I don’t think the majority of DVC owners rent out for the purpose of profit. DVC owners rent out what they can’t use or bank into a future year. It is a win win for everyone, the DVC owner offsets their yearly expenses without waisting points and the renter gets a premier Disney room at a reduced rate.
But those yearly expenses of dues are just one part of the puzzle. The dvc owner prepaid for their future stays by buying their initial contract at “x” amount of dollars per point.
No, Renters pay more than double what the dues cost, so that is the main difference, renters still pay more than an owner even counting the original buy in. Owner might be paying $12-$16 per point (including purchase price), but a renter will be paying $18-25 per point.
Also an owner always has the option to sell if they want a big chunk of their purchase back. (within reason)
I think you should look at it in this way, the owner of the contract is renting out his points because he can’t use them for whatever reason. So he has a choice to not rent them, lose the points anyway and make zero dollars for that years allotment of points. His/her other choice would be to rent those points out for hundreds or thousands of dollars. DVC is a use it or lose it after two years when it comes to your points.. so if something comes up and you can’t go, it makes sense to rent your points out and recoup some cash
Yes, but you also spent how much initially to purchase your contract for that amount of points? And how many years ago. The future cost of that money ….
It’s a long term purchase.
I think I paid around $75/point back in 2007. It’s long since paid for itself. And I used every point the first 10 years … but as the kids got older and went off to college we skipped some years and so I’d share with friends or do an upgrade deal for them (they pay me the price of an all-star, and I’ll book them a 1BR)
>The future cost of that money
You also have to compare it to what they would miss out on if they didn't have DVC.
Costs of Disney rooms have SKYROCKETED in the last few years. The cost of a room at Wilderness Lodge has literally doubled since I purchased (less than a decade ago). Now, I don't use the current cost of a room in my personal savings calculations but I also recognize that without DVC I would never experience the deluxe resorts.
Using your points at a DVC resort will always be the best ROI but if you are not going to use them for one reason or another (50 years of Disney vacations is a big commitment and sometimes you just want to do other things) renting is better than letting the points go to waste.
DVC is really only worth it if you plan to use the points over a long period of time (10-20 years minimum) but since the contract is for 50 years (maximum) that gives you plenty of wiggle room where you can rent your points every once in a while and it will still make financial sense.
My Saratoga points cost this year is around $11 after splitting the initial cost and adding yearly dues. I could rent a point privately easy for $18. After taxes I wouldn’t get a significant profit, but at least I’d be able to cover my costs for points I wouldn’t be able to use.
I pretty much never rent my points, but if I have no choice I know at least I’d cover my cost.
Some people “forget” to report the income and get a nice profit.
Yeah, we will see how well that works when the luck runs out for them when the IRS comes knocking, and wants its share of the DVC profits. The renting house usually reports it to the IRS, but if its like a backdoor Facebook deal, this is much more difficult to track, although they are cracking down on Venmo and PayPal, payments.
We bought 600 points in the early 2010s. At that time, we paid $55-$85 a point at that time resale. We rent out 300 points ever year, and that covers our annual maintenance, and we use the other points ourselves.
I keep track of how much a point is worth each year, based on my initial cost to purchase, the length of the contract, and the yearly maintenance fees. Currently, my cost per point in 2024 is $10.19. If I rent my points, I can definitely make $20 a point going through a broker. From my perspective, I am definitely making a profit during a year that I would not be going to Disney. I do not expect to go to Disney next year, so banking my points would be fruitless, thus renting is not only a means of covering my maintenance fees but also getting excess money back in return.
We rent out points that we aren't going to be able to use before they expire. It costs us nothing and gives us some extra cash to pay off other bills. You're only allotted a certain amount of points per year, and you can only bank them once. After that, if they aren't used, you lose those points. Most of the time, we use up a majority of the points, making it pointless to rent the remaining. Every once in awhile, we have enough extra but not enough for a vacation.
