why $10 per point?

Peterd

DIS Veteran
Joined
Sep 30, 2000
Messages
647
I was first going to answer the post about the rent to DVC members first at the $8 per point price, and began wondering WHO would rent for $8 per point? We have plenty of points, don't NEED to rent from or to anyone.
I'm not looking for a big fight with people who rent out their points, but I still don't understand how some people have been convinced to rent out their points for such a low price. Why do people settle for $10 per point. I know it's pretty easy, because it's so cheap. DISCLAIMER: Before I go further, They're Your points, do what you want with them, no one is telling you to sell for more, just wanted to point something out. Why not rent for half price what Disney would sell it for. If a BW or Okw studio would cost $300 plus tax, so say $330. Tell the people inquiring about your points to call Disney, ask the price their offering, then say I'll give it to you for half price no tax. What can they say, "naw that's too much, we can get the Vistana for that".
In Nov. it would cost 8 pts at Okw, 9 pts at the BW for a standard view. At $10 per point, you're charging $90 per night. If You offer the room at 145 to 150 no tax, (15 per point). DVC perks, discounts, pool-hopping, half price rooms, the only "bad" thing no maid service, which they could pay for. You can't get a deluxe room in Disney for that price. At ten dollars per point, at either BW or OKW, you are selling your room for less than the All-stars. Don't say, well over 40 something years these rooms are only costing you this much, so you shouldn't be trying to make money on the rooms. You are not scalping your' rooms, you're selling your rooms for less than the 25% discount a DVC member could buy it for. Why would anyone sell their years' vacation at what the dues cost you, or some other dumb break even equation? I once read some non-Dvcer showing some formula on the boards why we should rent to him at such a low price. These same people could have bought in, like you did. There is a reason we all bought in, we understood in the long run, these rooms for US, became a great deal.
At $10 per point, if you're talking a two bedroom, you're selling at 240 per night no tax, but you the DVCer with the 25% discount can get the two bedroom (if available at the DVC rate) for between $500 and $600 plus the 11% tax.
I did notice before the tragedy, the wanted points on the renters board far exceeded the for rent posts. This past summer, you could go two pages before you could find a for rent post that wasn't already taken. I just think you're selling yourself short. I guess the extra for rent posts maybe from the fear of traveling, or the resales with extra points.
This isn't to trash those who are charging at the lower prices for whatever reason, you can do what you want. I was just wondering if you knew what you were giving away. I can understand if there was a change in job status, or forgot to bank, or whatever.
We recently rented points from a member for a family reunion for friends and family at 13 per point and knew it was a great deal.
I love the posts, I'm willing to pay $7 per point (firm) for our upcoming trip in Feb., and you know what? A lot of hotels in Orlando will accomodate them too, and they'll leave the light on
 
It's a question of what the market will bear. At one point, it seemed as if $10 per point was pretty standard for what people were receiving.

Especially when renting to non-members, I agree with your reasoning that the price should be for nightly or total trip rental....not a per point price. I think the points confuse people. The seller may want to figure on that basis but why should the renter care about the points? They just need to know the price. This could help with rentals that include weekends. Instead of saying Thursday is $90 and Friday is $150 just tell folks you can rent to them for Thursday and Friday at $120 per night.

Recently Disney has had exceptional deals on DVC. It's hard for someone to compete with the prices. Disney offers a lot more assurance and the flexibility to cancel. There is a risk factor in renting from strangers and that's why people look for a rock-bottom price.
 
Firstly, I think you post is out of line (JMHO). Your disclaimer is fine and is correct people can rent their points for whatever they wish and bellyaching about it on here really doesn't matter one way or another. If the market for travel is down, it's down. No if's and's or but's. Right now it's not only a buyer's market out there especially for resales, it appears to be a renter's market as well as far as the DVC/Trade board is concerned.

I'm not quite sure of your math as you can get a "Disney" Old Key West 2br at $269 with their codes or AP rates and that comes to roughly $300 with tax per night. DISNEY PRICES. Now what if you cut THAT in half? That's $150 a night! Well guess what based on the points we've rented and at that $150 a night figure that would mean we'd be paying $5 per point! Do you think we rented our points for $5 per point? No we didn't. I would be happy if someone offered me HALF of Disney's "potential" rate (i.e., not everyone gets AP rates or even knows about them).

