Why Buy when you can rent?

[bom_noite]

"Also people are a little to high on the resale prices that they are using. You should really use actual resale prices that are being posted on the three big resale boards."

Found on Timeshare Store (Sale - Pending):

Notes: 32 points coming on 12/1/06 and 70 points coming on 12/1/07. Priced at $98 per point.

I have 8 pts now, 150 coming 12/1/06 and 150 coming 12/1/07.

My wife and I LOVE OKW - so - we have actually thought long and hard about selling our 150 BCV and buying 230 OKW.

If I called Mr. Yeary today I would start the bidding at $101 and not settle for less then $99. In my analysis I assumed $96 (but, in fairness did not consider the resale costs associated - nor the opprotunity cost of my investment and dues).

And, I hear your point and agree with it. But, this is another way to do the analysis. Instead of looking 36 years in the future - what is the net +/- today! And, I think the numbers show that Crisi and I are way ahead of the Renter.

 

[Dis-best]

"Also people are a little to high on the resale prices that they are using. You should really use actual resale prices that are being posted on the three big resale boards."

I know about the Timeshare Store, but can you post the other two retail stores?

 

[fishermouse]

Even with all the rationalization no time share or "vacation Club" can be considered a great finacial investment, unless you buy/rent enough to make a yearly profit of at least 6%. IMO we don't buy for profit we buy for the convienence and the knowledge that we can vacation when we want at a place we really enjoy at areasonable cost. The money spent on DVC if invested wisley would profit far more than anything you can make on renting or selling. It's for the vacations and DISNEY MAGIC we go several times a year with DVC I know this would not happen if I did not own my little piece of Disney.

 

[bom_noite]

I know about the Timeshare Store, but can you post the other two retail stores?

I think they are:

***********: Who had no BCV contracts posted.

atimesharestore: Who had 7 BCV contracts that were being offered at an average of $98.57 per point. The offer prices were: $99, $100, $99, $98, $101, $99 and $94 (Pts not available until 2008). Without the $94 pt contract the average was: $99.37.

Based on that, I may amend my thought: $102 to start and settle for $100.

 

[Plutofan]

"Also people are a little to high on the resale prices that they are using. You should really use actual resale prices that are being posted on the three big resale boards."

Found on Timeshare Store (Sale - Pending):

Notes: 32 points coming on 12/1/06 and 70 points coming on 12/1/07. Priced at $98 per point.

I have 8 pts now, 150 coming 12/1/06 and 150 coming 12/1/07.

My wife and I LOVE OKW - so - we have actually thought long and hard about selling our 150 BCV and buying 230 OKW.

If I called Mr. Yeary today I would start the bidding at $101 and not settle for less then $99. In my analysis I assumed $96 (but, in fairness did not consider the resale costs associated - nor the opprotunity cost of my investment and dues).

And, I hear your point and agree with it. But, this is another way to do the analysis. Instead of looking 36 years in the future - what is the net +/- today! And, I think the numbers show that Crisi and I are way ahead of the Renter.

I know that you can get your price for the BCV. I believe that it would be very difficult to get $93 for Boardwalk. I just saying that everyone needs to come up with their own research, own assumptions and look into every number to make sure it is applicable to their situation.

What I was saying is if someone is not planning on selling then they need to look at things differently than a person who is only going to keep DVC and then sell it before it expires.

 

[Plutofan]

I monitor all three resales boards daily. One thing that concerns me is that there are a lot more contracts up for sale now than usual. It would be curious to see if it is because of the rule changes, or normal this time of year or if it is because a new DVC may be announced. I have some experience in the resale market since I have bought 5 resale contracts this past year and have gotten what I consider good prices and I am also in contact with the top four DVC resellers.

 

[crisi]

What you need to remember is that the assumption is that you will sell before the price starts to decline. You are also assuming inflation on room rates will keeps the resale value high. Also you are assuming that Disney will continue ROFR. If for some reason Disney stops ROFR or if Disney lowers the floor this will have a big effect on prices. The analysis that people are posting is only valid if you intend not to hold it until the lease is up. At that point you own nothing. Also people are a little to high on the resale prices that they are using. You should really use actual resale prices that are being posted on the three big resale boards. The going rate for commissions from what I have benn told is 10%.

Yep. We didn't buy intending to resell in the short term, so short term resale values weren't a factor in our ROI calculations - it was long term "will we break even" I look at resale values as gravy.

