Renting Points to pay for Dues...

[indigo]

Howdy,

We've come into a decent amount of money, not enough to live on, but enough to enhance our lifestyle. Since we're both Disney freaks, we've thought about joining the DVC. However, we don't earn a lot of money each year and are afraid the yearly dues will be too much for us. So we considered buying a large amount of points, then renting just enough of them each year to pay the dues.

If we wanted to travel to WDW 8-10 nights each year. How many points would we need to buy in order to have enough to rent enough to cover the dues.

Or am I just out in left field here?

 

[Deb & Bill]

Never buy points with the intent to rent. It may or may not happen. And Disney may decide that renting points is not permitted. Only buy the points you can afford. 150 is the minimum.

 

[jaysue]

Did you have a particular vacation time of the year in mind? There are "seasons" within DVC at WDW that mean different numbers of points needed.

Did you have a particular resort in mind?
2 of the 4 resorts have the same point chart (BCV/VWL)
1 has a mix (BWV)
1 is lower than the rest (OKW)

Did you have a particular size of accomodations in mind?
Studio/1BR/2BR/Grand Villa

Thanks
jaysue

 

[chris1gill]

Just from our personal experience, we find that 240 points gets us 10 nights checking in on a Sunday night in the off season (BW standard or OKW 1 Bedroom)... We have 300 points, so that gives us an extra 60 points to do with what we wish... Maybe in your situation this number might work for you?

 

[SlyHubby]

if you are looking to purchase a DVC membership with new found money that is enough to enhance your lifestyle, but are concerned about having enough money to be able to pay the annual dues, then you have not come into so much money and DVC should be one of the last things to be doing with that money. sorry to be so blunt, but I would suggest paying down all of your other non-tax-deductible debt (at a minimum), and then sticking the rest into savings. having the cushion of additional savings will go lots further toward piece of mind and securing your family's future than buying into DVC. if you lost your job(s) tomorrow, and had purchased a DVC membership with your new found money, would you still be in a fiancially stable situation? would you be able to live a year without income from a stable job? once you buy DVC, the money is gone and your annual dues are a liability (ie. additional expense) that you are going to be paying for the next 39 years.

why buy a large amount of points to begin with anyway? if you are so interested in DVC, buy 150, see how you like it, how far it goes, and then add-on if it really is a good deal for you. further, if you buy a "large" contract right off the bat, it will be more difficult to unload if you need to sell it in the future. it is well known that smaller contracts sell easier.

 

[Pa@okw95]

If dues are going to be a problem for you to pay then don't buy into DVC. I to do not want to be blunt either but DVC is not for people who do not have enough income so that they are troubled with the annual dues. In spite of what you read here, DVC and going to WDW is a very big expense not a savings like most will tell you here. I find myself going to WDW far more than I ever would have since joining DVC. Trips to WDW are expensive. You can stay at some nice condos just off campus for a little over $100 a night or stay at WDW for a little more in a regular hotel room if you look for the deals. Remember--GOING TO WDW IS NOT NECESSARY FOR A COMPLETE LIFE NOR DOES IT HAVE ANYTHING TO DO WITH BEING A GOOD PARENT.

 

[PamOKW]

Pa95 brings up a good point. Dues will not be your biggest expense. Travel expenses, ticket prices and food while there all have to be considered as well. I wouldn't buy more points than you'll use. If you own 150 points, that would be roughly $600 a year in dues. If you can't handle the $50 a month without worry then don't buy into DVC yet. If you want/need more points, then consider the dues cost before purchasing.

Many people think rental income is free and clear. It is not. You need to look into the tax ramifications and realize that you owe Uncle Sam a cut as well.

Back to the original question -- How many points? If you answer the questions JaySue posed, we can put you in the ballpark.

 

[Caskbill]

No one has actually answered your question. I did some calculations and the absolutely 'cheapest' you can get by with is the 150 Disney minimum purchase.

This will give you 8-days in an OKW studio in Adventure season for 88 points, leaving 62 points to rent out. Assuming you could rent them OK and get $10/point that would give you $620 rental. After paying income taxes on the rental income, you would be close to the approximately $600 annual fees for those points (Assuming you purchased at BCV. If you could find a 150 point OKW resale it would help as dues are lower).

150 points from Disney is $12,600. Annual fees are about $600 a year, or $50/month if you have the fees automatically deducted from your banking account.

Remember Adventure Season and OKW resort are the absolute minimums for DVC stays. Adventure season is January, September and the 1st two weeks of December. At OKW this is 8-points per night weekdays, and 20 points/night weekends.

From there everything just goes up. At the other WDW DVC resorts those same 8-days in Adventure season range from 94 pts (BWV Std-view) to 116 points for all the others.

Step up to a 1-B/R and the four resorts go to 176 to 222 points for the 8-night stay.

Keep a 1-B/R and go in Magic Season instead and the points range from 240 to 300 for the 8 days.

So the IF's: If the $12,600 only takes part of your money and still leaves a substantial amount left over for other bills.

If you can afford to pay the $600 annual dues without having to rely on renting points.

If you would be happy staying in the lowest season, in the lowest accommodation (Studio), at OKW resort.

Then...Maybe it's OK for you. Only you know your other expenses and incomes. This would be the bare minimum.

If you're looking at staying in a 1-B/R for 10 nights at BCV for example, in Magic season, it's 360 points, you'd need to purchase about 700 points ($58,800) in order to have 340 points to rent each year (at $10 each for $3400) in order to have enough after paying income taxes on the $3400 to have the $2800 annual dues payment. Keep in mind there are no guarantees you'll be able to rent points every year.

