To All Dvc Members - A Comment On Point Value

[DougL]

I am delighted to see more members renting points out at rates more reflective of the benefit received by renters. I cannot understand why members rent out points for $8 or even $9/point, and I am glad to see recent listings at $11. As we were not able to go to WDW this year, I rented out our points for this use year and some banked from last year (total 570). I rented all points out at $10 with minimal effort, in 4 different transactions, ranging from 30 points to 210. While I don't plan on renting out too much in the future, I am certainly NOT going to "fire sale" rent my points, when my transactions were all so streamlined and quick. I hope other members take note!

 

[Richyams]

I wish it would go the other way. People rent points for only weekdays. This does a dis-service to all members. I would like to see the going price down to where it belings, $6 or $7, this will more than cover dues and a little extra anyway.

I hope they soon make it much more difficult to rent. I am not sure there is anyway they can, but it would be nice.

Some rule about only renting full weeks would be nice, I know, its probably not possible, but anything that can be done to curb those renting regularly for profit would be a good thing.

 

[DougL]

I think it is appalling that there are some owners where this is solely an investment. That goes against what I thought a DVC membership was all about. That said...
Why would you want to limit renting. I lost my job this year, and didn't feel it appropriate to go to WDW and spend the additional $$ on a WDW vacation this year. I was delighted that I could rent my points out--the $$ paid off some mounting bills. And contrary to your generalization, my renters did pick up a weekend night! I also don't see where the price to rent should only be $6 or $7. The renters receive a value that, in many cases, is much greater than $10 or $11. I paid a much higher price for a DVC membership and higher annual dues than for other timeshare programs...because I bought into "the magic," and have enjoyed every minute of it. Why should I give up a piece of that magic for less than the market rate (which is what the market will bear)?

 

[doubletrouble_vb]

The rental price for points should be what the market will bear. Of the thousands of DVC probably very few are renting for profit.

That's because "profit" for an original OKW purchaser comes at a much lower point price than someone who bought later. A $6 or $7 rental would be a money loser for me if I chose to rent my points. In fact it would be a money loser for my friends who bought BWV a couple years back. Of the tens of thousands of DVC owners very few are out there in the business of renting points for profit. In fact the main DVC owner renting points and making a profit at is Disney.

In any case I don't see why you would stop at eliminating renting. Why not eliminate banking? If an owner can't plan ahead to use their points every year that will assure there are plenty of midweek days for everyone who can. Also eliminate borrowing...if an owner can't afford to buy enough points to begin with why let them cheat and use up midweek days they aren't entitled to.

 

[Johnnie Fedora]

We recently rented out a chunck of our points to pay cash for DCL. We saved over 200 pts by doing this instead of paying with points. We recieved more than 10.00/pt and our guests stayed two weekends. To often, DVC members want to "get'em rented quick" and therefore have a fire sale. I'm happy to see rentals at 10.00+. You have to compare the rental rate to the rack rate (don't forget to add 11% tax to the rack rate). 20-30% off rack rate for a DVC unit is a real deal, especially at busy WDW times.

 

[DougL]

Hear, hear!!!

 

[Caskbill]

I don't think too many people have any problems with those DVC'ers who need to rent out points on a few occassions, or need to rent one time because of a special circumstance, (such as job, accident, illness, get a better deal on a cruise, etc).

But we all know there are a few members who are in it for the profit. Just check out the ads on E-Bay - they're all Studios, 5-days, at OKW, and usually the two lowest seasons). To me this is no different than ticket scalping, which is illegal in most states.

This is obviously in violation of the rules governing DVC, but apparently DVC won't or can't do anything about it.

Do I have any answers, no. I wish I did.

 

[Richyams]

Hear, hear!!!

 

[dianeschlicht]

I agree with all of you. I have never rented out points, but I can certainly see a reason why I might have to someday. Caskbill is right about the Ebay auctions. Those always infuriate me!

