Renting Points

[browniemtb]

Man. oh, man, Brownie. What are you waiting for? Do you really think this person will come through with a check? I'd post that reservation in a heartbeat - today - or cancel it by e-mail to MS and follow up on Tuesday with a call.

Finally received an email from the renter. She states that she called her bank and the check hasn't cleared....of course not I never received it. The Tuesday dealine is still on....she's apparently going to do a stop payment issue a new check and overnight it. Makes me wonder if there was a check ever sent?? The blank is flying.....
Brownie

 

[dianeschlicht]

Finally received an email from the renter. She states that she called her bank and the check hasn't cleared....of course not I never received it. The Tuesday dealine is still on....she's apparently going to do a stop payment issue a new check and overnight it. Makes me wonder if there was a check ever sent?? The blank is flying.....
Brownie

This time, be sure you stick to your TUESDAY deadline, and when the check is not in your mailbox, cancel that reservation so you can get on with renting to someone who can pay. The "check is in the mail" is the oldest dodge in the book.

 

[phyllisnnj]

Imagine what travel agents goes through on a daily basis.

 

[CALNEVA DISNEYFANS]

People who nickle and dime you to death give you the most problems. I once advertised my points to the "best offer". Never again. I want $10 point or more, I take Paypal only if buyer pays add fee. I don't think its worth selling below $10, I wish more people asked for $11, I'd be right there!

 

[browniemtb]

People who nickle and dime you to death give you the most problems. I once advertised my points to the "best offer". Never again. I want $10 point or more, I take Paypal only if buyer pays add fee. I don't think its worth selling below $10, I wish more people asked for $11, I'd be right there!

Thats really where it should be, $11 to $12 per point. Even at that rate the renter is getting a great deal. These $8 and $9 points don't really make sense. Make $10 a distress price.
Brownie

 

[greenban]

I think this may be the problem. But then again why should this be my problem. They made contact and reserved the points. They should pony up the deposit under terms and wait for their money back from family.....Never again......no deposit in 7 to 10 days after confirmation the ressie gets cancelled. Hope this isn't to harsh but I tied up a lot of BWV points for 30 days. Come tuesday I may just post the ressie dates and see if anyone would like it.....2 bedroom preferred @BWV.
Brownie

I'll gladly take the ressie.....


Just a request or two....

1) Can you lower the price to $9.00 pp, as these points are 'used' from your first renter?

2) I'd really like a Standard view, if possible.....

3) Can we arrive 1 day earlier?

-Tony


KIDDING FOLKS! Just a little satire, be gentle with the flames!

 

[crisi]

I'll gladly take the ressie.....


Just a request or two....

1) Can you lower the price to $9.00 pp, as these points are 'used' from your first renter?

2) I'd really like a Standard view, if possible.....

3) Can we arrive 1 day earlier?

-Tony


KIDDING FOLKS! Just a little satire, be gentle with the flames!

You forgot:

I absolutely need non smoking

My standard view should have a fireworks view - high floor.

Can you send me your blue DVC member card - I understand I might need it to get member perks.

 

[DisFamily2006]

How difficult is it to just transfer to exisiting members? I guess the member transfer market is much smaller than the rental market????

 

[browniemtb]

You guys are killing me........
Brownie

 

[SueOKW]

How difficult is it to just transfer to exisiting members? I guess the member transfer market is much smaller than the rental market????

Piece of cake! My preference. I usually have to rent about 30 points every other year... and ALL of the people I've communicated with have been very nice.

What I found is that people are renting points that can't be transferred into my account.... (does that mean borrowed points? I think so..)
Historically, I have only rented points that can be transferred - no fuss no muss. In fact, I request that in the first communicaiton. The last time, though, the points owner "found out" after we made the deal that they couldn't be transferred. I decided to suck it up and have faith, and I admit I was nervous!

All was totally fine!!

 

[TDC Nala]

I use up all my points (heck, I borrow) and I don't rent them. But, if I did, I'd draw up a document to send to prospective renters that would cover price, making the reservation, deposit, payment terms, and what I would or would not be able to do for them if they had to cancel. If they didn't agree, they could look to rent someone else's points.

 

[LongIslandCouple]

OK all,

I know I'll probably get flamed for this, but here goes.

I am not a DVC member, though will probably purchase a resale within the next 24 months.

I did not know of the limited availability of studio standard view rooms. For me, when I read "standard" I assume that it's the norm and not the exception, therefore it would be easier to attain a ressie for a standard than preferred view. I made this honest mistake when looking for a rental just days ago and feel insulted when other feel I should have known that standard wasn't easily attainable.

As far as the negotiating on price, $10 per point may be a very generous rate for the renter, but it may very well be an even more generous rate for the rentee.

Let's assume I buy 150 points on resale @ $83 per point. The cost for this is $12,450. Over the course of the term, let's assume $4 per point for maintenance fees per year. This brings the total cost of ownership to $34,050.

$34,050 / 150 points / 36 years = $6.31 per point per year.

So if you were to rent your points for $9 per point, you'd be getting a 43% return on your investment. That's one heck of a return. I don't know of any investor that would be closed-minded to "only" receiving 43% per year as a return.

