Renting Out Your Points

[Phillyfan]

I’m curious - which resort do you think is the best one for renting out your points? We’re considering buying some points that we plan on regularly renting. Thanks!

 

[Ruttangel]

The hottest rentals are going to be Crescent Lake and Seven Seas Lagoon resorts but in reality should be ok with Any WDW except OKW/SSR

 

[rspencer38]

It really isn't that difficult to rent any resorts. It will likely be easier to rent those mentioned above but lots of people rent out SSR/OKW/AKL etc... without any problems.

 

[cfox612]

We own at SSR (primarily to use) and had zero issues renting out this years points. Grand Californian or Beach Club would be the top 2 as they're the hardest to get at 7 months.

 

[RoseGold]

I would pick Poly for this. Good pricing all around for SAP (as opposed to BW/BC). Availability for studios is good. Renters want studios, and Poly has a whole lot of them.

Or, SSR and you make strategic reservations to sell as pre-booked.

 

[pianomanzano]

I personally wouldn't make a resort choice on what rents well, nor would I add points on for the purpose of regularly renting it out. But, you can't go wrong with any monorail or Epcot area resort as that's what renters most frequently request on FB groups. That being said, you can often get studios for some of those monorail ones and preferred view BWV studios most times of the year at 7 months.

go birds

 

[DavidMagic]

If your goal is to buy points for the sake of renting, it may not be worth to join DVC in all honesty. You have to pay regular income taxes on the rentals (much higher rate than long term capital gains) so you are likely better off investing the money in a more stable return that can produce at the long term cap gains rate.

That being said, if you aren't worried about maximizing your returns and just want a way to help offset the costs for the years you do use them, I would recommend SSR or Copper Creek. Those two currently have the best cost per point per year over the length of the contract which allows you to profit higher per rental.

 

[Brian Noble]

We’re considering buying some points that we plan on regularly renting.

Why do you want to do this?

Every time I look, the after-tax ROI on DVC rentals is comparable to (and sometimes less than) the expected long-term rate of return of a diversified low-fee stock index fund. Renting is also more work than the "set and forget" nature of buying that index fund.

 

[MsChristy12]

Personally, I wouldn't do it regularly. At the very beginning stage of my research, that idea also came across my mind. I could buy bigger contract (lower price per point) and just rent out what we don't use ourselves. But after a deeper dive and get a better understanding of DVC and realized that anything can change in a snap of a finger, I decided this idea wouldn't be favorable to us. Even at the thought of, when the economy goes into recession and I can't rent out my points, can I cover the MFs without any issues? That was my turning point to getting a smaller contract.

 

[MFMont]

I am so glad so many think the way they do. Remember though that there are many varieties for what people here have paid for their contracts that vary by a pretty big margin. I would certainly agree that the math does not work at all on a direct purchase ever. A fully loaded resale contract at certain resorts is a much different story. There are ROI’s out there that are far better than described in the above reply’s. That being said, there is work to renting your points out and some people can’t stand that work. I certainly can understand that point of view, however some of us enjoy it. Those that tell you that there is no scenario to make renting points lucrative, quite frankly don’t know what they are talking about. Like anything though there is certainly risk involved, potenrially a lot of risk. Don’t listen to me though, take a deep dive with a calculator and do all the math. Math does not lie. Start at the ROFR thread and see what is passing. Pay attention to use years and points left and if the banked points actually have any value. Do the math for different resort considering thier end dates as not all opportunities are the same. Resellers have a habit of listing points that are past banking windows or will be gone by closing. Then spend a bunch of time on the rental thread and rental group pages on FB. TBH, you should spend more time really understanding the ins and outs before you make an expensive decision vs. asking in this type of thread. There is plenty of information here. You just have to look for it. Make no mistake that there is a steep learning curve, but if done right, can be quite rewarding.

 

[AstroBlasters]

There was a YouTube video from a resale site this week and one of the hosts talked about how slow things are right now relative to past years on the rental side of the business.

Not a shortage of people willing to rent out their points, but a softness in demand.

 

[MFMont]

There was a YouTube video from a resale site this week and one of the hosts talked about how slow things are right now relative to past years on the rental side of the business.

Not a shortage of people willing to rent out their points, but a softness in demand.

Yes, because someone that is renting points for a living is certainly to be believed when they are talking “you” out of renting points (insert eye roll)……..What is slow right now is renting your points out at $21pp. Unfortunately for the resellers, they have all jumped into the game. They all have tons of overhead as the middle man. There will always be a spot between what they are offering owners and what they are renting the points for retail. I won’t disagree that that value is a moving target. I will say this, that last week, I listed 115 points for BWV. I was a little high in comparison to the present market. As soon as I lowered my price to $18pp, I don’t think it was more than 2 hours later that they were gone for $2,070. MF’s are an expense and this is 150 point contract that I purchase 12 years ago. I will pay taxes on a little more than $700 on this transaction. After renting the banked points for this contract back when I bought it, I paid just $31pp. I still have 35 points left to do what I want on this one. I presently own 820 points and adding about 500 more if ROFR stays dormant. At the end of the day, it is all about your cost to enter, not nearly as much on the present moments rental market. This time last year the numbers didn’t make nearly the sense that they do at present. I also dont think that the math is good enough if you finance as the ROI becomes much longer.