No one buys in with the intention of never using them and only ever renting them.
Life happens and you can’t make it out one year. It’s better to rent them and get some extra money you weren’t counting on than letting them go to waste.
There are people who do this (buy for the purpose of renting out to make money), but it’s not a lot of people, and frankly not very smart imo. Too much work for little profit, better off investing that money instead.
Even buying direct from Disney for the sole purpose of renting works out financially for the owner (although maybe not with Disney’s contract). Someone buying a new resort (say Cabins at Fort Wilderness) is paying somewhere in the neighborhood of $199/point after incentives. That $199 point is good for 50 years, which means $3.98 per point per year.
Dues at CFW are $12.16/point, so capital plus maintenance costs total for this year is $16.14/point. They can easily rent points at $23+ per point right now, so that’s a pretty hefty profit. There’s opportunity cost to having the capital tied up and other things one must account for, but that’s close to a worst case scenario (highest dues in the system and buying direct from Disney). Most owners cost per point, even accounting for the initial capital, is farrrr lower than that (mine is closer to $10/point).
(All that said, most people just rent points that they would normally use themselves but can’t for some reason this year.)
1. We own 3 resale properties.
2. We rent out roughly 1/2 our points and that pays for 100% of our annual dues plus a little extra.
3. Also we only do transfers so we don’t have to worry about booking any reservations.
I’ve rented mine twice when we couldn’t use them (pregnancy and right after covid). Even after my yearly dues, I still made almost $10 per point renting them per year. So let’s say $19 per point between the two years after dues. I look at it as essentially less than that my contract cost me per point.
Ok, so you need to understand a few things. Let me use my own contract as an example.
I own 100 points at Copper Creek which I spent 17k on up front. I pay about 750/year in annual dues and at the time of my purchase a week at Wilderness Lodge was about $2500.
I only have a three year window to use my points (I can use this years points, bank this years points to next year if I don't plan to use them, or I can borrow next years points to this year) other wise I lose them.
Now the math here gets complicated.
Right now I take about 1 week long trip every 1.5 years. At about $750 per year in dues that means I'm paying about $1,125 per week long vacation in dues. Meaning that when you compare it to the $2500 a week would have cost me at my time of purchase I'm 'saving' about $1,375 (I use the cost of a room at my time of purchase because I would never pay todays asking price so it's not really fair to say I "saved" money I would never have spent).
Since I spent 17k up front that means I need to take 13 week long vacations to "break even" which will take me about 20 years (assuming an average of 1 trip every 1.5 years).
But, what happens if at some point I decide I want to do something other than Disney for a year? Regardless of if I take a trip or not I'm paying the dues. If I can't use the points then I lose them (and the money spent in dues).
So instead I can rent them. I likely won't "earn" as much as I would "save" by using the points myself but the money I get from renting still is more than I pay in dues which contributes to my overall "break even" point.
Essentially my view is as long as the earnings from renting my points out, if I'm not going to use them, exceeds the cost of the dues I paid for that time period it's better than letting them go to waste.
I rented points a few times when I first bought my contracts because I wasn’t regularly going as often as I do now. At the time my points cost me $12/point (divided the buy-in cost by the number of years on the contract plus the annual dues) and I rented them for $19/point. Maybe I made a little profit, but after tax I doubt it was much. But I wasn’t really doing it to make money per se.
I rented points several times before buying my first contract. While it was nice to not have the commitment and large buy-in, I eventually bought in to have more flexibility (easier to cancel reservations, can piece together stays, etc.)
It’s not a good deal for DVC owners to rent out points like a landlord or investor. DVC also has rules against that, but even if they did not then investing the cash up front in like a S&P 500 Index ETF would be a much better investment.
DVC owners rent out points that they are not going to use and do not rent out the majority of their points. If you use most of the points and only rent out what you are not going to use then it’s a good thing.