Keep in mind this only gets you a place to stay. As mentioned, going to WDW is expensive. You also need to include travel, meals, park tickets. These things can add up big time very quickly.

Think carefully and be sure it's the right decision for you.

As for advice, I'd say that if you forget about the money you received, and in your current financial situation you could afford to buy the 150 point minimum and safely make the $600 in annual dues, all on your own without having to rent, then do that. You can always add on later.

150 points will get you 9-days in a Studio at any resort (OKW, BWV, VWL, BCV) during Adventure, Choice, or Dream seasons (which covers about 60% of the year).

 

[crisi]

Heres the catch with not being able to rent the points, you will need to pay dues on all your points and be completely caught up to use your points. So lets say you take Caskbill's suggestion for 700 points and need to pay $2800 in dues every year. You'll need to pay that $2800 on all your points in order to use any of them. So if a rental deal falls through, or the market is soft and you can't rent them, you'll still need to come up with $2800. And if you don't, before you can use the points the following year, you'll need to come up with two years worth of dues.

To me, this seems like a risky proposition.

 

[Caskbill]

Originally posted by crisi
So lets say you take Caskbill's suggestion for 700 points and need to pay $2800 in dues every year.

Crisi, I'm sure you didn't mean it that way, but that was not my <u>suggestion</u>. I was only presenting data for information. My actual suggestion for them was quite different.

Thanks

 

[Poorman]

After reading this thread, who wants to buy my points???

 

[crisi]

sorry, I was misusing the word suggestion. I should have used the word "scenario"

Though if I did have $60,000 in windfall money and was going to buy into DVC and willing to take the risk on renting points, (in other words, be someone completely different than who I am) I would go for the 700 points and have the ability to get a bigger unit and/ or stay at a higher point time of year. After all, you can never have too many points. And if it the scheme works, it should work just as well for 700 points as it will for 150 - there is just more risk involved.

 

[indigo]

Thanks for all your excellent responses. Trust me, we wouldn't spend $$$ on DVC unless we thought we could meet all our other fiscal responsibilities. We are remarkably debt free, which allows us to get by with realtively low incomes (compared to what we were used to). We practically spend all our disposable income on Disney right now anyway (frequent Disneyland trips) so it would just be a matter of visiting Disneyland a little less frequently to save for those airplane tix and food in Orlando.

One point someone brought up did concern me. It sounds like renting points is not always a sure thing. We have friends we like to travel to WDW with and could possibly get them to pay the yearly dues for the right to travel with us. Does anyone try this arrangement?

 

[Frozenfingers]

Originally posted by indigo
We have friends we like to travel to WDW with and could possibly get them to pay the yearly dues for the right to travel with us. Does anyone try this arrangement?

Hmmm, doesn't quite sound right, kinda UN-Disney ?

 

[Gillian]

I have a lot of friends who have paid their friends to use DVC points. Basically renting, but a little less formal than the agreements you see here (or on ebay). You may be able to work out some deals like that to help pay dues also.

And I don't see anything wrong with having your friends contribute to the cost of DVC if they travel with you. I would base the amount they pay on the current rental market, or the cost of your dues, whichever is less. But I don't think I would present it as " paying our dues."

 

[mikesmom]

Depends on your friends, but it might pan out better than renting. Sometimes renting works (I've done it once when we had an unexpected cancel). Other times it seems like the board goes through a phase when everyone who wants to rent isn't happy with a good deal, they need a really cheap deal. If you look over there now, you'll see one person who wants 5 nites in a 2 bdroom for $900. This is in mid December when sometimes we're lucky to get a room at all. The cheapest 2 bedroom at that time would be OKW at 118 points so basically they want it for $7.62.

Another person wants mid-November at $8 or $8.50 point. Another wants a Studio but will take a one bdr "if the price is right". This after they said in the first paragraph that there were NO vacancies the week they wanted. Some poster on the Resorts Board suggested someone who couldn't get rooms large enough for their family to try over on the rent board, and then suggested an idiotically low amount that the rooms would cost.

I know people have a perfect right to try for a bargain, but sometimes these offers are a little ludicrous. If you were in a position to really "need" to rent points to survive, that would put you in a very bad position as to your ability to rent for the price you need.

 

[Maistre Gracey]

Please keep in mind...

Let's put inflation of dues aside for a moment, and let's use Caskbill's example of 150 points (88 to use, 62 to rent).

The 62 points will cost $5208. If you banked that money, that would cover the cost of dues on the 88 points for almost 15 years.

I would think the interest of the $5208 would partially offset some of the inflation of the dues.

Granted, there is still 24 plus years that you would pay dues, but there would be no risk of not being able to rent the extra points.

Just an alternative thought...

PS- Because the use/rent ratio should remain the same, the 15 years would remain the same regardless of how many points you bought.

 

[Dean]

Don't buy with the idea of renting out the points, too many variables. I agree with the basic sentiment that you should only buy if you can comfortably afford the yearly dues and other trip expenses. It doesn't seem to me that you are convinced you can but tha's for you to decide. If you do decide to buy, I'd buy the minimum points that will do for you rather than buy extra. If you have money left over you've earmarked for DVC, put it away to pay the yearly dues (or part of it each year) for a while. Good luck.

 

[indigo]

Thanks again to everybody for the great comments. The idea about investing and paying the dues with the interest is good. The reason for investing in DVC would be that it saves us (and our friends we travel to WDW with) money in the long run. Guess we've got some numbers to crunch.