What our Points are Worth!

[PamOKW]

Tink, you've hit the nail on the head. When I first came to the boards I was shocked to hear about people renting points. Now, it seems more and more members are considering doing it. People talk about renting out their points and paying cash for cruises, etc. instead of just using the points. I'm not sure how many non-DVC folks are interested in renting and whether they are outnumbering the points available. There may be some who would consider it for a low price but, if the cost is higher, they may opt to take one of the many deals Disney offers directly. DVC members aren't offering free admission for kids and staying on weekends bumps the price up at DVC. If you read our paperwork, Disney talks about how difficult it would be to compete with them for rentals. Maybe that's starting to happen and driving the price lower. It's up to the individual how much time and effort they want to put into the renting process.

 

[nem75]

I am going to OKW in January and am renting the points from a DVC member. I was more than happy to pay the $10 a point that is currently being charged. I believe that those who are into a reservation commitment but have a last minute emergency after your cancelation time have the right to offer low prices for their existing reservation so they don't lose in everything. I would have loved to pay $9.oo a point, but the number of points needed wasn't too high so the 10/point was an acceptable price. When you get those who need over 300 points, they may be looking for a deal from someone who can't bank the points and has no other alternative.

Since I have been searching I have noticed on EBAY those who are charging $898 for a studio at BCV for a Sun-Thurs stay. During off season times no less. That is way overpriced and unrealistic. So we renters also expect a fair price in return for our dollar.

Now renting is a great way to show my DH what how fantastic it is to stay in a 2br instead of adjoining rooms at Cornado Springs(which with our Fl resident discount would be about $300+ cheaper). I want to become a member and renting, and as previously said, this stay may be the catapult for us.

No need to get upset, I mean how many of us have gone to a garage sale and asked to get something for $1.00 when it is clearly marked $5.00?

 

[Nick@ VB+OKW]

Originally posted by nuthut
Here I am... Could not agree more, $10 a point is a cheap give away price. That's why I charge $12.50, which is more in line with my costs to own DVC. More than 50% of the person I have rented to have joined DVC. Now if I could only get the referal bonus in Michigan...

nuthut

Since I have never rented my points, and don't have any experience in renting,..........my question to you is

1. Do you reserve "prime weeks" (x-mas,easter,Thanksgiving) then put them on the rent board here.........or

do you mainly use DVC for your own family? and if somthing comes up that you have to cancel......then you rent your points out?

Thanks for your help...........In case I ever have to rent pts for cruising.

 

[robinb]

I have been on both sides of the rental equation.

I have never rented OUT my points for less than $10 each and each time they were completely rented within a week or two. Yes, I had some folks who offered me less, but I just said "no, thank you." and got the price that I wanted.

I have also rented "distressed" points from other members. Usually these are points which expire the month that I need them. I see it as a win-win situation. I get a cheap DVC night or two and they don't lose their maintenance fees. I have even been "bold" enough to ASK for cheap, distressed points . Some folks wanted too much for their points and I said "no, thank you" then too.

Honestly, if you put yourself in a situation where you are selling something you really can't get mad when people try to bargain.

 

[Dean]

There is no legal way to limit who one can rent to or even whether one can rent. Any individual can decide not to rent if they want. I'd be careful about saying you'd rent to one group for X and another for Y as this is clearly discrimination.

As for people telling you what your points are worth, it really depends on whether they are telling YOU what you should rent for or are they saying they can rent for a lower price. The two are totally different. There is little activity for less than about $9-10 pp and almost all is either exchangers through II or distressed points. If someone offers less than what you want, just say no.

 

[svslerxst]

I haven't ever rented or rented out my points, so I don't follow the Trade board much.

However, I think one way to determine a "fair" price for the rental of points is to determine what Disney is charging cash for a particular reservation and compare that to the number of points it would have taken.

I recently did this exercise with a fellow worker who's on the fence about buying into DVC. I ran a fictitious reservation thru Disney's online reservation system for a Fri/Sat/Sun reservation in February at VWL. The cash rate being charged by Disney was between $11 and $16 per point, depending on the room type.

Also, I'm concerned about beginning to make distictions between DVC members and non-DVC members, because if we start down that road then it's not too far of a step for DVC to then require that only DVC owners be able to be listed on a reservation.

