What happens if you rent out too many of your points?

[RamblinWreck]

I've seen snippets around where people have mentioned that Disney doesn't allow people to profit off of DVC contracts.

So what exactly do they do if they decide that you're using your contract as a rental property?

Is there some general (or specific) threshold you have to hit before eyebrows get raised? Do you get some kind of a warning?


I feel like this would be good to know for anyone who is thinking about buying in but isn't 100% confident on using their points for themselves every year.

 

[Ben E N]

I heard that it's a big number, like 30 rentals per year from one member, that gets them upset.
They don't want commercial renters who go in, gobble up cheap contracts, and then flip them for a rental profit, but as of now they are fine with individuals renting out points they cannot use for years on end.

 

[Sandisw]

I definitely think you have to do a lot of rentals to raise the red flag with Disney that you are doing it for commercial purposes. For an individual who purchases and may need to rent some every year as they decide on personal vacation plans, I think it would be fine.

 

[KAT4DISNEY]

I've seen snippets around where people have mentioned that Disney doesn't allow people to profit off of DVC contracts.

So what exactly do they do if they decide that you're using your contract as a rental property?

Is there some general (or specific) threshold you have to hit before eyebrows get raised? Do you get some kind of a warning?


I feel like this would be good to know for anyone who is thinking about buying in but isn't 100% confident on using their points for themselves every year.

If DVC has decided it is being used as a business they can force you to sell and they have done that. The average owner renting left over points isn't going to fall under that. DVC is using the number of 20 rentals in a year to trigger a look at your account. I'd assume that is 20 to someone else but it's possible they just take a look once anyone hits 20 reservations.

 

[chalee94]

If you are not a hard core WDW fan who visits at least every other year and must stay onsite, DVC is really not worth it for you.

Buy-in prices have increased faster than inflation, so buying for profit is a pretty bad idea. You are more likely to get stuck with a contract that you have to sell at a loss during a recession.

In the past, DVC has sent warning letters to those it considered to be "commercial sellers." I think 20 was the number at the time, but it's Disney's rules so it might change at any time.

 

[RamblinWreck]

If you are not a hard core WDW fan who visits at least every other year and must stay onsite, DVC is really not worth it for you.

Buy-in prices have increased faster than inflation, so buying for profit is a pretty bad idea. You are more likely to get stuck with a contract that you have to sell at a loss during a recession.

In the past, DVC has sent warning letters to those it considered to be "commercial sellers." I think 20 was the number at the time, but it's Disney's rules so it might change at any time.

I would think that buying for profit is mostly a bad idea because Disney tells you that you can't do that.

If someone just had a 100 point contract or something like that, and was renting out all 100 points every year (or most years), would that raise red flags? Or are they really just looking to shut down people who want to build a business out of having a huge number of points and making tons of reservations every year?

 

[KAT4DISNEY]

I would think that buying for profit is mostly a bad idea because Disney tells you that you can't do that.

If someone just had a 100 point contract or something like that, and was renting out all 100 points every year (or most years), would that raise red flags? Or are they really just looking to shut down people who want to build a business out of having a huge number of points and making tons of reservations every year?

100 points would not raise a flag. But it would be kind of silly to do that IMO.

 

[Bing Showei]

If someone just had a 100 point contract or something like that, and was renting out all 100 points every year (or most years), would that raise red flags? Or are they really just looking to shut down people who want to build a business out of having a huge number of points and making tons of reservations every year?

Doing this would be akin to treating a timeshare as an investment. Unless you are engaging in tax evasion- actually, even if you were dodging Uncle Sam, the profit margin would not be worth the risk assumed by buying a timeshare, even the Disney variety.

Some were able to buy in during the great Recession bottom for real estate (2011-2012), and have done well to buy and rent. At today's prices, in light of recent policy changes, and given where economic indicators are suggesting things are heading, buying a timeshare as a rental investment would be ill-advised. Disney's timeshare is a buy-to-use product and should be treated as such.

 

[RamblinWreck]

100 points would not raise a flag. But it would be kind of silly to do that IMO.

I’m certainly not advocating for it or thinking about doing it

I was just trying to get a feel for how Disney looks at this stuff

 

[sethschroeder]

How would they even know is really the point. If you are doing 1 or 2 rentals a years for other people for all they know it is your cousin, inlaws, friends, neighbors. Heck you could have even all pooled your money to purchase it. I don't personally own yet so maybe there is some way they could for sure catch you renting it out?

 

[KAT4DISNEY]

How would they even know is really the point. If you are doing 1 or 2 rentals a years for other people for all they know it is your cousin, inlaws, friends, neighbors. Heck you could have even all pooled your money to purchase it. I don't personally own yet so maybe there is some way they could for sure catch you renting it out?

They will check with you. How it goes any further I do not know.

 

[DougEMG]

As long as you have less than 20 reservations in a rolling 12 month period you are fine. After that they will take a look at your reservations and who is on them.

With prices as high as they are these days, I can't imagine the numbers work out for anyone buying points just to rent out.

 

[RamblinWreck]

As long as you have less than 20 reservations in a rolling 12 month period you are fine. After that they will take a look at your reservations and who is on them.

With prices as high as they are these days, I can't imagine the numbers work out for anyone buying points just to rent out.

Yeah I really have no idea if it would make sense or not. That's not something I'd want to get involved in.

My gut says that it probably would "work", but there are a lot of tax implications that would need to be considered. And you'd be putting in a lot of work to, in all likelihood, earn a fairly meager return.

 

[jerseyduke]

If you rent out too many points, the Haunted Mansion will no longer have room for one more......

 

[Deb & Bill]

If they decide you are using your points for a commercial venture, your reservations may be cancelled and you may be told to sell your contracts or that DVC will be purchasing your points for violating the terms of the contract.