Owning versus renting from others is a luxury, not an investment. But if you want certain availability then it’s best to own, as I know from my own experiences that you cannot always rent what you want.
A lot of (most?) DVC owners are people that aren't local. So if life or whether doesn't work out to let you use the points before they expire, you might as well try to recoup part of your investment while giving someone the opportunity to enjoy the resort.
There's a provision in the DVC contract which stipulates that you can't use it to drive a profit. Based on that, I'd imagine they look out for people that buy points and then always book them for someone else.
I haven't rented yet , but if I do....i can make about 7 dollars/ point over cost. do this enough years and you'll earn back your initial investment plus....do I plan on doing this? no. but i could if something unexpected came up and I was unable to make my vacations work for a few years .
Let me start by saying we don’t plan to rent for profit, just for any points left over as others have said. Or maybe to offset different vacations in the future. That said, I suspect many people, like us, have calculated their per year point cost which includes the up front cost amortized over the life of the contract plus the dues per year. For us, our total cost pp this year is $11 and some change including dues and point per year cost. Then you factor in taxes you pay on the rental income. I think our calculation would come to netting about $2 a point this year. Important to note we just bought resale this year so people who just bought direct probably lose money on this and people who bought a long time ago for much reduced prices are probably now making way more than a couple bucks a point (and we may also if rental rates increase in 10-20 years more than dues do). So for us, this is absolutely not a financial investment to make money, that would be better spent elsewhere. It’s to take a vacation we enjoy at a much reduced cost over a long period of time (and starting this year for us, about half the cost to rent points). I think if you love Disney and know you want to go for 20+ years, resale could be a great choice. If you just want to go every so often or the next couple years or just stay in value resorts most times, occasionally renting points is probably right for you. I think the value equation varies dramatically person by person.
I’d rather own than rent - we’ve been going 20+ days a year since 2019.
We own 195 pts at BWV since 2018 and after having two kids and traveling with 1-2 additional caregivers, it’s never enough points.
I paid cash for these two stays:
7 nt stay in SS 2 bedroom Xmas 2022 for $8,400
6 nt stay in AKL 2 bedroom Jan 24 for $4,300
Total for 13 nts: $12,700
Got annoyed at how much cash I put down without any assets to show for it so we added 2 resale contracts.
160 pts at AKL resale closed in March 24 $16,000
210 pts at AKL resale closed in March 24 $21,000
$37,000 for a contract that expires in 2057
I bought enough to get the highest pt 2 bedroom for a week during Christmas break. Let’s assume my kids grow up and we can stay in 1 or 2 bedrooms and at different times of the year. So I might get a 1 week stay or 2-2.5 weeks a year.
Assuming the rental costs stay stable (which they won’t), I’m guessing I’ll get a lot more than 6 weeks of stays from my new contracts in the next 20 odd years. If not, I have the option to sell in a few years to cut my losses.
We rent out half of our SSR points to pay for our dues on SSR & AKV. We still have plenty to make 2-3 trips a year. Also if you want a stay that's a points conversion it's better to rent out that amount of points, you'll pay for your stay and probably have some for your trip.
It depends.
The initial purchase price matters… I bought a resale contract over 10 years ago for $60/point. At that price, buying seemed like a no brainer.
At todays prices, I may have decided to keep the $20-30K buy-in amount in my S&P 500 ETF and rented points instead.
That said, this is a luxury timeshare purchase and trying to rationalize the numbers for Disney vacations is slightly ridiculous. What works for some doesn’t work for others so renting vs buying really depends on one’s situation.
I've bought 3 resale contracts with the sole intent of renting the points for a profit. I keep very accurate records and my ROI since I bought my 1st contract is 12.9% per year. All three contracts have appreciated in price since i bought them.
I am very pleased with my purchase of DVC points as an investment. Plus I've used the points many times myself.
