you $12,000.00 total after Maint. Fee and Closing Cost. If you invested that money in a CD earning 4% for 8 years, the total sitting in your account after 8 years would be $16,516.74.

Now let's say your goal with the DVC is investment only. You rent all of your points every year at $10 per point the 1st four year and $11 per point the last four years (total eight years). After paying the yearly maintenance fee (including a 5% increase each year) and investing your remaining earnings each year into the same 4% CD your total earnings would be $9,202.24. After eight years you decide to sell your timeshare and even then if you only take away $10,000.00 for the 150 Pt contract at that point in time your total earnings would be $19,202.24 which is $2,686.00 more than if you just put the principle in 4% CD.

Now I probably would take a little more risk with the money earned from renting the points but that's just me .

Y-ASK

Oh forgot the most important part, if you're wife and kids get wind that you own a DVC timeshare forget about ever seeing a penny of your so called investment .

 

[tjkraz]

Y-ASK:

Note that I did say that it's "tough" to make money renting points, not impossible.

OP was asking about a VWL contract which is apparently going to be used to subsidize ownership of a BWV contract. I guarantee the VWL points cost more than the $75 per point from your OKW example, and the dues are already 13% more in 2005.

I'm certain that there are ways to make money renting, but it's still not a very high ceiling venture. Rental prices are pretty consistent (within a dollar or two each way), even with tourism at very high levels today. What troubles me the most is that point rental prices really haven't changed much over the 3+ years that I've been following it.

I paid $10 per point to rent in 2002 and you can find people willing to rent for that price (or LESS) today. Meanwhile dues at OKW have gone up 20% in that 3-year span.

When the next terrorist scare or economic downturn occurs, how low will renters have to go in order to find someone willing to take their points? Renting is a buyer's market.

I have no objections to occasional rentals. But I think that there are better things to do with one's money than to buy a contract today with the sole intent being to rent the points until some undetermined point.

 

[Y-ASK]

Yep tjkraz! I agree with you. Guess I had a slow day at work with not much to do . That's the problem with the rental market you can never know if there will be renters to rent points in the future so it's a crap shoot at best. Buy the points you want to use and if you have any money left over invest wisely some place else.

Y-ASK