All that being said, I gladly rented from a DVC'er @ $10 per point for an upcoming stay. She was fantastic to deal with and the additional $56 I would have saved by looking for a $9 per point wasn't worth the aggrivation of bartering for the $$$.

I'm not telling you what to do with your money, but when I do purchase DVC, if I decide to rent, I'll let the economics of the decision determine what my price will be.

Thanks all, let the flaming begin.

 

[Johnnie Fedora]

OK all,

I know I'll probably get flamed for this, but here goes.

I am not a DVC member, though will probably purchase a resale within the next 24 months.

I did not know of the limited availability of studio standard view rooms. For me, when I read "standard" I assume that it's the norm and not the exception, therefore it would be easier to attain a ressie for a standard than preferred view. I made this honest mistake when looking for a rental just days ago and feel insulted when other feel I should have known that standard wasn't easily attainable.

As far as the negotiating on price, $10 per point may be a very generous rate for the renter, but it may very well be an even more generous rate for the rentee.

Let's assume I buy 150 points on resale @ $83 per point. The cost for this is $12,450. Over the course of the term, let's assume $4 per point for maintenance fees per year. This brings the total cost of ownership to $34,050.

$34,050 / 150 points / 36 years = $6.31 per point per year.

So if you were to rent your points for $9 per point, you'd be getting a 43% return on your investment. That's one heck of a return. I don't know of any investor that would be closed-minded to "only" receiving 43% per year as a return.

All that being said, I gladly rented from a DVC'er @ $10 per point for an upcoming stay. She was fantastic to deal with and the additional $56 I would have saved by looking for a $9 per point wasn't worth the aggrivation of bartering for the $$$.

I'm not telling you what to do with your money, but when I do purchase DVC, if I decide to rent, I'll let the economics of the decision determine what my price will be.

Thanks all, let the flaming begin.

On the flip side, for an October stay, Disney rack rate for a BCV studio is $345. A Sun-Thurs night at BCV is 12 points thats $28.75 dollars/pt. From your example, using the same "investment cost" of $6.31/pt, that makes Disney's profit 356%

I know a lot of investors that would be close minded to only receiving a 43% return on their investment while a fellow investor received 356%.

 

[LisaS]

As far as the negotiating on price, $10 per point may be a very generous rate for the renter, but it may very well be an even more generous rate for the rentee.

Let's assume I buy 150 points on resale @ $83 per point. The cost for this is $12,450. Over the course of the term, let's assume $4 per point for maintenance fees per year. This brings the total cost of ownership to $34,050.

$34,050 / 150 points / 36 years = $6.31 per point per year.

A couple of comments on your calculations:

- If you purchase resale, you need to add in $500 in closing costs.

- $4/point for 2006 annual dues only applies to SSR. A lot of people renting points want to stay at resorts such as BCV, BWV, VWL where the dues are higher. For example, dues at BWV are $4.69, BCV: $4.48, VWL: $4.61, so $4.50 is probably a more representative figure than $4.00.

- Dues go up on average 4% per year and since dues are by far the largest part of the total cost of ownership, you have to take that annual increase into account.

So, updating your calculations:

Purchase 150 points resale at $83/pt + closing costs = $12,950
Dues @ $4.50/pt in 2006, 4% annual increase, grand total: $52,378.86
Total cost of ownership: $65,328.86

$65,628.86 / 150 points / 36 years = $12.10 per point per year.

 

[LongIslandCouple]

So, updating your calculations:

Purchase 150 points resale at $83/pt + closing costs = $12,950
Dues @ $4.50/pt in 2006, 4% annual increase, grand total: $52,378.86
Total cost of ownership: $65,328.86

$65,628.86 / 150 points / 36 years = $12.10 per point per year.

I find it highly unlikely that in 36 years the maintenance fees will be $17.75 per point and that's what it would take to get to the $52k that you suppose in "my numbers". If anyone did pay almost $18 per point in 2042, they would obviously be fools to rent them for half that price.

In my analysis, I used only present day value, because it equates to present day money. To use future values but to equate it to present day money is a mathematical inequity and thus holds no real truth.

What could be bought for $9 in 1970, surely can't be bought for the same $9 today and what can be bought for $9 in 2006 won't be bought for $9 in 2042.

 

[patsal]

I find it highly unlikely that in 36 years the maintenance fees will be $17.75 per point and that's what it would take to get to the $52k that you suppose in "my numbers". If anyone did pay almost $18 per point in 2042, they would obviously be fools to rent them for half that price.

In my analysis, I used only present day value, because it equates to present day money. To use future values but to equate it to present day money is a mathematical inequity and thus holds no real truth.

What could be bought for $9 in 1970, surely can't be bought for the same $9 today and what can be bought for $9 in 2006 won't be bought for $9 in 2042.

Yet, still there is a flaw in the math as base points price increases, the $83 per point will quickly become a thing of the past. To continue to rent points at 1990's prices is just not going to be feasible.

 

[crisi]

I think the biggest thing you are ignoring is the time value of money. The owner renting to you has likely tied up in excess of $10,000 in points.