 

[OKWDVC]

For the first time we have tried to rent our banked (use them or lose them) points out and was surprised by the response I was getting. I always thought that you could easily get $10.00pp for your points but was surprised that this was not the case. I recently had someone very interested in renting the points until she found out she could pay cash and it would be cheaper than $9.00pp that we were asking for and this was for a Saturday night. I of course checked it out by calling Disney and yes, it was much cheaper to pay $325.00 a night for a VB 2 bdrm than paying $648 for 70 points at $9.00pp. I thought it was always cheaper to use your points than pay cash (except on DCL). Why are we charged so many points if the cash value is so much less? Anyone know the answer?

Wishing I was in Disney now!

 

[mikesmom]

The answer is: It depends. It depends on the week, it depends on the resort, it depends on how slow or busy WDW is that week, etc. Post 9/11, I still think all travel destinations are struggling a bit, giving discounts, incentives, etc. That's going to change eventually.

Also time is on your side - even at a discount, Disney rooms will go up in price and your $10 or even $11 will look better and better.

For example, we had to cancel a trip last year and we were pretty close to the 30 days, as I remember. I posted the ressie (at $10/pt) and it was snapped up within 48 hours - and this barely 2 months after 9/11. Of course this was a BWV ressie during the Food & Wine Fest.

On property is probably easier to rent than Vero, but that's probably not a rule of thumb. Last May we wanted 3 days at Vero before our Disney trip. Couldn't find room for points, for rent, or even for cash!

So... it depends.

 

[Johnnie Fedora]

I think it is almost always cheaper to pay cash for a weekend DVC rental. Points rental at 10.00/point is cheaper (compared to cash through CRO) for the rentee if they include several weekdays. Each rental situation and timeframe is unique and the ultiamate price paid will have to be compared to the available cash rate (+ 11% tax). Sometimes point rental is more than the cash rate if not enough weekdays are included in the stay.

I simply wouldn't lower my price because someone wants to stay only Fri and Sat. I would look for another renter rather than sell points for a real cheap price.

I also think DVCmembers let their asking price be dictated to them by Rent/Trade posts that start out with the line: "Points wanted...will pay $8.00/pt". Don't let that necessarily determine your asking price, especially if you rent out early in the use year.

JMO.

 

[Doctor P]

I will respond to only one point. Even at the current price of $80 per point and at the highest current dues rates and taking into account interest costs (at Disney's rates), a member will not "lose" money renting at $7 per point. Now, whether that is an appropriate rate or a market rate at which point rentals should occur is a different question. The only point is that a breakeven rental is going to be somewhere between about $4.75 per point and about $7.00 per point depending on when the member bought into DVC.

 

[erikthewise]

One type of renting that has been curtailed is the renting of points to stay at non-DVC WDW resorts. Due to the point increases for 2002, this generally (always?) no longer makes economic sense for nonmembers.

I squealed as much as anybody when I saw those point increases, but now I'm more comfortable with them; if I want to spend a few days at Poly or AKL or whatever, I just need to pay cash.

I recall back in May when I was still deciding between renting and joining, there were numerous ads for renting large blocks of BCV points. It seemed clear to me that those points had been purchased for the sole purpose of making money by renting them out.

 

[riggins]

Hi guys- Wanted to throw in a different perspective on the discussion. I agree with Mikesmom that "it depends." I have rented points twice this year and thought I'd share with you my thoughts about what the points were worth to me each time I rented. Please note that I am not saying that all of these accomadations are equal by any means. They are simply what I considered when making a decision, considering location, accomodation size, price, flexibility (can't change my mind after renting), and risk (CRO isn't likely to steal my money- although some would debate this- HA HA).

April Trip (Magic/Peak Season)- 3 weeknights (rate is nightly)
1- OWK studio (cash) with tax, no disc. available- $354.09
2- Contemp. Jr. Suite with tax, no disc. available- $421.80
3- Wilderness Cabin with tax, no disc. available- $320.79
4- BWV 1-bedroom (30 pts/nt) @ $10/each- $300
For this trip, the rental points were a bargain at $10. Even at $11 or $12, renting still would have been a good deal for us.