The point is, the dues on these points are $3 - roughly $4 per point and so for someone to rent them at $6, $7, $8 they are more than DOUBLING their profit on their dues for that particular year. Don't worry I know full well about the purchase price and how you have to figure that over the next 40 years, but the point is, this could be only **1** year a renter will rent their points so instead of complaining about rental prices being "too low", be happy that both the DVC Owner and the DVC Renter are enjoying the best of both worlds!

Who knows what will happen on our upcoming trip, my family might join DVC. I honestly think not at the moment as I feel the purchase price is too high (even resale) and I don't want to be locked in to going to Disney world for the next 40 years (now my daughter is a different story, she and her family would go every year).

Bottom line: Renting points at $7, $8, $9 or even $10 is still an extremely fair price to both renter and seller.
 

MaryAnn -- The rules state that someone who is paying cash for renting is not entitled to the member perks. However, enforcement is pretty much impossible. If they've got a card that says DVC Member, DVC is not going to investigate any further. It's not right, but it's the way things are for now.
 
Originally posted by MaryAnnDVC
Do renters get all of these things?
In reality, yes. Even though they are not supposed to, DVC will put member on their room keys and they will get all of the perks except the one or two that requre the actual member to be present., IF THE RENTER KNOWS ABOUT THEM. Most likely don't know about many of the perks.

As for $10 per point, there are many reasons. Bottom line is that's about the going rate and seems to be what the market will bear. It was starting to edge upward before the recession and 9/11. Another factor would be looking at DVC as an investment property (for thinkings sake) and taking into account the initial investment, lost income on cost, a reasonable return (?8%), dues and the like. that gives you a price at around $8-9 per point for those that bought OKW at $50 per point or so and edges upward somewhere around $11 per point for more recent buyers. The MB program has also lended some support to the $10 per point price.

Since the points structure at DVC is totally different than the cash structure, one must base the cost on per point to be fairly accurate to both parties or evaluate each rental independently. If you base it on DVC price, you can't do it on rack rates as they always have specials with 40% off not being uncommon. As noted, the risk and non refundable nature affect the equation dramactically. What some people do is reserve rooms then auction on ebay for a minimum set price.
 
Ken, I don't see how I'm out of line. I'm sorry I haven't experienced these great prices you talk about. When we first bought in, We would stay Sunday to Thurs in a two bedroom on points at the BW and pay cash on the weekend. We would get the 25% off rate for about 330 per night. The next year, the discounted rate was up to $480. We haven't been able to get the discounted rate for awhile, and have been quoted above $680 for a 2 BR. So at $10 per point, the renter gets it at $240 per night. I'm glad you have done all the math for us DVC members, it makes it easier for you to haggle for your best price. It's funny how someone owns something of value, and others who haven't made the investment, feel they should get the rooms for Cost. I can see if the seller was in danger of losing the points for the year, but I know I value the points more than that.I can see why you shouldn't buy, it's cheaper for you to rent. Do they give renters the DVC discount sheet when you check in? Just curious.
I also don't know why you "a renter" would be so upset about one member discussing prices with other members. Don't worry you are not in danger of losing your great discounts. You'll always find someone desperate enough. IMHO.
 
Peter, You raise a legitimate concern.

I think that it's safe to say that most of us don't join DVC with the intention of becoming landlords.

If I were in a rental situation, and, being a novice, I would look at the rent/trade board and price the points accordingly. However, in doing the math, I would wonder why they're so low in comparison to the cost of a cash stay.

Unfortunately, the travel industry is in a slump, and it's far reaching.

Wouldn't it be nice if Disney could offer the same price protection to members who rent out their points as they do to those who sell their interests?
 
