What about renting points as a scenario?

[RJSimmons]

I just hopped onto the rent board and see there are a few posts for people who rent points out. How does that figure into the scheme of things? Maybe one year you could stay in a regular hotel room and then splurge another year and rent points from an owner? Or does that not happen to often that people rent out their points. I'm just trying to see all angles.

What is the going price for points to rent out? I see it seems to be like $10 per point. Does anyone ever rent them for say $5 per point or is that insane? What is the usual going price?

I'd love to try the Boardwalk since we already have a feel of what the WL would be like and have viewed their rooms and the Boardwalk seems a lot of action that my boys would enjoy.

 

[stlrod]

RJ, Let us talk to your wife (we can give her tips on convincing a spouse to buy DVC.) All kidding aside, the per point price fluctuates somewhat depending upon the market. Some rent points for $15 per night and I have heard of very rare instances of points being rented for as low as $6 (points about to expire.) Currently, the going rate is $9-10 (which is probably lower than this time last year due to the current discounting.) I personally have rented points from a member for as low as $8. However, I would not even consider renting out my own points for less than $10. You really should consider buying a lesser amount of points than what you initially considered. You could accomplish the same thing with banking/borrowing on contract for 150 (i.e., one year stay in a studio, the next splurge on a 2BR.) If your wife likes WLV, buy 150 there. If later you think you need more points, you can add on at BCV when it becomes available (and still be close to the Boardwalk.)

 

[TnRobin]

If you are planning on renting points on a regular basis, you would be better off buying the points. At $10 a point, you are paying approximately double what the person has invested in them( or you yourself would have invested in them if you purchased DVC.) This statement is in no way saying that $10 is not a fair price, (fair price has nothing to do with what you have invested), $10 is a win/win price for both the renter and the rentee.

Back to original discussion. Renting at $10 a point on a semi annual basis results in you paying for the timeshare and not enjoying all the priveledges it offers. You would do better to purchase the points out right.

 

[RJSimmons]

I'm not so sure that renting the points at $10 per point is really paying double. The rooms go for over $300 some a night correct? Even with those current good deals out there or AP rates, it seems you'd still be saving by renting the points even at $10 a night which I think is fair and I think people would probably let them go alot less if they have too.

After reading the post about the BCV not being such a good location (didn't visit it when we were just there only BW) and I think if we do this it might be at the WL or perhaps an OKW resale. Now my wife claims after talking with others she wants to lean towards OKW because the rooms are bigger. How much room does the woman need? After viewing the rooms on the tour they seemed plenty big enough for me and I'm a big guy.

She's driving me crazy. I'm going to have to do something soon. Wives, can't shoot em and you cant ... .well ... shoot em.

 

[TnRobin]

Here is what I am thinking when I say about double the price.

DVC points = $75 each/41 years = $1.83 per year

plus approx $3.80 in annual maintenance = each point cost a member approx $5.5 each per year.


Yes renting for $10 a point is a win/win situation for both people. The Member gets a nice profit and the non-Member gets a room for below established prices.

My point is if you plan to rent points on a consistent basis, there will come a point at which you would have been better off purchasing your own contract. Renting points from a DVC member is not a good long term plan, but a great plan to get to know the resorts.


As for OKW - Don't let her see the bathroom in the studio - IT IS HUGE.

 

[Dean]

Most of use value our points differently than Robin does hers. That's ok, everyone has to make this decision personally. Remember that cost for personal use and value are 2 different things.

Lets assume my 270 points contract which cost me around $13500 (about $1.05 per year per point), plus yearly fees (next year about $3.23 at OKW) and lost income on the $13500, which is around $800-1100 depending on return assumptions. I usually use 8% ($1080, $4 pp) and while I know that's not possible right now, it's a good long term number for money I had invested before I bought. That gives a total yearly value of just over $8 per point. Those that financed, own at other resorts and those that gave more per point will have different numbers.

Of course there are other variables like the fact you'd have used money for vacactions regardless, saved money on usage compared to staying at other WDW resorts and not to mention the free tickets (I guess I did, didn't I). Since I see my break even point at somewhere around $8 per point, I'm not satisfied with a simple break even compared to cash so if I'm renting, I want a small "profit" where if I'm making the decision to use points or rent them and pay cash for an item, I usually back it off to $8 pp if I have plenty of points available.

Unlike some people, I don't reduce my current "value" for past rewards such as the free tickets or previous use, each must make their own decision in this arena as to what they are comfortable with.

 

[eva]

Another thing to consider is inflation. The price of that hotel room every other year is going to go up. Also as prices rise I would assume that the $10 per point will sooner of later go up too. That was one of the main reasons we bought. The first year we went to WDW we got a moderate for $85 a night with no discount. I doubt if anyone could get that now without a discount. Plus once you stay in a 2-bedroom there is no going back!

 

[dianeschlicht]

Everyone has made very good points. The problem is, if you have never stayed in a DVC villa, you have no idea what it means. We hemmed and hawed around deciding to buy for 4 or 5 years! We finally did buy 220 points and after our first stay, realized we needed to get more! By that time our chosen resort was sold out, so we waited until they opened up more points when they built new buildings to add on another 150. (This was before we knew about resales!) The point here is that you need to try out some of the locations before you make the decision. If your boys like the activity level, you will love BWV. If your wife like the large airy rooms, she will love OKW. I would suggest you stay on rented points at each resort for a night or two in a one or two bedroom unit. This will give you a feel for each resort, and you will be able to make a more informed decision. I wish we would have done that before we purchased. We difinately would have made our decision much sooner than we did!

 

[TnRobin]

Actually if you want to include an 8 % interest in my calculation for the time value of money it would be more like this


$65/42 years = $1.54

1999 cost = 1.54 + 3.5 in maintenance = 5.04
2000 cost = 1.54 * 1.08 = 1.66 = 3.5 = 5.16
2001 cost = 1.66 * 1.08 = 1.79 + 3.5 = 5.29
2002 cost = 1.79 * 1.08 = 1.93 + 3.5 = 5.43
2003 cost = 1.93 * 1.08 = 2.08 + 3.5 = 5.58
etc.....

(flaw in this calculation is that maint will not remain constant)

Then of course you would then have to convert the number back into current year dollars by using an expected rate of inflation, there by reducing the "cost" to a smaller number. The history of WDW resort inflation factors far exceed most returns on investment figures and thus would result in an even smaller current dollar cost.

Due to the netting effect lost interest revenue and the conversion to current year dollar amounts due to inflation, I did not include this in my example for simplicity purposes.

 

[Dean]

Robin, you'd need to include the time value of money on the full purchase price from the go, at least for those like me that took the money out of savings and paid the full amount. If you paid along by financing you can do it like your example, but you'd need to do include your interest paid on the loan.

As I noted, there are a lot of variables that will vary for each owner. I choose to look at it like I'm renting full time and therefore like it was a business venture. This takes any emotional components out of it. It is impossible to account for all aspects including maint fees but assuming maint fees will somewhat parallel inflaction, it is somewhat irrelevent.