Standard Rate for Renting Points... and commercial/professional renters...

[keys2kingdom]

Well, I'm sorry if I offended anyone, but my opinion is the same: if this is not something that Disney would qualify as "commercial", I should have nothing to worry about with my relatively paltry amount of points and/or rentals, even if I choose to rent through ebay.

Certainly didn't offend me, I've often wondered why his site is still operating. Guess the DVC ::cop: haven't noticed him yet.

 

[dumbo71]

Hypothetical question about renting. Since the Concierge level rooms at AKV will be hard to come by do you think Disney will come down hard on people for renting points at peak times (like Christmas) knowing those reservations will be premium?

Just curious...

No, they are powerless to stop it. Unless someone is using copyrighted photos then they are safe.

Once again, to my knowledge, there has not been any enforcement to this point. The letters sent and emails about renting were nothing but a scare tactic. What was done and frankly it is all they can do is limit transfers.

If DVC can rent so can the membership.

I'd say three cheers for the $20 pp EBay lister. If they get it ,power to them.

 

[dumbo71]

Good ole Daddio right here on the DIS boards.

Yes Daddio has a great site. I consider that living proof that DVC is powerless to stop this stuff. Come on they can't find that but we can????

 

[Figment2]

M&C - banked points cannot be banked again so they would expire July 2007. In other words, the 2005 points banked to 2006 expire at the end of the 2006 use year (July 2007).

Cyn

 

[dumbo71]

I think anyone renting at AKV (before the new building is complete) risks getting squashed down flat to a couple of microns!

JMHO!

-Tony

Just curious why you feel that way?

 

[childsplay]

No, they are powerless to stop it. Unless someone is using copyrighted photos then they are safe.

Once again, to my knowledge, there has not been any enforcement to this point. The letters sent and emails about renting were nothing but a scare tactic. What was done and frankly it is all they can do is limit transfers.

If DVC can rent so can the membership.

I'd say three cheers for the $20 pp EBay lister. If they get it ,power to them.

I'm not sure I completely agree with this. We are in the very beginning stages of this senerio. Remember, DVC did little or nothing about this for years, so I see the letters more as an opening salvo rather than Disney's best and most agressive action. In my opinion we are not nearly far enough into this the determine if letters are DVC's only course of action, it is reasonable on Disney's part to allow time for people to digest the information they have been given before they move forward. I guess we'll just have to wait and see.

 

[dumbo71]

I'm not sure I completely agree with this. We are in the very beginning stages of this senerio. Remember, DVC did little or nothing about this for years, so I see the letters more as an opening salvo rather than Disney's best and most agressive action. In my opinion we are not nearly far enough into this the determine if letters are DVC's only course of action, it is reasonable on Disney's part to allow time for people to digest the information they have been given before they move forward. I guess we'll just have to wait and see.

This is completely reasonable and it is hard to disagree with. I think it is that fear that they are hoping will work.

I wonder from a legal standpoint if they can stop an owner from renting? I don't believe so. I've even spoken to my attorney about it and he said, "While you wouldn't want to spend the money to fight it, He saw nothing in the POS keeping owners from renting. He did point out, however, that transfers for money is strictly prohibited and that I should not even consider that. There is also some Timeshare laws and precendents there that tell me they canot stop it.

I got out for various reasons from renting but as I type this I plan to call my guide about AKV, I might be back in the game soon enough.

 

[kdzgon]

Yes Daddio has a great site. I consider that living proof that DVC is powerless to stop this stuff. Come on they can't find that but we can????

I agree - his site is very well done!

I haven't owned long enough to have a strong opinion on (or opposition to) large-scale renting, although that might change if I consistently find myself unable to book vacations for my choice of dates.

 

[squidmo]

I don't have a problem with point rentals (such as at Daddio's site, which is REALLY well done), because the reservations are being made for specific people who ARE going to be travelling on the reserved dates. But I do think it's unethical for rentors to book prime weeks (probably calling day-by-day), specifically in order to rent them out. In these cases they are holding reservations for phantom people, making it more difficult for real people with real vacation plans to get these prime dates.

 

[childsplay]

[QUOTE=dumbo71;17125404]This is completely reasonable and it is hard to disagree with. I think it is that fear that they are hoping will work.

I think that is a strong possibility.

I wonder from a legal standpoint if they can stop an owner from renting? I don't believe so. I've even spoken to my attorney about it and he said, "While you wouldn't want to spend the money to fight it,


And that has always been the reality of the issue for me. That at some point if Disney wants to press the issue it is going to end up costing the owner far more to try and fight them, especially when Disney introduces the IRS agent sitting next to them who is wondering why all this "rental income" has gone unreported.