The second thing you are missing is the value of those points to the owner to do other things with - like cruise - that value is more around $9 a point - sometimes better, sometimes worse, depending on the non DVC option. My points also have value to friends and relatives - and before I make a small profit on a stranger, I'll make no profit on a friend.

The third thing you are missing is that the owners time has value. Many renters look for small rentals - 50 points or less. The time it takes to talk to potential renters, explain the terms, make calls to member services, deal with a contract, and handle two checks for payment doesn't really sound worth the small margin of $2 a point (but I consider my time more valuable than others).

The forth thing you are missing is that there is substantial risk to the owner. You may not make that last payment in time for them to re-rent their points before the end of the use year. You could trash the room and Disney could come after the owner for compensation. We've even had a member held responsible for room charges her brother made - eventually it was worked out with accounting - but member's can't kid themselves that this is riskless.

The last thing you are missing is that most DVC owners who are renting points aren't in business to do so - a few are. But most of the people renting are getting rid of extra points. In many cases, times have gotten tough and they are renting in lieu of the additional expense of a vacation this year. Its tough to be renting points to make ends meet, and then be expected to undercut a BCV room rate by hundreds of dollars.

 

[robinb]

I find it highly unlikely that in 36 years the maintenance fees will be $17.75 per point and that's what it would take to get to the $52k that you suppose in "my numbers".

http://personalpages.tds.net/~rb/DIS/DVC/DVCDuesHistory.htm

Read it and weep. The average of a 3.5% - 4% yearly increase is dead-on.

 

[my4kids]

On the flip side, for an October stay, Disney rack rate for a BCV studio is $345. A Sun-Thurs night at BCV is 12 points thats $28.75 dollars/pt. From your example, using the same "investment cost" of $6.31/pt, that makes Disney's profit 356%

I know a lot of investors that would be close minded to only receiving a 43% return on their investment while a fellow investor received 356%.

Ok, but you aren't Disney...
I apologize for being redundant, since I just posted this same thing on the DVC Planning Board on the "What the heck is going on?" thread, but I'll add it here too...

You can not compare the savings over rack rate to the rental price. $10 a point IS a great deal over rack rate....but if the per point price was $12-$15 I would say "thanks but no thanks" and pay rack for smaller accomadations through Disney. People who pay rack for villas have enough money to do so and aren't going to go to the trouble to rent points, assume risk etc. The market for renting points is in the people who can afford mod and value, but are willing to go to a little more trouble to get more bang for their buck...I think if you want to work the math based on percentage savings over rack, you need to compare what these people are paying at a mod. I could still pay rack at POR and save money through Disney over renting points for a 2 BR villa to fit my family. (OK we would be squeezed in the room with a shoe horn), but if I'm saving enough, I'll do it...we are never in the room anyway, I don't need a kitchen on vacation. Don't get me wrong, I love the villas, I just don't love them enough to pay rack or even close to rack for them.

I just think that the market determines the price....if the risks involved and the product were truly worth $15 a point then renters would be bidding that for points to get an advantage over others looking to rent at the same time. You just don't see that happening. It might happen in the future...but I think anyone wanting $12 or over is going to have a hard time unloading their points. If you need to unload them, you need to unload them. Also, the time value thing doesn't really bear any weight with a renter....if it is so troubling for you to rent out your points than don't rent them out. (OH _ but you NEED to rent them out to pay for a cruise?) Let's not forget that renters are doing a huge service to the members as well.

Also, let us not forget that the market rate for DVC members to have points tranferred into their acct is currently between $9 and $11, so members have the same good fortune on buying points.

It's all good.

 

[LongIslandCouple]

http://personalpages.tds.net/~rb/DIS/DVC/DVCDuesHistory.htm

Read it and weep. The average of a 3.5% - 4% yearly increase is dead-on.

Sorry, but you are wrong. You are looking and seeing rate increases of 3% or more in a great number of years, but the years where there were no increase or negative increase greatly impact the "average".

1996 - BWV - $3.70 per point
2006 - BWV - $4.69 per point

If it had averaged a 3.5% to 4% increase each year, it would be more than it currently is. In fact, a 3.5% annual increase would already have it up to $5.22 and a 4% annual increase have it at $5.48.

The average rate of actual increase is 2.4% per year.

1996 $3.70
1997 $3.79 1996 plus 2.4%
1998 $3.88 1997 plus 2.4%
1999 $3.97 1998 plus 2.4%
2000 $4.07 1999 plus 2.4%
2001 $4.17 2000 plus 2.4%
2002 $4.27 2001 plus 2.4%
2003 $4.37 2002 plus 2.4%
2004 $4.47 2003 plus 2.4%
2005 $4.58 2004 plus 2.4%
2006 $4.69 2005 plus 2.4%

If you extrapolate that out to 2042, the maintenace fees would be only $11 per point, only 2/3rds of the originally predicted $17.

I agree that there are other factors that should go into pricing. The time a DVC'er takes to make the ressies and risk factors should also be taken into account.

However, I think if you asked most DVC'ers if they have experienced an average rate increase of 3.5% to 4% in their maintenance fees, the majority would agree because that is the conventional wisdom. In truth, the numbers bear to significantly less...