But we did do some simple calculations based on "what if we had to sell in a year, two years, three years." At that point, we were told by our resale broker that the commission was 12% (we didn't buy from Tom and it was several years ago now). We figured if we needed to dump in the first few years - we wouldn't break even, but after about three - even if resale prices had stayed stable, we'd break even if we added in the "value" of a Deluxe hotel room for our stay. We didn't factor renting - I wouldn't do that, too much risk and bother.

 

[Plutofan]

Yep. We didn't buy intending to resell in the short term, so short term resale values weren't a factor in our ROI calculations - it was long term "will we break even" I look at resale values as gravy.

But we did do some simple calculations based on "what if we had to sell in a year, two years, three years." At that point, we were told by our resale broker that the commission was 12% (we didn't buy from Tom and it was several years ago now). We figured if we needed to dump in the first few years - we wouldn't break even, but after about three - even if resale prices had stayed stable, we'd break even if we added in the "value" of a Deluxe hotel room for our stay. We didn't factor renting - I wouldn't do that, too much risk and bother.

I agree. I am just surprise the prices that people get on the resale boards. When I was looking for a VWL contract I was shocked to find out that I could buy through Disney, not have to worry about ROFR for just a fracation over what people were asking for resale after factoring in commissions. With Disney I could have gotten banked points, no commission, pay a fraction of current year MF (Disney prorates) and pay with a credit card and get 2% of the purchase price. Disney had the points in inventory at that time. I just have a hard time paying some of these high prices.

 

[mitzelf3]

I think that most renters are comparing the savings of renting to staying at a Disney resort, not to buying into the DVC. Renting is definitely cheaper than paying rack rates to stay onsite, so it is a great deal. Also, the initial cost of joining the DVC is significant, and beyond many folks' budgets, where paying to rent points, one vacation at a time, is not as great an expense.

 

[crisi]

I think that most renters are comparing the savings of renting to staying at a Disney resort, not to buying into the DVC. Renting is definitely cheaper than paying rack rates to stay onsite, so it is a great deal. Also, the initial cost of joining the DVC is significant, and beyond many folks' budgets, where paying to rent points, one vacation at a time, is not as great an expense.

Yep. And its MUCH less of a committment. When you buy DVC you are really committing to regular Disney vacation - for at least the several years it will take you to make your money back (though I've heard stories of people who have made DVC work for one big family reunion trip and then resold it). But if you can afford the committment, and are making it, I think you are better off over the long run with a purchase - less risk, more control - and points can't rent for $10 forever.

 

[tixx]

renting point for 8-9 is not hard it very easy i see no reason to own anymore points than the bare minium, to be able to be in the system carrying more point than that is just a luxury item never confuse luxury with saving money...

now as far as just renting point i think its a great little known way enjoy ejoy a nice Disney vacation with spending 20k upfront

I will leave it to a board accounant here to show you the cost of money vs. the cost of renting...at $9.00 per point they are very very close

 

[tixx]

Even with all the rationalization no time share or "vacation Club" can be considered a great finacial investment, unless you buy/rent enough to make a yearly profit of at least 6%. IMO we don't buy for profit we buy for the convienence and the knowledge that we can vacation when we want at a place we really enjoy at areasonable cost. The money spent on DVC if invested wisley would profit far more than anything you can make on renting or selling. It's for the vacations and DISNEY MAGIC we go several times a year with DVC I know this would not happen if I did not own my little piece of Disney.

I am in total agreement, andto think some peole in know put there deposit on a 9% visa card and they think its a good idea

 

[bom_noite]

Yep. And its MUCH less of a committment.

I agree with what everyone is saying, but, I think this post (and others in the past) are saying: "How do you justify to a Renter that buying in as good as owning?"

Based on that, I think the analysis we have provided answers the question posed by the OP and provides a counter argument to the renter: "If you are going to go to WDW every year it makes more sense to buy then rent!"

The point of my analysis was this: If you plan to go every year (or every other year) and rent - then - you are not better off then people who bought. In fact, you are behind. And, I would invite anyone to look at the numbers that Me and Crissi put forward and argue different!

I think if you plan to go every other year or every 3 years, then, IMHO it still makes sense to buy a smaller contract and bank/borrow!

