The value of a DVC point in the rental market

[accm]

I have a friend who is planning on taking her family for her first trip early next year. Right now, she's planning on booking a 1 bedroom directly through Disney. With all the uncertainty around what even next month will look like right now, the extra $$ for being able to cancel it was worth it to her.

 

[Brian Noble]

A room in GF is not exactly comparable to the 1BR option.

No question. I did not get involved in time-sharing to stay in hotel rooms, even in the form of studios (a.k.a. "glorified hotel rooms").

However, most folks seeking a point rental are trying to save money on a good stay at WDW, and history shows that LOTS of people are happy with just a hotel room---including many DVC owners. Will a few be interested in this 1BR rental at this price? For sure there will be, and it only takes one. But it strikes me as very close to the upper limit of what one could possibly ask for that room---and that's probably the broker's strategy.

 

[sssteele]

My original buy-in plays 0% into renting ($50 pp ).
I’m just trying to offset my dues on points I can’t use.
Maybe if owners borrowed and were still making payments they might factor that in (cover the dues and some payments).

my buy-in payment is long gone and I’m not trying to do any “accounting” where I spread it across the years.

when we purchased we just hoped we wouldn’t lose too much money on a timeshare

We bought BCV in 2002 (not sure of the price per point). Have never rented out any of our points (BRV and AKV as well as BCV), but we might consider it in the future. We never considered losing money, but we could still sell any of those resorts for a nice profit.

 

[Yinn]

What determines the value of a DVC point in the rental market? I know the answer in a free market is typically "what the market will allow" or "what someone will pay for it", but it seems like it's artificially tied to something in this case, and I know there is a smart person here with the answer. From quick research, and please correct me if I'm wrong because finding numbers from 20 years ago is hard, it seems like DVC points rented out for $9 in 2002, rising about half a dollar a year to $12 in 2008, and when the real estate collapse happened, back down to $9, and then steadily back up about a dollar a year until 2020/early 2021 when it shot back down to $16, and now it's hovering around $19 or so. I did the math for room value like this:

Resort room (no DVC at that point) at Poly in 2003 was around $299 early October.
Villa studio at Poly today is around $790 early October.
I know a resort room doesn't equal villa, but for cash purposes I believe they are very close in price.

If we give each room an equal point value (24 points, a weekend night in early Oct), that means the resort room in 2003 could be had for $216 on rental points, a savings of 28%.
The villa studio at Poly today could be had for $456 on rental points, a savings of 43%.

This leads me to believe that the value of DVC rental points have not kept up with cash rates. Even taking into account the fact that Disney gives great discounts sometimes, they are still undervalued historically. Add to that the fact that Disney discounts are much fewer and far between now, DVC rental points value should have risen more quickly, but they haven't.

So I'm guessing 1) my math is wrong 2) I'm stupid, or a combination of 1+2, or maybe just 3) there is a glut of points keeping the value down, or 4) something I haven't thought of. I swear I don't work for a point rental company, but a family friend just bragged they saved almost 60% off room rates by renting DVC points, and it made me wonder why the discount is so deep when DVC points aren't cheap to buy anymore.

Factors in my view.
1) Disney sets the ultimate rental rate through their OTU points rental. That would essentially be the "max" rate.

2) Brokers set the secondary max limit with the rental rates. If an individual is to charge more than a broker, what do we offer instead?

3) Our dues set the ultimate floor for the rental rate. If our dues are $8/pt, Many of us (except for special circumstance) wouldn't rent it for less than what it costs us tot begin with. We'd look to at least recoup the costs for the year.

4) Brokers set the secondary rental floor rate. If we can make $15/pt from a broker, why would we list it on our own for less?

Cash rate is probably the last on the list and most of us probably don't even compare it to cash because of the easy references above. I could have rented out my Christmas week points for roughly $35/pt and still been about 50% cheaper than cash rate, but what's the chances of getting someone to bite at $35/pt when they could rent from a site sponsor for $19 or $20?

 

[lowlight]

Factors in my view.
1) Disney sets the ultimate rental rate through their OTU points rental. That would essentially be the "max" rate.

2) Brokers set the secondary max limit with the rental rates. If an individual is to charge more than a broker, what do we offer instead?

3) Our dues set the ultimate floor for the rental rate. If our dues are $8/pt, Many of us (except for special circumstance) wouldn't rent it for less than what it costs us tot begin with. We'd look to at least recoup the costs for the year.

4) Brokers set the secondary rental floor rate. If we can make $15/pt from a broker, why would we list it on our own for less?

Cash rate is probably the last on the list and most of us probably don't even compare it to cash because of the easy references above. I could have rented out my Christmas week points for roughly $35/pt and still been about 50% cheaper than cash rate, but what's the chances of getting someone to bite at $35/pt when they could rent from a site sponsor for $19 or $20?

That all makes sense. I will say that I've seen several big disboards renters that offer much more gracious cancellation policies than the site sponsor, and definitely more than another rental site which offers nothing as far as a cancellation policy. Some even offer payment plans, which make them more attractive than the brokers. As for your Christmas week points, do you mean an already made reservation? I'd imagine those are not only worth more for sold out weeks, but they are also the only game in town since a broker can't book what isn't available for any price.

 

[Yinn]

That all makes sense. I will say that I've seen several big disboards renters that offer much more gracious cancellation policies than the site sponsor, and definitely more than another rental site which offers nothing as far as a cancellation policy. Some even offer payment plans, which make them more attractive than the brokers. As for your Christmas week points, do you mean an already made reservation? I'd imagine those are not only worth more for sold out weeks, but they are also the only game in town since a broker can't book what isn't available for any price.

There's a good bunch on here that are very flexible.

