Renting out points??

[ACJT]

I'm considering buying into DVC. I have wondered about buying extra points and renting them out as a way to supplement the annual dues. At what point will DVC stop a member from doing this ? Could I rent out a portion of my points every year.? Is this a flawed concept?

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[Deb & Bill]

I'm considering buying into DVC. I have wondered about buying extra points and renting them out as a way to supplement the annual dues. At what point will DVC stop a member from doing this ? Could I rent out a portion of my points every year.? Is this a flawed concept?

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Currently DVC allows members to make an occasional rental. But commercial renting is prohibited. However, they don't have a clear definition of what is commercial. And every year, they come up with a way to make renting points more difficult. Just buy the points you can use.

 

[ACJT]

How have they made more difficult to rent ?

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[Deb & Bill]

How have they made more difficult to rent ?

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In the old days, members could have as many associates as they wanted and one person could be an associate member on many contracts. DVC limited that to four per year. David's old mode of making reservations was to have the member make him an associate member on their contract. He made the reservation and any other legwork for the member.

At one point, you could transfer in or out as many times a year as you wanted. They reverted back to the old days where you are limited to one transfer in or out per year.

DVC started to track members who made multiple reservations to people with different names and shut down some frequent renters.

 

[ACJT]

So they have no hard and fast rule then so long as it's not an annual occurrence ?

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[DVC Dude]

I'm considering buying into DVC. I have wondered about buying extra points and renting them out as a way to supplement the annual dues. At what point will DVC stop a member from doing this ? Could I rent out a portion of my points every year.? Is this a flawed concept?

First rule of renting - thou shall not finance a DVC purchase to rent. In other words, buy only the most amount of points that you can pay cash for because the timeshare interest rates are outrageously high.

The magic number seems to be to stay less than 20 reservations per contract in one year, but I have never heard of any DVC member that actually had a problem as a result of renting their points.

To answer your questions directly (and the answers can always change depending on if and when Disney changes the rules) - You can always buy more points than you need and rent them in a variety of methods and venues, but I would urge caution with this plan as there are risks and hassles than may ruin your fun and cash flow. I can only tell you that some people enjoy renting points and some people hate it as it really depends on your own individual personality.

I would discourage you from thinking DVC point rental is some magic investment that will beat stocks, bonds, CDs, real estate, annuity, etc. You are WAY better to NOT think of DVC as a cash cow and simple a pre-paid discounted vacation.

If you are really set on buying more points to rent, then one of the better strategies seems to be buy 2x the points you want (or really need) and then rent 1/2 the points you own and then use that money to pay your annual dues. This will (technically) allow you to buy DVC and never pay out of pocket money for annual dues (in theory).

The monkey wrench is that most renters forget to account for the original investment costs and lost opportunity costs of that investment. When you do that, most people find renting points is not that great an investment.

On the other hand, if you can buy a really cheap resale unit, then it can pay for itself in about 8-10 years and the net cost after than is $0.

 

[crisi]

Note that renting points out isn't risk free. You can get stiffed and end up with wasted points. You can have a renter leave you with unpaid charges to the room - or damage to the room - which you would be responsible for. And your money is tied up in a timeshare, not known for being the worlds most liquid and stable asset. So while in theory it works, it wouldn't be the way I'd choose to offset dues. I'd buy the points I can afford dues on (and can afford the related travel expenses on) and if I still had money, I would invest it.

People have done it though.

 

[ACJT]

First rule of renting - thou shall not finance a DVC purchase to rent. In other words, buy only the most amount of points that you can pay cash for because the timeshare interest rates are outrageously high. The magic number seems to be to stay less than 20 reservations per contract in one year, but I have never heard of any DVC member that actually had a problem as a result of renting their points. To answer your questions directly (and the answers can always change depending on if and when Disney changes the rules) - You can always buy more points than you need and rent them in a variety of methods and venues, but I would urge caution with this plan as there are risks and hassles than may ruin your fun and cash flow. I can only tell you that some people enjoy renting points and some people hate it as it really depends on your own individual personality. I would discourage you from thinking DVC point rental is some magic investment that will beat stocks, bonds, CDs, real estate, annuity, etc. You are WAY better to NOT think of DVC as a cash cow and simple a pre-paid discounted vacation. If you are really set on buying more points to rent, then one of the better strategies seems to be buy 2x the points you want (or really need) and then rent 1/2 the points you own and then use that money to pay your annual dues. This will (technically) allow you to buy DVC and never pay out of pocket money for annual dues (in theory). The monkey wrench is that most renters forget to account for the original investment costs and lost opportunity costs of that investment. When you do that, most people find renting points is not that great an investment. On the other hand, if you can buy a really cheap resale unit, then it can pay for itself in about 8-10 years and the net cost after than is $0.