If you go once in a blue moon - not economical - renting is the way to go! But even then a DVC membership could make sense:

My boss, last year, made his "once in a lifetime" pilgramage to WDW. And, he took his family and his wife's family! 12 in all! I tried to explain he could rent a OKW GV (using the Disboards), save a ton and be more comfortable!

I offered up the suggestion twice - and both times he changed the subject. Was not my money, nor my vacation and I am not one to force my opinions (unless I am posting here - hehehehe!).

He rented 5 (count them: 5) rooms at POR! He spent a mint (I have to guess 4K minimum)! And, then said to me afterwords "the rooms were just average!"

And, after all that I could argue that he could have: 1) Done his homework, 2) Bought a loaded contract with Banked/Borrowed Points, 3) Used the Points on a GV and 4) Sold the contract after the points were used!

In the end he would have saved a few 1000!

 

[salmoneous]

Just as a side note - when looking at current resale prices to see what a 100+ point contract would sell for, be sure to thrown out any contract with <100 points. There is a significant price premium for small contracts.

 

[doubletrouble_vb]

I think owning is superior to renting right now only if you plan to go to Disney annually. Otherwise you may be paying a slight premium by renting but the lack of commitment to a timeshare is rather handy. If you go three or four years in a row and never go again you are golden. When I bought my VWL the $10 price point left a reasonable gap for paying on the principal (if you had one). Today I dunno... I think that's why you have more people making reservations and renting those rather than just posting the points.

As far as the risk goes...its really no different than the risk you might have if you rented a shore house, ski house or lake house...or even worse a share in a house.

 

[lizanne]

My reasons for choosing owning over renting are quite simple. We are owners since 1992. Every year since we have had a two week vacation(something we did only rarely prior to that). We have been on 2 cruises, have traded thru II twice, and the other years have had great times at WDW. Sometimes we were able to rent a GV and invite other family members.

We have 5 children, and back in the day when they went on vacations with us (they're all adults now), we always had to get two rooms or a suite and that was very expensive.

Back when we bought the cost per point was much, much less and we also had free park tickets through 2000. I don't know if we would (could) buy now because it is very expensive.

I think everyone has to evaluate their own situation. It's not for everybody but for us it's worked out great.

 

[dkbayne]

I have 2 current rentals from what are very nice people. I don 't think those 2 parties or the 99.9% honest renters appreciate people posting that they can't be trusted. I am only the renter and I didn't like it very well. All you have to be is smart about it. There were 2 renters that emailed me about my rental request and it didn't take me long to figure out I didn't have the trust factor and kept looking. We do own a time share and have for about 15 years and we love where it's at, but a trip to Disney once every few years is also fun for us. Just please keep in mind that everyone has different situations.
Let's all be kind.

 

[crisi]

I have 2 current rentals from what are very nice people. I don 't think those 2 parties or the 99.9% honest renters appreciate people posting that they can't be trusted. I am only the renter and I didn't like it very well. All you have to be is smart about it. There were 2 renters that emailed me about my rental request and it didn't take me long to figure out I didn't have the trust factor and kept looking. We do own a time share and have for about 15 years and we love where it's at, but a trip to Disney once every few years is also fun for us. Just please keep in mind that everyone has different situations.
Let's all be kind.

I'm not saying they can't be trusted, nor is anyone else. We are saying we don't trust them. Too much risk. When you rent, you have two private parties involved. Neither Disney nor this board will get involved if either party gets scammed. There are risks at both ends. Are most people here honest? Yep. Would it be really easy for me to create a sock, go to the public library (so my ip address is different) rent my points to you, get your deposit, cancel the reservation, do that three or four times and leave you and three or four others high and dry? Yep. Would you have legal recourse? yep. Would it be a pain in the back end to sue me or prosecute me from another state? Yep. Throw in a little identity theft and you can't even find me to prosecute.

Even though that risk is small, it is significant enough for me not want to do it when I can get a room at a moderate for only slightly more from CRO with no risk at all, much better cancellation policies, etc.

Is that too much risk for me? Yep. I don't buy on eBay either.

 

[1000th happy haunt]

I like having control over my own reservations. We booked a quick trip to WDW for the Pirates and Princess Party. Last month DH and I were in the airport (cashing in a free flight voucher and then getting on a flight to head out to Disneyland), and decided to add on one night to our January trip. It was quick and easy to call Member Services right then and there and add an additional night. If we had rented the points I would have had to wait until after our trip and contact the person we rented from to ask them to extend our trip by one night.