 

[Brian Noble]

There are ROI’s out there that are far better than described in the above reply’s.

To be more specific: when I wrote what I wrote above, I was referring to the "typical" resale purchase. Even there, it's hard to make it make sense vs. a much simpler investment strategy.

The big exception: buy-strip-flip. That is a much more lucrative strategy. But it is even more work.

 

[MFMont]

Why do you want to do this?

Every time I look, the after-tax ROI on DVC rentals is comparable to (and sometimes less than) the expected long-term rate of return of a diversified low-fee stock index fund. Renting is also more work than the "set and forget" nature of buying that index fund

I certainly agree with Brian here and I follow the same strategy in 80% of my portfolio. That being said, there are scenarios within DVC, that periodically appear, that outpace the stock market in a relatively short period of 7 to 10 years. From 2011 to 2022, there are scenarios where you could have made roughly 4 times your investment. Timing and knowledge are key however. If someone decided to employ Brian's strategy and plunked a million dollars covering the complete stock market in Nov. of 21' they would only be worth roughly $800k right now. Timing and your specific time horizon are super important with any investment. While there is little doubt that this period in the stock market is just a blip, the same can be said if you look back at the history of DVC.

I guess my point in soap boxing on this thread is that there are certainly fantastic opportunities here, but they are certainly advanced concepts. Most importantly, you need to enjoy the renting component yourself to make this worth your while.

 

[GoingSince1990]

By far the hottest rental at DVC Rental Store is BCV, where there are always multiple requests at full price (currently $18 per point), with VGC in second place.

 

[Brian Noble]

Timing is definitely important. The problem is that my Magic 8-ball is only right about half the time.

 

[MFMont]

The big exception: buy-strip-flip. That is a much more lucrative strategy. But it is even more work.

I missed your last sentence which i like. I employ a hybrid of this. Buy, strip, rent for years until you have reached your ROI, then flip.

 

[rnorwo1]

I missed your last sentence which i like. I employ a hybrid of this. Buy, strip, rent for years until you have reached your ROI, then flip.

What is this, if you don't mind me asking? Buy resale, rent the points until you earn the buying price back, and then.... sell?

We bought 2 50-point contracts 10 years ago for about $8,000 total. We have used the heck out of it and feel great that we have far exceeded the value of that $8k, especially at today's deluxe resort prices. We have slowed greatly on our trips with the kids being teens now and are thinking of selling, but then I think that maybe in a few more years we will start to have grandchildren and may want to use it then. So, perhaps renting points out instead may the best thing for us.

We own a commercial property and a short term rental (lake house), but I have never considered DVC to be a possible addition to the investment portfolio. Very intriguing idea!

 

[supersnoop]

Yes, because someone that is renting points for a living is certainly to be believed when they are talking “you” out of renting points (insert eye roll)

I think you may misunderstand where those people who are renting points for a living are getting their points from. The companies selling dvc and renting out dvc would love for you to buy contracts and then engage them to rent out your points. If they're the ones saying the market is soft, I don't think I'd eye-roll them.

 

[MFMont]

What is this, if you don't mind me asking? Buy resale, rent the points until you earn the buying price back, and then.... sell?

We bought 2 50-point contracts 10 years ago for about $8,000 total. We have used the heck out of it and feel great that we have far exceeded the value of that $8k, especially at today's deluxe resort prices. We have slowed greatly on our trips with the kids being teens now and are thinking of selling, but then I think that maybe in a few more years we will start to have grandchildren and may want to use it then. So, perhaps renting points out instead may the best thing for us.

We own a commercial property and a short term rental (lake house), but I have never considered DVC to be a possible addition to the investment portfolio. Very intriguing idea!

Yes, we have 300 BWV points that are family points for trips. We bought 150 of these many years ago. The contract was fully loaded and we didn't travel the first year we bought it. After renting the points in 48 hours after closing, the contract cost us $31pp. We have taken over twelve years of vacations off these points and really have not rented any after the first year because we go a few times per year. We picked up another 150 BWV points last year at a terrible time. We needed the points and the contract was fully loaded. It still made sense because of a big trip we are taking in a few weeks. This year the prices are way down. I have purchased 520 points at AKV so far for the sole purpose of renting them out. We will continue our trips for the foreseeable future and we will use somewhere around 200 points for those. We plan to retire in 7 to 10 years to FLA., so we will re-access down the road. This is just a small part of our overall portfolio so it is certainly not what I am hinging my retirement on. I agree this is not for everyone, but I am certainly comfortable with the plan regardless of what happens. Who knows what the future looks like but from my seat I see very little downside potential.