The buy 2x what's needed was kinda my thinking?? Love to here the experience of those that may have done this. Dealing with people, arranging a rental etc isn't a bother to me.

Wouldn't the renter take responsibility for incidentals etc. as they'd give their credit card at check-in. Or. Does DVC not work that way?

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[Deb & Bill]

The buy 2x what's needed was kinda my thinking?? Love to here the experience of those that may have done this. Dealing with people, arranging a rental etc isn't a bother to me.

Wouldn't the renter take responsibility for incidentals etc. as they'd give their credit card at check-in. Or. Does DVC not work that way?

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There have been a couple of reports where the guest's card was not charged and the member was stuck with the bill. Also, any damage done by the guest is your responsibility. And if the guest is used to getting upgrades and asks if they might have an upgrade, your points might be used for the guest's upgrade since DVC doesn't do free upgrades for points stays.

One more thing, if you rent the points yourself, be prepared for lookyloos who seek you out, you find them the reservation, then want you to lower the price or they find someone else to book with.

 

[ACJT]

So does dealing with the likes of David's rental reduce the risks?

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[bobbiwoz]

So does dealing with the likes of David's rental reduce the risks?

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I think so. If I rented, I would do it through him, but I have never rented. I directed a friend to rent though David and she was very pleased! She had been my guest at BWV, and just knew she wanted to stay there with her family.

 

[DVC Dude]

The buy 2x what's needed was kinda my thinking?? Love to here the experience of those that may have done this. Dealing with people, arranging a rental etc isn't a bother to me.

It all depends on what resort you buy and how much you pay.

Buying VGF at $150pp and paying $4.51 dues and renting for $13pp is not such a great deal. In theory, every year the resale price should drop $3 ($150 / 50 years) but it never follows that pattern exactly.

Buying SSR under $60 would be a better deal in terms of ROI

 

[Dean]

I'm considering buying into DVC. I have wondered about buying extra points and renting them out as a way to supplement the annual dues. At what point will DVC stop a member from doing this ? Could I rent out a portion of my points every year.? Is this a flawed concept?

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IMO it is a flawed concept for most situations though there may be exceptions. I don't fee the return isn't worth the cost, work and risk. IF it were, why not buy thousands and rent them out rather than just a few and yes you can do that and stay clear of the commercial renting issue. As a disclaimer, I do rent my points most years but I got here by not really needing them as much as I used to and have hesitated selling them for several reasons. Situations that might be an exception for some would be where you're looking at a small need where such contracts are more expensive and you get a great deal on a somewhat larger contract or where already know you'll need more later as your family grows or other situations happen that can be planned. Once you hit about 150 points or so I'd rather see people underbuy than overbuy both in resort and number of points. Like any other purchase done for financial reasons, you'd make your money on the buy in based on price more than any other component so price and choices are critical for such a plan.

However, renting can be done with minimal risk and moderate effort if one chooses to do so.

 

[crisi]

So does dealing with the likes of David's rental reduce the risks?

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MAYBE. Its still your name on the contract with DVC, not David's, so if the charges don't go through or the room is damaged, you are still on the hook

David does demand payment in full at the time of the reservation - you get half up front and half when the reservation is completed - so that helps on the getting stiffed issue.

And David keeps the time wasters to a minimum. You don't get a bunch of shoppers through David, and he does the first check on availability, so you aren't chasing a BWV standard view at five months out for someone.