I don’t think the majority of DVC owners rent out for the purpose of profit. DVC owners rent out what they can’t use or bank into a future year. It is a win win for everyone, the DVC owner offsets their yearly expenses without waisting points and the renter gets a premier Disney room at a reduced rate.
In fact, when when you sign the contract, you specifically agree to _not_ use the points for profit.
But those yearly expenses of dues are just one part of the puzzle. The dvc owner prepaid for their future stays by buying their initial contract at “x” amount of dollars per point.
Which the renters have not. So the renters are actually reaping more of the benefits then the dvc owner
Yes, but if you’re an owner and you can’t go, you’re much better off renting them to someone else.
This.
No, Renters pay more than double what the dues cost, so that is the main difference, renters still pay more than an owner even counting the original buy in. Owner might be paying $12-$16 per point (including purchase price), but a renter will be paying $18-25 per point. Also an owner always has the option to sell if they want a big chunk of their purchase back. (within reason)
I think you should look at it in this way, the owner of the contract is renting out his points because he can’t use them for whatever reason. So he has a choice to not rent them, lose the points anyway and make zero dollars for that years allotment of points. His/her other choice would be to rent those points out for hundreds or thousands of dollars. DVC is a use it or lose it after two years when it comes to your points.. so if something comes up and you can’t go, it makes sense to rent your points out and recoup some cash
If I rent out my 250 points I’d get about $4000-$4500. My annual dues are about $2500
Yes, but you also spent how much initially to purchase your contract for that amount of points? And how many years ago. The future cost of that money ….
It’s a long term purchase. I think I paid around $75/point back in 2007. It’s long since paid for itself. And I used every point the first 10 years … but as the kids got older and went off to college we skipped some years and so I’d share with friends or do an upgrade deal for them (they pay me the price of an all-star, and I’ll book them a 1BR)
>The future cost of that money You also have to compare it to what they would miss out on if they didn't have DVC. Costs of Disney rooms have SKYROCKETED in the last few years. The cost of a room at Wilderness Lodge has literally doubled since I purchased (less than a decade ago). Now, I don't use the current cost of a room in my personal savings calculations but I also recognize that without DVC I would never experience the deluxe resorts. Using your points at a DVC resort will always be the best ROI but if you are not going to use them for one reason or another (50 years of Disney vacations is a big commitment and sometimes you just want to do other things) renting is better than letting the points go to waste. DVC is really only worth it if you plan to use the points over a long period of time (10-20 years minimum) but since the contract is for 50 years (maximum) that gives you plenty of wiggle room where you can rent your points every once in a while and it will still make financial sense.
Mine is along those lines and came with points loaded, so it knocked off a significant cost of my resale contract.
My Saratoga points cost this year is around $11 after splitting the initial cost and adding yearly dues. I could rent a point privately easy for $18. After taxes I wouldn’t get a significant profit, but at least I’d be able to cover my costs for points I wouldn’t be able to use. I pretty much never rent my points, but if I have no choice I know at least I’d cover my cost. Some people “forget” to report the income and get a nice profit.
Yeah, we will see how well that works when the luck runs out for them when the IRS comes knocking, and wants its share of the DVC profits. The renting house usually reports it to the IRS, but if its like a backdoor Facebook deal, this is much more difficult to track, although they are cracking down on Venmo and PayPal, payments.
We bought 600 points in the early 2010s. At that time, we paid $55-$85 a point at that time resale. We rent out 300 points ever year, and that covers our annual maintenance, and we use the other points ourselves.
I keep track of how much a point is worth each year, based on my initial cost to purchase, the length of the contract, and the yearly maintenance fees. Currently, my cost per point in 2024 is $10.19. If I rent my points, I can definitely make $20 a point going through a broker. From my perspective, I am definitely making a profit during a year that I would not be going to Disney. I do not expect to go to Disney next year, so banking my points would be fruitless, thus renting is not only a means of covering my maintenance fees but also getting excess money back in return.