Peterd, your post didn't come across, as some other have. I didn't read it as a move to increase the rental price, limit renting to anyone or in any other way affect the free market of DVC rentals. I felt you were simply asking why and giving some of the reasons that made you wonder if the current market were too low. If Ken can rent for the prices he quotes, go for it. I know I personally wouldn't rent that low unless I were in danger of losing my points. As for taking the lowest discount price and then figuring a lessor percent of that as a fair rental for DVC points, that's an unreasonable comparison. There is so much more to the cost of DVC than just dues that must be taken into account for the actual cost per point. To rent, you must look at it like your simply bought to rent as a business even then it depends on your resort, purchase price and if you financed. For personal use, the calculations of value are much different and you can figure what you would have paid if you stayed at a hotel, meal savings, etc.

Frankly I don't think the market will bear much above $11 per point at present but I think that's a reasonable price if the slightly lower points rentals realize that. I don't worry about the $7-9 per point as they are all basically one time rentals and almost all are short notice. So maybe we SHOULD talk about the higher rental costs and it will happen, LOL.
 
The price of point rental is determined by the market...For a while there was a real estate agent renting out OKW points at $6/pt on the rental board. Obviously there are some members who want the money more than the points...there are a multitude of motivations out there to explain why one person is willing to set their per point price at a certain level...they just lost a job, need to get some money now... they are afraid to fly but want to get some cash now to use for a local trip...the points are in danger of being lost altogether and they want to get something...meanwhile there have to be people out there to buy the points who have a variety of motivations- theyu re going soon, they are planning well in advance, they need only a few points to complete an existing reservation...Add to this the complete and total lack of any guarantees to either side and this affects the equation as well...Ken the retired cop could have posted "Why would anyone pay $13 per point when you could get the same thing for a lot less?" As in all such exchanges, people will generally try to get the best deal they can for themselves...it is the best way to deliver the goods and services to people- the free market governed by Adam Smith's invisible hand...

Asking the question of the original post suggests there is a "right" answer...there is... but it is determined by the complex motivations and forces mentioned above-not any individual's mathematical calculation....

Paul
 
Wanted to jump in here just out of curiousity........
I have lurked here at the DVC board for a while looking to possibly rent points for our trip in June. Maybe for Vero and OKW.

Here is my take on some of the prices....
For example (I used the point calculator on this site) :
If we were to stay at OKW for 6 nights june 6th - 11 it would take 89 points for a studio. At a cost of $8 / pt = $712 for the 6 nights.
Two years ago we were able to get a discounted room at OKW in Oct for $115 / night = $690. It was a "special rate" offered to us by CRO when I called in August looking for any discounts on the room we had at CBR.
So it was actually cheaper to wait and take your chances on availability.
Now granted....it was 2 years ago and in Oct.....but I believe things are a little tougher going these days.

Soooooo....IMHO a rate of $8 or $9 per point is more than fair market value.

And if members are unable to use up their points, why not rent them at what they consider "fair"
 
If we were to stay at OKW for 6 nights june 6th - 11 it would take 89 points for a studio. At a cost of $8 / pt = $712 for the 6 nights.

In the example you chose, the same dates in Oct would be only 61 points and at even $10 per point would have saved you another $80 over the "special deal" you thought you had through CRO. June is a much higher season for DVC resorts.

Soooooo....IMHO a rate of $8 or $9 per point is more than fair market value.

Your point is well taken however, as it is always a good idea to compare the costs whenever possible. Just make sure you are comparing the right things. "Fair market value" isn't always a static number.
 
Let's take it one step farther.....
I understand that in renting or purchasing points the tax is included....am I correct? this is what someone told me.
Yet we still need to pay the 11% tax going through CRO.
So....actual cost of our Oct stay at OKW was $766 ( I looked up our bill).
I put in dates for this coming Oct.....Thurs to Tues same as for June.....It came up 74 points.
Therefore.....at $8 / pt = $592
Or.....$10 / pt = $740

So.....the deal we got through CRO was a VERY good deal, considering we had maid service, and there were no restrictions on cancelations etc, if we had to cancel.

All I am saying is that anything between $8 to $10 is IMHO fair.

YES it is a very good deal too. But all things considered, with the decline in travel, etc......If someone is trying to rent some of their points, going higher than $10 lessens their chances of renting them out when guests still have a chance to reserve rooms at the same rate when calling CRO.