A big selling factor for me in buying DVC was the ability to share my good fortune with friends and family by booking a reservation in their name and not having to be present myself. This, to me, is a huge benefit of my ownership and I'd hate to lose it.

Just my thoughts,

Dan W.

 

[vernon]

This is a barter market,
you say what you want to sell the points for, a perspective buyer says what they'll pay and you you either agree on a price or you don't. You have no more right to complain at their offer than they have a right to complain that you're "scalping" if you're asking too much.

There are a number of reasons why people selling points select their price, many of which will be different to yours. IF you think the price is too low, don't sell. If you want to get into the "market" you need to develop a thicker skin if people don't treat you as you think you deserve. They are after getting as good a deal as they can, in the same way you are. Some people are polite, some a rude. You won't change that fact by getting upset.

 

[CaptainMidnight]

Anyone here use an auction site like e-bay to rent out points? How much do you get per point using the auction method?

 

[Dean]

Originally posted by CaptainMidnight
Anyone here use an auction site like e-bay to rent out points? How much do you get per point using the auction method?

$12-18 pp is not uncommon form what I've seen. The only time I've rented on Ebay is when I had a time reserved and the person renting backed out. The person who backed out is (or at least was) a member and visitor to this board. Then the person that won the auction lost her job so it took three tries to get it taken care of. That's one of the reasons I get irritated when people talk about how great members are and how bad renters are. My only negative experiences have been with members, the non members have been easier by far. Truth is though that most peope (members and non members alike) have been great the few times I've rented.

 

[lat]

I have rented my points many times and I have charged below, at or above market rate for my pts. They are my points and I decide how much I want to rent them for. I have also donated points to a charity, and I think I will continue donating pts to them each year. The best part of DVC is its flexibility.

For anyone to tell me how much I should rent it for and how I should rent it is ludicrous, unless they paid my pts and are paying my dues.

DVC resorts have tons of rooms, it is not a 5 unit condo or something. If you are not happy that you cannot get reservation for your dates and your resorts, either get on the waitlist or buy the points at that resort and book early.

I book reservations and then rent them and I also book for people based on their dates, depending on whatever I choose to do. The latter for me somehow turned out to be generally more problematic because I allow cancellation. When people cancel or change their dates, I end up with expiring pts or holding pts.

I love owning my DVC pts for my own family use and know that one day when I have to sell it, I would have gotten very good use out of it.

The point value is determined by the market and it is YOUR POINT and YOUR decision if you want to rent and how much you want to rent.

This is just my little opinion and I will not responde to any comments on this thread any more.

 

[mjl]

I think some of you DVC owners are grossly over-estimating what your "investment" is worth. The idea that you will be able agree(the ones who are whining) to keep non-DVC members from renting wouldnt fly today IMO. Some of the DVC owners need the money they get from renting (or take it into account when deciding to purchase as a fall back), if the rental market dries up what will happen to those "co-investors"? More DVC vacancy? Is that a good thing for DVC owners?

Are there enough DVC owners to fill all of those rooms w/o the renters? Only time will tell

 

[TCPluto]

I'm certainly no economist, but if rental points were rented at a higher price day in and day out (allowing for distressed points), wouldn't it follow that our contract would be worth more?

Anyone? Anyone? Bueller?

I know Dean has the answer, or at least a thought...

 

[wdwdvcdad]

the notion that someone would tell me what i should or should not be able to do with my property & my money is so annoying. People should worry about what they do with their own money/points & not worry about others.

 

[ToyStory Fan]

This is the way I see it: I bought the points, so I dictate the price. No one is going to tell me how much my "investment" should translate to them. I am a finance person, I have been for 11 years, I know and understand the time value of money and internal rates of return. That said I did not buy DVC as an investment, but I do have alot of family and friends who can benefit from significant savings on vacations as well. Does that mean I will give it to them at my cost no of course not, after all, I am still the one "at-risk".

I determine (after a consultation) what the person is looking for and recommend that I can either a) help them with a very fair and reasonable discounted rate, or b) tell them they would be better served booking it themselves and taying at XX resort based on what they are looking for in amenities and cost.

The bottom line is not everyone is going to know to come here looking for the $9-10 per point trips, and lets not forget there is a certain amount of trust factor required too, in making that transaction happen. So for me I don't care what people rent their points for, but if it winds up being a good deal, I may rent them for myself.