For Christmas, I have a guaranteed week. So It's an already made reservation and brokers typically have a structure that only offers me about $10-12/pt even though the cash rate on that room is typically $9000/week.

 

[DVCSunDevil]

I just recently learned of the rental groups/pages on FB and went to check them out. There are a TON of rentals going for $20/point or more. I think as rack rate prices are going up and the parks are getting more crowded (which also means more people looking for rooms), even $20/point looks attractive. How much do the rental brokers charge renters?

 

[Marionnette]

I just recently learned of the rental groups/pages on FB and went to check them out. There are a TON of rentals going for $20/point or more. I think as rack rate prices are going up and the parks are getting more crowded (which also means more people looking for rooms), even $20/point looks attractive. How much do the rental brokers charge renters?

The last time that I checked it was in the range of $19-$25 depending on the time frame, resort and broker.

 

[DVCSunDevil]

The last time that I checked it was in the range of $19-$25 depending on the time frame, resort and broker.

Good to know. Thanks! So those $20/point private rentals I was seeing over Thanksgiving are actually a good deal compared to broker pricing. Makes sense. Cutting out the middle man usually results in saving money...or in making more money if you are the one renting out your points.

 

[howardlee2]

I look at it as the floor is what the brokers are paying and the ceiling is what they are charging. $17 looks like quickly renting at a fair price.

 

[DVCSunDevil]

I look at it as the floor is what the brokers are paying and the ceiling is what they are charging. $17 looks like quickly renting at a fair price.

Yep. But is amazing how many private rentals are going for $20-$22. They have multiple people PM'ing to rent those points at the higher price. It makes sense when comparing Disney cash rates and what the brokers charge. It's a win-win for both the owner and renter.

 

[Madame]

Owners can charge more per point than brokers for resorts for which brokers rarely have points. Brokers can charge less, but if they have no points with which to make the reservation…

 

[kanerf]

I had some points from a resale that I needed to dump by the end of Jan this year (Feb use year). Did not want to mess around so offered them up at $12 a point. They were gone in a day.

 

[jhglassman]

Do you all sell your points on Disboards or someplace else. I recently sold some extas via DVC rental store for 16.50, but only because I haven't posted enough to be allowed to sell here. What I get for lurking I guess. In your experience, what is the best way to get the most for your points?

 

[Yinn]

Do you all sell your points on Disboards or someplace else. I recently sold some extas via DVC rental store for 16.50, but only because I haven't posted enough to be allowed to sell here. What I get for lurking I guess. In your experience, what is the best way to get the most for your points?

In my experience the boards here is best. I still use DVC rental store for straggling points if I have several left over. But as others have stated, the demand right now is through the roof.

There's enough demand that I stopped listing my points publicly this year. My prior renters have been reaching out directly. As a result of making my life easier, I've just been renting it out to them at previous prices. A bit of a win win as we've established a level of trust with each other.

 

[Marionnette]

Do you all sell your points on Disboards or someplace else. I recently sold some extas via DVC rental store for 16.50, but only because I haven't posted enough to be allowed to sell here. What I get for lurking I guess. In your experience, what is the best way to get the most for your points?

Private rentals will get you more $ than going through a broker. Of course, you have to deal with tire-kickers and bargain hunters when you rent privately but you also get to know some awesome people.

In addition to getting more money for your points, a private rental allows the owner to control their payment terms, whether they are flexible with rescheduling and whether they allow refunds.

 

[DVCSunDevil]

Do you all sell your points on Disboards or someplace else. I recently sold some extas via DVC rental store for 16.50, but only because I haven't posted enough to be allowed to sell here. What I get for lurking I guess. In your experience, what is the best way to get the most for your points?

I haven't rented but, again, there are several DVC groups on FB that are geared to privately renting points. I didn't know about those groups until this week. There seems to be some really experienced owners and renters there, so that could be an attractive place to rent out points. And those groups are monitored by moderators which is somewhat reassuring.

 

[crisi]

Do you all sell your points on Disboards or someplace else. I recently sold some extas via DVC rental store for 16.50, but only because I haven't posted enough to be allowed to sell here. What I get for lurking I guess. In your experience, what is the best way to get the most for your points?

It depends on what is important to you. A broker will get rid of the lookers, bargain hunters, tire kickers. They'll also run interference for the whiners and those that want changes. It will be an easy transaction for you where you'll pay someone to not have to deal with the frogs (although there are also princes out there). But if you choose to rent points yourself, through this site or another, you'll get a few more dollars a point - but you may have to put up with someone who emails you every week asking if they can add a day, or could you JUST CHECK to see if a room at BCV has opened up, or could you please change their request for near the pool to a high floor, or they've decided not to go after all and they know you said no refunds, but could they work something out.......

I'm enough of a misanthrope that I like a broker. And the few dollars a point is really not enough to make me revisit that decision.

 

[WxKristin]

Agree with what others have said here. Distressed points (about to expire) can rent out $10-15 per point on these facebook groups for reservations in the next 3-14 days. I think there are enough AP holders living in Florida that will happily take a bargain on a studio reservation last minute to make that move easy enough.

Also on FB, I see places like Poly, BC, or GF fetching $20-24 per point at 7 mo + or on holiday weekends with plenty of interest. Everything else at $17-19 seems to get a huge number of inquiries.

For my own rental contracts, I had been using $17-18 pp for the last year. I'm probably going up to $18-20 as my standard in the future. I let people cancel up to 60 days out w/o penalty and people have seemed relatively comfortable with that.

 

[AnnaKristoff2013]

1) Disney sets the ultimate rental rate through their OTU points rental. That would essentially be the "max" rate.

OTU points go for $19 per point and many rentals go for more than that now.