And....If I can save "another $80 over the "special deal" " then I might be compelled to rent those points early. Therefore relieving the stress the DVC member is under trying to rent them out.

It is all a numbers game. And you are right "fair market value is not always a static number.

Back to the original post.........This is why some are renting points out a such a low price.....IMHO
 
Sorry to cause such a huff with you renters, I was just asking the DVC MEMBERS their opinion, figured it was a DVC board. I kind of already knew what the renters opinion would be, because you have the most to lose. I work in a building of 400 or so people, and if I posted rooms at the BW or Okw for half price, people would dive at it. I've been asked many times for rooms. If anyone is having any trouble renting your points, Just let me know, and I'll post it on my work board for half price, and email them your emails, and you can work out better deals. I just thought members could do better for their investment, instead of selling them for priceline prices.
 
I put in dates for this coming Oct.....Thurs to Tues same as for June.....It came up 74 points.

Another point worth checking, as I used the same dates (6-11) in October and got a total of 61 points. DVC costs are often more than double on weekends vs weeknights. The dates in Oct are 8 points per night on week nights and 21 on weekends- thus the difference. While cash reservations are not different on weekends.

The cash "deals" are rarely available until 60 days before and then are dependant on rooms unreserved by members. Some months will have a lot of availability (thus the discounts) and others little (or no) availability and thus no discount.

Bottom line is that the reservation is worth only what a member is willing to accept and what a renter is willing to pay....and that may vary depending on the circumstances at hand for each negotiation.

Enjoy!
 
I have also seen some of the prices that Ken is quoting. I remember thinking "Well there goes the rental market...."
 
I do think potential renters might be better off paying cash for Fri-Sat, depending on the season but in all honesty, I think it's also offensive to "want' or "need" points and then tell the owner what they're willing to pay, especially when it amounts to Value Resort prices for Deluxe accommodations, maid service or not. Sure, everybody looks for discounts but I'm reasonably sure CRO doesn't accept calls from people who "need" to stay at the Grand Floridian but can only afford $150, as an example. I would imagine they're offered something at the Moderates.

Disney doesn't give any slack to the DVC owners. We have high point nights too in those desirable seasons for a weeklong vacation and I doubt any of us are willing to call Member Services and tell them we "need" a Friday night in high season but we're only willing to use 35 points for it. If we can get it for cash, that's what some of us do.
 
A little emphasis. On the points, I get 61 also to include one weekend night. AT $10 per point that's $610 including tax but no housekeeping. Still a good deal compared to the special rate you received even if you would be giving up the daily maid service. All of the posts I remember that were less than $9 per point were short notice or only a few points. I've seen some at $9 that were not quite as restrictive but none less than $10 pp that would have gotten you the 11 month window. Weekends are very expensive for points so it will likely always be better to pay cash for them, that's why many rentals are 5 days Sunday to Friday as are many members stays, mine included.

Since I've rented all of my 2002 (502) and basically all of my 2003 points at the $10 per point price, I'm not worried about the market taking a big dive. Yes I know DVC is to use, but I'm in HI for 2 weeks this summer and in MX for a week and HH for a week (two concurrent 2 BR oceanfront units) in 2003, so not much DVC time available. We were in HH for 2 weeks last summer with two 2 BR units concurrently and a 2 BR the week after. Invited several family members to join us for week one. All oceanfront and 5* Marriott resorts.
 
I suppose there are many ways to calculate the dollar amount that we will rent our points for. As a retired accountant (motherhood took precedence), my method would have been a disgrace to the profession!!! A gentlemen happened to offer a dollar amount that was the exact remaining balance on my upcoming summer cruise. Very convenient. I've insured him and his family a lovely vacation, and my family the same, with no cash outlay. In effect, it was like paying for my vacation with my points. Good enough for me!
 
The point "value" of rentals has LITTLE to do with reality. I would agree that strictly speaking, points are "undervalued" at $10 each. However, CAPITAL MARKETS always reflect supply and demand. If too many DVCers offered up points, the price would go DOWN; conversely, if DIS was hit by scores of new "renters", the price would go up. ;)
 



















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