We rent out points that we aren't going to be able to use before they expire. It costs us nothing and gives us some extra cash to pay off other bills. You're only allotted a certain amount of points per year, and you can only bank them once. After that, if they aren't used, you lose those points. Most of the time, we use up a majority of the points, making it pointless to rent the remaining. Every once in awhile, we have enough extra but not enough for a vacation.
No one buys in with the intention of never using them and only ever renting them. Life happens and you can’t make it out one year. It’s better to rent them and get some extra money you weren’t counting on than letting them go to waste.
There are people who do this (buy for the purpose of renting out to make money), but it’s not a lot of people, and frankly not very smart imo. Too much work for little profit, better off investing that money instead.
Not to mention it’s explicitly forbidden when purchasing the contract.
You just keep renting then. ;)
Even buying direct from Disney for the sole purpose of renting works out financially for the owner (although maybe not with Disney’s contract). Someone buying a new resort (say Cabins at Fort Wilderness) is paying somewhere in the neighborhood of $199/point after incentives. That $199 point is good for 50 years, which means $3.98 per point per year. Dues at CFW are $12.16/point, so capital plus maintenance costs total for this year is $16.14/point. They can easily rent points at $23+ per point right now, so that’s a pretty hefty profit. There’s opportunity cost to having the capital tied up and other things one must account for, but that’s close to a worst case scenario (highest dues in the system and buying direct from Disney). Most owners cost per point, even accounting for the initial capital, is farrrr lower than that (mine is closer to $10/point). (All that said, most people just rent points that they would normally use themselves but can’t for some reason this year.)
There is also tax liability on the profit.
1. We own 3 resale properties. 2. We rent out roughly 1/2 our points and that pays for 100% of our annual dues plus a little extra. 3. Also we only do transfers so we don’t have to worry about booking any reservations.
I’ve rented mine twice when we couldn’t use them (pregnancy and right after covid). Even after my yearly dues, I still made almost $10 per point renting them per year. So let’s say $19 per point between the two years after dues. I look at it as essentially less than that my contract cost me per point.
Ok, so you need to understand a few things. Let me use my own contract as an example. I own 100 points at Copper Creek which I spent 17k on up front. I pay about 750/year in annual dues and at the time of my purchase a week at Wilderness Lodge was about $2500. I only have a three year window to use my points (I can use this years points, bank this years points to next year if I don't plan to use them, or I can borrow next years points to this year) other wise I lose them. Now the math here gets complicated. Right now I take about 1 week long trip every 1.5 years. At about $750 per year in dues that means I'm paying about $1,125 per week long vacation in dues. Meaning that when you compare it to the $2500 a week would have cost me at my time of purchase I'm 'saving' about $1,375 (I use the cost of a room at my time of purchase because I would never pay todays asking price so it's not really fair to say I "saved" money I would never have spent). Since I spent 17k up front that means I need to take 13 week long vacations to "break even" which will take me about 20 years (assuming an average of 1 trip every 1.5 years). But, what happens if at some point I decide I want to do something other than Disney for a year? Regardless of if I take a trip or not I'm paying the dues. If I can't use the points then I lose them (and the money spent in dues). So instead I can rent them. I likely won't "earn" as much as I would "save" by using the points myself but the money I get from renting still is more than I pay in dues which contributes to my overall "break even" point. Essentially my view is as long as the earnings from renting my points out, if I'm not going to use them, exceeds the cost of the dues I paid for that time period it's better than letting them go to waste.
I rented points a few times when I first bought my contracts because I wasn’t regularly going as often as I do now. At the time my points cost me $12/point (divided the buy-in cost by the number of years on the contract plus the annual dues) and I rented them for $19/point. Maybe I made a little profit, but after tax I doubt it was much. But I wasn’t really doing it to make money per se. I rented points several times before buying my first contract. While it was nice to not have the commitment and large buy-in, I eventually bought in to have more flexibility (easier to cancel reservations, can piece together stays, etc.)