November Trip (Value/Choice&Magic Seasons)- 5 nights including a Sat
1- BC Standard with discount and tax- $209.79
2- Contemp. Jr. Suite with tax, no disc. available- $321.90
3- Wilderness Cabin with discount and tax- $164.20
4- OKW 2-bdrm on points @ $9- 158 total pts/5 nights- $284.40
For this trip, we didn't need the space of a 2-bedroom, but this was the only thing available. So, at $9, this was a good option that we saw as a good value. At $10/point, our cost per night would have gone up to $316/night. In this case, since we didn't need the space, we probably would have gone to the Contemporary Jr. Suite. For a larger family, this may have been the deal of a century.

Like I said, I realize that these accomadations are not equal and the decision making process will vary based on each family's needs and priorities. However, I do think that this shows how the market value can fluctuate over time based on discounts available and what other options your renters are considering.

 

[Maistre Gracey]

Originally posted by Doctor P
I will respond to only one point. Even at the current price of $80 per point and at the highest current dues rates and taking into account interest costs (at Disney's rates), a member will not "lose" money renting at $7 per point. Now, whether that is an appropriate rate or a market rate at which point rentals should occur is a different question. The only point is that a breakeven rental is going to be somewhere between about $4.75 per point and about $7.00 per point depending on when the member bought into DVC.

Doc P, I completely agree.
My per point cost (at today's mtc fee rate) is $5.55.

 

[nisiemouse]

I rented points to the above poster riggins for $9 a point. We had friends who were going with us that had to move their week and had an abundance of points this year due to a resale. I happened to see a post where she wanted to go the same dates and I knew it would be more space than they had to have for 3 in a 2 bedroom. She had rented points before which made it easy. Actually $9 a point was the figure I had in my head before she quoted what she wanted to pay. This rate was worth it to me because everything worked out so easily. I don't plan to make it a practice to rent points in the future but it is a nice option to have.

 

[doubletrouble_vb]

Originally posted by Doctor P
I will respond to only one point. Even at the current price of $80 per point and at the highest current dues rates and taking into account interest costs (at Disney's rates), a member will not "lose" money renting at $7 per point. Now, whether that is an appropriate rate or a market rate at which point rentals should occur is a different question. The only point is that a breakeven rental is going to be somewhere between about $4.75 per point and about $7.00 per point depending on when the member bought into DVC.

Of course I disagree...if I looked at recovering my investment on a 40 year horizon then the principal part of my points is just 1.75 per point plus maintenance. However, for me it is unreasonable to predict that the vacation plan will have value to me more than 10 years out. And because it is a timeshare I cannot assume it will have any actual value at all in 10 years. So I want to recover the principal in 10 years. So that's $7 a point plus the maintenance...hence...even at $10 a point I'm losing value. When I use it that's the cost I assign to it. If I rent it I want the assigned cost value back in the rental fee. If I don't recover that amount that's money I've lost/wasted.

What happens in year 11? Just like another timeshare I currently own the cost value per point will be the maintenance fee...no more no less.

 

[Maistre Gracey]

Originally posted by doubletrouble_vb
...However, for me it is unreasonable to predict that the vacation plan will have value to me more than 10 years out...

doubletrouble_vb, everone has their own needs and opinions, but personally if DVC would not have value to me after 10 years....I would not have bought it.

Originally posted by doubletrouble_vb
...And because it is a timeshare I cannot assume it will have any actual value at all in 10 years...

While I understand and appreciate your thought process, I disagree with the logic.
In my opinion, there is no basis to assume that DVC will have zero value in 10 years.

 

[RUSSD]

It seems like a wasted post line. People will rent for what they feel comfortable with won't they. People will pay what they feel comfortable with. Those willing to pay $11 will pay it. Those willing to take $8 will take it.