It reminds me of a friend of mine who married into a family who owned a small autoparts plant which supplied items to one of the Big 3 in the auto industry. This was years ago when a new CEO took over and as a cost cutting measure he said they would have to renegotiate all their contracts with their suppliers, when he was reminded by my friends fathe-in-law that they already had a binding contract the CEO's answer was simple and direct..."Sue us, we have more lawyers than you have employees" The message was clear...and after consulting with his attorneys the father-in-law decided to renegotiate, they really had no choice even though they were in the right. To a certain extent I feel the same way about Disney when it comes to this issue, they are the 800 lb gorilla.

 

[Chuck S]

Personally, I think the problem may "self correct" with AKV and future resorts. As annual fees for AKV and CRV (if built) and the buy-in price will obviously be quite a bit higher than the previous resorts...there won't be as many owners willing to rent at those locations for $10, yet many older resort owner will still be doing OK in the $10 to $12 per point range...and naturally, most people tht rent point will go for the less expensive locations.

 

[dumbo71]

Personally, I think the problem may "self correct" with AKV and future resorts. As annual fees for AKV and CRV (if built) and the buy-in price will obviously be quite a bit higher than the previous resorts...there won't be as many owners willing to rent at those locations for $10, yet many older resort owner will still be doing OK in the $10 to $12 per point range...and naturally, most people tht rent point will go for the less expensive locations.

Chuck this is a great point. Those choosing to purchase and rent the more expensive resorts will be directly competing with owners of the cheaper resorts. Thanks for making that point.

 

[dumbo71]

And that has always been the reality of the issue for me. That at some point if Disney wants to press the issue it is going to end up costing the owner far more to try and fight them, especially when Disney introduces the IRS agent sitting next to them who is wondering why all this "rental income" has gone unreported.

Now that is an entirely different problem. My advice to ANYONE who rents is to declare that money as rental income. You do not want the IRS involved with this.

To a certain extent I feel the same way about Disney when it comes to this issue, they are the 800 lb gorilla.

Again I agree although I will say the courts seem to frowning down on these big comapnies just squashing the little guy.

My advice to anyone renting is this simple, declare all rental income and really keeep your eyes and ears open. Also do not use copyrtighted materials.

I've done digging and I've yet to uncover any true enforcement. Doesn't mean it won't happen, just hasn't to my knowledge.

 

[tubtruck]

At what point do people consider that it is renting for profit ?, If someone that had paid $91 for their points rented them out at$15 per point once and once only in the next 5 years It wouldnt have made a profit if I they then rented them out twice it still wouldnt have made a profit, if they have a loan that will have cost $1000s more than the cost of the points in fact if they had a 10 year loan on 250 points it would have cost an approximate extra of $14000 on the loan so the points cost would be 60% more, so the points would have cost in total before any maintenance a total of $151 per point. Assuming that the points were sold back to Disney they are presently offering around $56ish (assume they needed the money fast at some point, it can take ages to sell through resale) there would be a loss of around $95 per point, note any resale price in the future cannot be guaranteed) assume over the next 10 years an average maintenance of $5 per point per year it would mean if the points were rented out at $15 per point per year it would be an income of $10 per point per year therefore a total of 9 years to break even hardly a big profit spinner.
I know it is difficult to decide who is renting for profit and who is not but these figures show that its not so simple as to say he's charging a lot per point so is making a profit, other factors must be taken into account and as these are totaly private affairs of an individual it is almost impossible to say who is and who is not making a profit and who is merely breaking even.
If someone rents evry other year and cover their dues, are they making a profit ? At the end of the day what a person buys for and what they sell at is impossible to know.

 

[Dean]

At what point do people consider that it is renting for profit ?, If someone that had paid $91 for their points rented them out at$15 per point once and once only in the next 5 years It wouldnt have made a profit if I they then rented them out twice it still wouldnt have made a profit, if they have a loan that will have cost $1000s more than the cost of the points in fact if they had a 10 year loan on 250 points it would have cost an approximate extra of $14000 on the loan so the points cost would be 60% more, so the points would have cost in total before any maintenance a total of $151 per point. Assuming that the points were sold back to Disney they are presently offering around $56ish (assume they needed the money fast at some point, it can take ages to sell through resale) there would be a loss of around $95 per point, note any resale price in the future cannot be guaranteed) assume over the next 10 years an average maintenance of $5 per point per year it would mean if the points were rented out at $15 per point per year it would be an income of $10 per point per year therefore a total of 9 years to break even hardly a big profit spinner.
I know it is difficult to decide who is renting for profit and who is not but these figures show that its not so simple as to say he's charging a lot per point so is making a profit, other factors must be taken into account and as these are totaly private affairs of an individual it is almost impossible to say who is and who is not making a profit and who is merely breaking even.
If someone rents evry other year and cover their dues, are they making a profit ? At the end of the day what a person buys for and what they sell at is impossible to know.

