Buying points to rent?

[bnlbebes]

Know of anyone here (maybe you?) who has bought points for the sole purpose of renting them for profit?

Just wondering how prevalent this is.

 

[NJOYURLIFE]

Not sure how many people do it, but from a financial standpoint, it is not the best way to use your points considering how much money you need to put up first.

 

[JeanJoe]

Our original DVC tour person / guide, who reminded us of a used car salesman, told us one of his clients bought more and more contracts for this purpose. I agree with the responder who said this is not a particularly good way to make money. And I have no idea whether what the guide said was true or not.

(FYI: when we joined last month, by resale, one of our first actions as members was to make sure our guide was changed. It took 2 attempts, but so far so good. The tour almost convinced us not to join; the Dis DVC boards changed our minds! Thanks all!)

 

[utahkennedys]

There is a seller on eBay who mortgaged her paid-off house and bought DVC points with all of the money, I am guessing at least $300k. Not sure how b/c I thought there was a limit, but she did. That is her business. She said in about 7 years she would "break even", and then the rest is a huge amount of pure income...for a long, long time....

 

[DVCforMe]

We did not buy extra points to rent out but rather to have enough points to give to each of our kids when they have young families of their own. I thought I would be able to splurge on weekends if we had lots of points - but I still can't "waste" the points. We go Sun to Fri three or four times a year and rent out the remainder of our points to cover the tax/maintenance fees on all the points. I wasn't sure about renting but it's given me the chance to deal with some really nice people who love Disney almost as much as I do!

 

[Stimpy]

Isn't it in the contract that you aren't allowed to use the points in a business manner or for financial gain? I thought I remember seeing something like that.

 

[cruise-o-matic]

I'm sure there are a few who point rent for profit.

IMHO, buying a large contract would be a mistake. Too much $ up front and a lot of maintenance fees to pay.

 

[gjw007]

Isn't it in the contract that you aren't allowed to use the points in a business manner or for financial gain? I thought I remember seeing something like that.

This is a quote from The Disney Vacation Club Disney's Saratoga Springs Resort Public Offering Statement, "Purchase of an Ownership Interest or use of the Vacation Homes and facilities of the Saratoga Springs Resort for commercial purpose or for any purpose other than for the person use described in this Public Offering Statement is expressly prohibited" (p. 18). I'm sure its on other documents as well.

 

[tjkraz]

This is a quote from The Disney Vacation Club Disney's Saratoga Springs Resort Public Offering Statement, "Purchase of an Ownership Interest or use of the Vacation Homes and facilities of the Saratoga Springs Resort for commercial purpose or for any purpose other than for the person use described in this Public Offering Statement is expressly prohibited" (p. 18). I'm sure its on other documents as well.

Somebody wake me the day they try to enforce that clause...

Certainly there are times when Disney is forced to take legal action to protect its interests. But Disney is just not going to file suit (or otherwise penalize) against an individual who has spent hundreds of thousands of dollars on their timeshare program.

Yes, they could probably demonstrate a for-profit enterprise without much trouble. And yes, they could prove that point rentals have an impact on Disney's own resort revenues. But that impact is negligible in the grand scheme of things. The negative publicity alone would be far more costly to Disney.

 

[gjw007]

Somebody wake me the day they try to enforce that clause...

Certainly there are times when Disney is forced to take legal action to protect its interests. But Disney is just not going to file suit (or otherwise penalize) against an individual who has spent hundreds of thousands of dollars on their timeshare program.

Yes, they could probably demonstrate a for-profit enterprise without much trouble. And yes, they could prove that point rentals have an impact on Disney's own resort revenues. But that impact is negligible in the grand scheme of things. The negative publicity alone would be far more costly to Disney.

I tend to agree with you if only because the individual would have to have a significant impact, which I doubt that they do have. I understand that Disney does take steps occassionally. I read somewhere where Disney was putting a stop to people who were giving tours of Disney by non-Disney personnel. That business also wasn't authorized by Disney. The trips supposedly could be argued as helping Disney but unless Disney controlled it, Disney didn't want any unauthorized tours. Disney also states that individuals can rent their points, so at what point does it become a commercial operations? It's a little murky making it necessary to have a very clear case in order for Disney to take legal action.

 

[JimMIA]

There is a seller on eBay who mortgaged her paid-off house and bought DVC points with all of the money, I am guessing at least $300k. Not sure how b/c I thought there was a limit, but she did. That is her business. She said in about 7 years she would "break even", and then the rest is a huge amount of pure income...for a long, long time....

There's supposed to be a limit of 2000 points at any one resort, and 5000 points total, but I'm sure that can be evaded.

My gut reaction is that there are much better places to invest $300,000.

If you figure the basic cost of a point, including both initial cost and maintenance, is about $6, and the normal rental price is $10-12, it doesn't sound like a get rich quick scheme to me. If you rent out 5000 points per year at an average markup of $6 per, that's only a gross profit of $30,000 before deducting expenses and occasional losses.

 

[Caskbill]

There's supposed to be a limit of 2000 points at any one resort, and 5000 points total, but I'm sure that can be evaded.

My gut reaction is that there are much better places to invest $300,000.

If you figure the basic cost of a point, including both initial cost and maintenance, is about $6, and the normal rental price is $10-12, it doesn't sound like a get rich quick scheme to me. If you rent out 5000 points per year at an average markup of $6 per, that's only a gross profit of $30,000 before deducting expenses and occasional losses.

One way to exceed the 5000 point limit is to have them in different names. For example 5000 points in your name, another 5000 in your spouses's name, and a 3rd 5000 in your joint names.

Actually the profits are higher than you might think. If someone bought 5000 points about 10 years ago, they paid $60/point or about $300,000. If they sold today they could probably get $80/point so that's already a 33% gain on their original investment right there. Then considering if today they're renting those 5000 points at $10/point (for a $6/point gain, that's $30,000/year income off their investment.) Let's say they did it for 10 years and then sold everything. Maybe they only charged $8/point early on, but dues were lower so say they still made $6/point profit earlier. After 10 Years they've rented $300,000 worth of points, then sell them for $400,000 today, meaning they turned their original $300,000 into $700,000 in 10 years.

I know of one regular e-bay renter who currently does about $30,000/year in rentals, and I'm sure there are others out there also. There are a number of high rental owners who even frequent these boards.

 

[vascubaguy]

Or you could always put 5000 in my name... I won't mind...

 

[Duckfan-in-Chicago]

There's supposed to be a limit of 2000 points at any one resort, and 5000 points total, but I'm sure that can be evaded.

My gut reaction is that there are much better places to invest $300,000.

If you figure the basic cost of a point, including both initial cost and maintenance, is about $6, and the normal rental price is $10-12, it doesn't sound like a get rich quick scheme to me. If you rent out 5000 points per year at an average markup of $6 per, that's only a gross profit of $30,000 before deducting expenses and occasional losses.

I've heard of people going as high as $15 per point. If they're looking at it as a buisness, I'm guessing they're def. not on the lower end. But then again, if we're talking 300,000 she would have to have paid $60 per point to get 5000.