Renting out points??

[luckyman_apd]

I am satisfied if I would rent the additional points to cover what would amount to a $30k return on my $50k investment. The bottom line is that that $50k would not have sat in a mutual fund for 20 yrs, it would have gone towards trips. If I can rent enough to cover the entire capital investment plus each year's annual dues plus a little more to " realize" lost interest and I get to also go to Disney every year as part of that calculation, it is all good with me.

Listen....if you have money to put in a CD or mutual fund.....why would you pay it upfront to buy DVC to HOPE to cover your costs? IF you put in the Mutual Fund or CD....it's GUARANTEED to make you money to cover some of your costs. Buying more points just to cover costs could bite you in the rear. DVC is not an investment. It's a prepaid vacation plan....and you're hoping to rent for someone else's vacation to cover yours. There are plenty of ways to make money on your money to help cover your costs. Buying MORE points to rent out to cover your costs is among the worst bad ideas I've ever heard.

I buy disney gift cards at 5% off (or more if I get my buddy to get the for me). I use a rewards credit card to rack up rewards on stuff I buy anyway, so I put the money I would have spent directly towards dues. There are a ton of ways to bring the costs down, or invest money to pay it. Do what you will.....but renting and an investment will take a very...very long time to recover your initial amount. You also have to hope that your "rental price" keeps up with the hike in dues each year. And for a several years....$10 a point was what you could get.

 

[conandrob240]

A CD pays less than 1% a year. My DVC scenario works out far better than that. A mutual fund could pay well or it could not. Assuming a decent rate of return, IF I had put the entire 60k in and kept it there ( big if), yes, over the period, it would have probably paid better.

Again, I did not buy DVC as in investment. I bought it because I want to use it now with my family & friends and pass it on to 2 nephews and a niece in 25 yrs when i nomlonger go. But, it had to be at least a break even situation financially for me to be able to enjoy it and from that perspective, I have gotten out of it what I intended.

 

[Dean]

I did not necessarily buy DVC as an investment. I bought a lot of points at a good price in resale. I made an initial investment in cash of around $60k. The way I calculate it, and this is based very conservatively on $12 pp rental and renting 1/2 of my each year, at the end of the DVC ownership, my rental fees will have 100% covered my initial investment, all the maint fees plus yielded around $25k in my pocket. On top of that, I will have used or gifted to my family 1-2 Disney trips per year. To me, that math works out pretty good and I am satisfied with it. And it will probably work out to be more $ as I already have been renting at more like $13 pp lately and that will only go up.

Again, I am not getting rich off of this but I am happy with those figures.

Actually if you bought extra points specifically with the idea of renting points to pay for costs, including dues, you did buy DVC as an investment, at least that portion you bought extra for this intent. That you're happy with the outcome doesn't mean the numbers or choice are reasonable though they are your choice to make.

A CD pays less than 1% a year. My DVC scenario works out far better than that. A mutual fund could pay well or it could not. Assuming a decent rate of return, IF I had put the entire 60k in and kept it there ( big if), yes, over the period, it would have probably paid better.

Again, I did not buy DVC as in investment. I bought it because I want to use it now with my family & friends and pass it on to 2 nephews and a niece in 25 yrs when i nomlonger go. But, it had to be at least a break even situation financially for me to be able to enjoy it and from that perspective, I have gotten out of it what I intended.

CD rates are not applicable to such a long term scenario but mutual funds are over a 5-10 year or longer period and will almost certainly be guaranteed to do much better with reasonable choices and with better tax treatment. That one does not have the discipline to leave the investment alone is not a function of the discussion IMO just like using a W-4 for forced savings is a poor choice.

 

[DougEMG]

I've rented out quiet a few points and own extra points that I rent out in order to cover all of my MF. The only reason I even considered doing this at all was that my buyin costs averaged at about $32-$33 per point. What's funny is that with the high prices on resale right now I'm actually considering selling some points because I could make a nice little profit on them! So while I bought DVC in order to go on vacations, I end up treating it like an investment, the downside to which is that every time I book something For our family I think of it as costing me $13/point rather than the MF on those points.

Buying points at current resale prices in order to rent them out has too long a break even point and is thus too risky, I wouldn't be doing it.

 

[lodge]

So while I bought DVC in order to go on vacations, I end up treating it like an investment, the downside to which is that every time I book something For our family I think of it as costing me $13/point rather than the MF on those points. [\QUOTE] lol the troubles of wealth!