 

[Speed Weasel]

Originally posted by TCPluto
I'm certainly no economist, but if rental points were rented at a higher price day in and day out (allowing for distressed points), wouldn't it follow that our contract would be worth more?

TCPluto, that is correct. Using an income, or cashflow, generation methodology, and holding all other variables constant, an increase in rents would yield an increasing asset price.

For example, let's say that the timeshare continues in perpetuity. I know it doesn't, but with SSR on a different end date it would needlessly complicate the equation without adding much more precision. And further assume that you require a 10% return, just to keep numbers easy. You take the cash stream divided by the required return to get asset value. So, if you rent for $10 per point (divide the $10 by 0.10) the asset price value is $100 per point. If you can increase the rent to $11 (with the same return requirements), then the asset value is $110.

Now, to further complicate, look at the required rate of return. Today 10% is not bad, inflation is low. But suppose a Democrat returns to the White House and inflation goes through the roof. I know, I know, cheap shot...but do you remember Carter? I had CDs at 12% interest! The inflation will cause your required rate of return needs to increase, let's say to 15%. Now the $10 divided by the 15% yields an asset price of $66.67 and the $11 rent equates to points valued at $73.33.

...trails off into the distance, mumbling something about the net present value of the whole transaction...

 

[Dean]

Originally posted by TCPluto
I'm certainly no economist, but if rental points were rented at a higher price day in and day out (allowing for distressed points), wouldn't it follow that our contract would be worth more?

I agree somewhat. If DVC were being used more for rentals just for income that would definitely be tree. I don't think the rental price alone will have that much affect. The savings and not the rental will be the big issue.

 

[Dean]

Originally posted by mjl
I think some of you DVC owners are grossly over-estimating what your "investment" is worth. The idea that you will be able agree(the ones who are whining) to keep non-DVC members from renting wouldnt fly today IMO. Some of the DVC owners need the money they get from renting (or take it into account when deciding to purchase as a fall back), if the rental market dries up what will happen to those "co-investors"? More DVC vacancy? Is that a good thing for DVC owners?

Are there enough DVC owners to fill all of those rooms w/o the renters? Only time will tell

Value depends on how you figure it. If you look at it financially, like an investment, points are worth around $10-11 pp depending on the rate of return you pick. That assumes you use the current value over what you paid. That's yearly fees, return of principle plus loss of income on the money used. If one compares to the rooms costs, even discounted prices, the value is actually more. DVC has also valued them somewhat with the MB program where they used $10 pp in most cases. Ultimately DVC will be worth what people are willing to pay. That has consistenly been around $10 pp since the free passes evaporated.

 

[DVC-Don]

We did not buy our points with any intention of renting them out, and have not. We did not buy this "timeshare" as an investment either. We just wanted a nice selection of rooms/resorts for our vacations.

 

[anniet]

Originally posted by 10gigi
Why are we renting to non DVC people for the same price as DVC people and why are they not in a seperate locations on this site?

Probably because a "nonDVC" person's money is just as green and spends the same way as a DVC person's money.

Although I said I would never sell points I was in a position where I had to once. I sold 50 points I got from an add-on that I "HAD" to take and they were going to expire in 8 weeks. With a very short time period to sell the points I felt I should take whatever I could get for them. I got $8 per point and was able to give a very nice man and his family 4 days in a studio at OKW.

I have a problem with people who think DVC is a tool to be used to continuously line their pockets.

It's a family vacation experience, meant to be used by the person who purchased it and their family members. Anyone who purchased it for any other reason does so at their own risk.

 

[PamOKW]

Originally posted by mjl
Some of the DVC owners need the money they get from renting (or take it into account when deciding to purchase as a fall back), if the rental market dries up what will happen to those "co-investors"? More DVC vacancy? Is that a good thing for DVC owners?

Are there enough DVC owners to fill all of those rooms w/o the renters? Only time will tell

Once a resort has sold-out all but 4% of the rooms are theoretically "booked" year-round. Whether or not there's a body in the room really doesn't matter. Dues provide the operating income for the resort. A few extra empty nights would allow DVC time to do a little maintenance and/or rent the room out for cash.

If someone purchases DVC expecting to finance it through rental, that's a very dangerous proposition. Bold faced type throughout the offering statement recommends against doing that. However, if someone does that and then defaults on their ownership, DVC will take back the contract and resell it. It will have a minimal effect on other members.