Renting Points

[howardlee2]

I am an OKW veteran (since 1994)! New to this renting thing, didn't even know it was "legal"! i am curious as to how you people have come to value your points between the 8 and 11 dollar range that seems to prevail here? Also, are there other point renting boards around?

 

[nuthut]

Hi Howardlee

If you are intersted in renting your points. I would suggest an alternative to this board loie ebay or your friends, etc. This board has to many persons unloading thier points at subpar value, many for good reasons like expirations of points, holding, etc. I have recieved 12.50 a point and up to $23 a point using other means. It's your investment, so take all this info and do as you please.

 

[DBorges]

Ok question I have be told here that iI charge to much for my points

 

[~Magical Princess~]

IMHO fair point price - $8 - $9 that's all. Better off with codes or AP rates if you were to pay any higher! As far as the investment thing goes, the points have a value of somewhere between $5 - $6 (taking into consideration the 40 year thing, dues, purchase price etc). Again, jmho. I think those who "claim" they rent points extremely high on ebay might not be legit .. but who knows.

 

[DisneyKidds]

Ah, the ongoing debate over a fair price per point. All I have to say is that there is probably a reason why the price on this board has migrated to $10 on average - it is fair. I think those who claim $7- $9 as fair and anything over is overpaying are somewhat mistaken. You can not do better than $10 a point ($120 to $150 a night for a VWL studio and less for BWV std view, depending on season)using a code for a weeknight. Weekends are a different story.

As for ebay - I recently had some points to rent. In looking at ebay it looks like it is a stretch to get more than $550 for 5 nights sun - thurs in an OKW studio. By the time you figure in ebay fees and the time you spend listing the auction you don't get much more than $10 a point. I have seen auctions for BWV during prime seasons go for bigger dollars, so perhaps you can do better. I feel bad for the fool who bought an auction ressie and paid $23 a point, though. I've seen too many auctions not meet the reserve price. You pay ebay fees, don't sell anything, and waste your time. I guess it can be hit or miss selling on ebay. Haven't actually done it so I don't know for sure - just what I have observed. If you list points here at $10 you will rent them without much trouble - and I like easy (even if it comes at marginal cost). Anyway - when I rent it is to have an outlet for points I can't use - not a steady source of revenue.

 

[wdwendyd]

Here is a link to a yahoo group that is for selling or renting out DVC points:
http://groups.yahoo.com/group/dvcrent/
Good luck!

 

[RickW]

Originally posted by ~Magical Princess~
As far as the investment thing goes, the points have a value of somewhere between $5 - $6 (taking into consideration the 40 year thing, dues, purchase price etc). .

This may be true for someone who bought at OKW 8 years ago, but a new purchase (say at the Beach Club) will be much different.

A person purchasing a new contract will be buying a $70 per point (including the $5 off incentive).

If we take into account the time value of money, using a very conservative 4% interest rate, this will cost $3.54 per point per year. (You can get this value in Excel using this formula: =PMT(0.04,40,70,0,0) )

Add to this value the $3.77 per point maintenence and you get $7.31. (BTW, a BWV resale at $60 per point would give a value of $6.95 with this formula)

About the only way you can get to "$5-$6" is by assuming 0% interest on the money you are putting into DVC. ($70 per point for 40 years with no interest is $1.75. Added to the $3.77 in maintence, you get $5.52)

I personally don't think using an interest rate of 8% is unreasonable, since this is the rate my financial advisor uses to estimate the long term returns on my retirement investments. Using the above formula with 8%, you get a value of $9.64.

BTW, none of this really matters, since people should try to get the best deal they can. If someone can rent for $5 a point, or if an owner can get $20 a point, well, it's a free market.

 

[WDWguru]

Originally posted by RickW
BTW, none of this really matters, since people should try to get the best deal they can. If someone can rent for $5 a point, or if an owner can get $20 a point, well, it's a free market.

My thoughts EXACTLY! The "fair" price is what the market will pay. If people out there are willing to spend $15 or $20 or more per point then it is obviously worth it to them.

 

[dbkelly]

Thank you Rick W for your wonderful analysis. I am not sure how many people actually understood your analysis. I usually just chuckle at people who try to comment on the value of an investment without taking an analytical approach. The time value of money is a tough concept to understand.