Actually the profit itself has nothing to do with this issue. Anyone that wants to rent and lose money would be simply stupid, regardless of the reason they were renting. The issue is where to draw the line between the POS guaranteed ability to rent on your own vs a pattern of commercial usage. It is clear that to reasonably fit this definition one would have to rent a lot for at least several years to trigger this as a problem. My contention is that there is already a definition of sorts in the POS and that is the 2000/5000 limit on points owned, esp since it says something like to encourage for personal use in that sentence.

 

[childsplay]

I've done digging and I've yet to uncover any true enforcement. Doesn't mean it won't happen, just hasn't to my knowledge.

I appreciate your interest and investigation into this issue, please continue to post any addtional information you uncover. I go back and forth on this issue when I try and decide how serious Disney is about controlling some of this. I do agree with you however, that it is possible that the letters might be as far as Disney is willing to go. We'll have to wait and see.

 

[childsplay]

The issue is where to draw the line between the POS guaranteed ability to rent on your own vs a pattern of commercial usage.

That is exactly the issue at hand, few if any are arguing that renting is completely illegal, but rather does Disney have a right to put limits on rental activity. I have always fallen on the side that they do, where they decide to draw the line is up to them but I have always seen the "commercial activity" clause as a way to control extreme renting. I know others, many with much more experience than I have, interpret it differently I guess we'll see where DVC goes from here with some of the people renting 15- 20 times a year.

 

[tubtruck]

That is exactly the issue at hand, few if any are arguing that renting is completely illegal, but rather does Disney have a right to put limits on rental activity. I have always fallen on the side that they do, where they decide to draw the line is up to them but I have always seen the "commercial activity" clause as a way to control extreme renting. I know others, many with much more experience than I have, interpret it differently I guess we'll see where DVC goes from here with some of the people renting 15- 20 times a year.

The number of rents per year is also difficult to quantify as to if it is commercial or not, if looking at the rental board a lot of people only want to rent for a few nights or sometimes only one, which is commercial?, someone who makes 10 two night rentals in studios for different people or someone who makes 2 grand villa rentals for 3 nights?, the second would easily outstip the first in the number of points needed to rent.
If it Disney did put some sort of limits on the number of rentals all I could see happening is that the price per point for smaller shorter term rentals would increase substancially compared to larger point rentals for bigger properties or longer stays as people who rent would know how many times they could do so whilst staying under Disneys Radar and would only be interested in renting out small numbers of points once they had got rid of their vast majority for the year. Bear in mind a relativly small contract for someone with the intention of renting may be 500 points and potentially this would be good for over 60 days of renting during the week at off peak times in studios at OKW that is potentially 12, 5 day rentals yet the same number of points could easily be swallowed up in less than 5 days for a BCV rental of a GV at Christmas.

 

[Deb & Bill]

...Bear in mind a relativly small contract for someone with the intention of renting may be 500 points and potentially this would be good for over 60 days of renting during the week at off peak times in studios at OKW that is potentially 12, 5 day rentals yet the same number of points could easily be swallowed up in less than 5 days for a BCV rental of a GV at Christmas.

So the commerical renters have a GV at the BCV to rent out now, too???

 

[childsplay]

The number of rents per year is also difficult to quantify as to if it is commercial or not, Bear in mind a relativly small contract for someone with the intention of renting may be 500 points and potentially this would be good for over 60 days of renting during the week at off peak times in studios at OKW that is potentially 12, 5 day rentals yet the same number of points could easily be swallowed up in less than 5 days for a BWV rental of a GV at Christmas.

That is an excellent point, and highlights why this issue is so tricky. I would argue that is what is happening to a certain extent with transfers now on the Rent/Trade Board. With the new rule of only one transfer, those looking to unload are waiting for large transfer opportunities instead of being able to do five small ones. I could be wrong, but I still think number of rentals will have to play a factor at some point in the equation though.