But the math really doesn't work out that well for the bother. You put $75 into points and pay $5 in dues. So getting $11 a point you are only making $6 in profit, it will take you 13 years to pay off your original investment - ignoring time value of money and the income taxes you are supposed to pay on the rental - both of which hit you on the profit side.

 

[Deb & Bill]

MAYBE. Its still your name on the contract with DVC, not David's, so if the charges don't go through or the room is damaged, you are still on the hook

David does demand payment in full at the time of the reservation - you get half up front and half when the reservation is completed - so that helps on the getting stiffed issue.

And David keeps the time wasters to a minimum. You don't get a bunch of shoppers through David, and he does the first check on availability, so you aren't chasing a BWV standard view at five months out for someone.

But the math really doesn't work out that well for the bother. You put $75 into points and pay $5 in dues. So getting $11 a point you are only making $6 in profit, it will take you 13 years to pay off your original investment - ignoring time value of money and the income taxes you are supposed to pay on the rental - both of which hit you on the profit side.

But you still have to call to make the reservation and another member who gets the message from David may beat you out for the rental. So just registering with David isn't all it takes.

 

[DVC Dude]

But the math really doesn't work out that well for the bother. You put $75 into points and pay $5 in dues. So getting $11 a point you are only making $6 in profit, it will take you 13 years to pay off your original investment - ignoring time value of money and the income taxes you are supposed to pay on the rental - both of which hit you on the profit side.

If the math does not work out well at $75pp for a resale contract, then what do you think about this rental plan with VGF $150 points (insert hair pulling Smilie)

But you still have to call to make the reservation and another member who gets the message from David may beat you out for the rental. So just registering with David isn't all it takes.

Any any other DVC member can beat you out also.

There is definitely a TIME investment in renting points no matter how you do it.

 

[Dean]

But you still have to call to make the reservation and another member who gets the message from David may beat you out for the rental. So just registering with David isn't all it takes.

You can make it online then change the name by email.

 

[conandrob240]

I bought about 2-3x the points I need each year and rent them out. In about 30 yrs, I will have paid for the initial investment and all the dues with my rentals meaning my own DVC trips to Disney every year for 40-50 yrs will have been free. You have to spreadsheet out the " profit" you need to make each year to pay for the initial investment & the dues. See if it is worth it for you. It isn't a way to get rich though, profit is small, lots of work and some risk. Although after a few years, I have a core group of 10 people I generally rent to repeatedly so risk lowers dramatically.

 

[crisi]

There is definitely a TIME investment in renting points no matter how you do it.

But working through a broker will reduce your time investment. David confirms with you that you will be the member making the reservation before you make it - so yeah, a few reservations will slip out from under you (I wouldn't try to get a F&W reservation unless I was committing to making it before the eleven month window opened) - but you can also choose the reservations that aren't likely to slip out from under you. Then its about ten minutes to fill out David's forms, and five to make the reservation and send the confirmation.

Which is one thing renters probably don't realize about this whole thing - members aren't off looking to be on the computer at 8am to walk a reservation for VAKL value rooms or BLT Standard view rooms for $11 a point. They can sit and wait until someone comes along looking for the savannah room or lake view. To the member, its the same amount of money, and less potential headache.

 

[DVC Dude]

I bought about 2-3x the points I need each year and rent them out. In about 30 yrs, I will have paid for the initial investment and all the dues with my rentals meaning my own DVC trips to Disney every year for 40-50 yrs will have been free. You have to spreadsheet out the " profit" you need to make each year to pay for the initial investment & the dues. See if it is worth it for you. It isn't a way to get rich though, profit is small, lots of work and some risk. Although after a few years, I have a core group of 10 people I generally rent to repeatedly so risk lowers dramatically.

Please post your buy in price, total points, annual dues, and number/price rented.

I would like to see how you define FREE as you are also forgetting about the lost opportunity costs of the original investment and possibly inflation, etc.

Sure, it is possible to spin the numbers to make it appear as free, but you really need to compare apples to apples.

The rate limiting step for most people is WHERE do they get the ADDITIONAL MONEY to by 2-3x the amount of points they need and if they finance, it is a much longer and less profitable plan.