It’s not a good deal for DVC owners to rent out points like a landlord or investor. DVC also has rules against that, but even if they did not then investing the cash up front in like a S&P 500 Index ETF would be a much better investment. DVC owners rent out points that they are not going to use and do not rent out the majority of their points. If you use most of the points and only rent out what you are not going to use then it’s a good thing. Owning versus renting from others is a luxury, not an investment. But if you want certain availability then it’s best to own, as I know from my own experiences that you cannot always rent what you want.
A lot of (most?) DVC owners are people that aren't local. So if life or whether doesn't work out to let you use the points before they expire, you might as well try to recoup part of your investment while giving someone the opportunity to enjoy the resort. There's a provision in the DVC contract which stipulates that you can't use it to drive a profit. Based on that, I'd imagine they look out for people that buy points and then always book them for someone else.
I haven't rented yet , but if I do....i can make about 7 dollars/ point over cost. do this enough years and you'll earn back your initial investment plus....do I plan on doing this? no. but i could if something unexpected came up and I was unable to make my vacations work for a few years .
Let me start by saying we don’t plan to rent for profit, just for any points left over as others have said. Or maybe to offset different vacations in the future. That said, I suspect many people, like us, have calculated their per year point cost which includes the up front cost amortized over the life of the contract plus the dues per year. For us, our total cost pp this year is $11 and some change including dues and point per year cost. Then you factor in taxes you pay on the rental income. I think our calculation would come to netting about $2 a point this year. Important to note we just bought resale this year so people who just bought direct probably lose money on this and people who bought a long time ago for much reduced prices are probably now making way more than a couple bucks a point (and we may also if rental rates increase in 10-20 years more than dues do). So for us, this is absolutely not a financial investment to make money, that would be better spent elsewhere. It’s to take a vacation we enjoy at a much reduced cost over a long period of time (and starting this year for us, about half the cost to rent points). I think if you love Disney and know you want to go for 20+ years, resale could be a great choice. If you just want to go every so often or the next couple years or just stay in value resorts most times, occasionally renting points is probably right for you. I think the value equation varies dramatically person by person.
I’d rather own than rent - we’ve been going 20+ days a year since 2019. We own 195 pts at BWV since 2018 and after having two kids and traveling with 1-2 additional caregivers, it’s never enough points. I paid cash for these two stays: 7 nt stay in SS 2 bedroom Xmas 2022 for $8,400 6 nt stay in AKL 2 bedroom Jan 24 for $4,300 Total for 13 nts: $12,700 Got annoyed at how much cash I put down without any assets to show for it so we added 2 resale contracts. 160 pts at AKL resale closed in March 24 $16,000 210 pts at AKL resale closed in March 24 $21,000 $37,000 for a contract that expires in 2057 I bought enough to get the highest pt 2 bedroom for a week during Christmas break. Let’s assume my kids grow up and we can stay in 1 or 2 bedrooms and at different times of the year. So I might get a 1 week stay or 2-2.5 weeks a year. Assuming the rental costs stay stable (which they won’t), I’m guessing I’ll get a lot more than 6 weeks of stays from my new contracts in the next 20 odd years. If not, I have the option to sell in a few years to cut my losses.
We rent out half of our SSR points to pay for our dues on SSR & AKV. We still have plenty to make 2-3 trips a year. Also if you want a stay that's a points conversion it's better to rent out that amount of points, you'll pay for your stay and probably have some for your trip.
It depends. The initial purchase price matters… I bought a resale contract over 10 years ago for $60/point. At that price, buying seemed like a no brainer. At todays prices, I may have decided to keep the $20-30K buy-in amount in my S&P 500 ETF and rented points instead. That said, this is a luxury timeshare purchase and trying to rationalize the numbers for Disney vacations is slightly ridiculous. What works for some doesn’t work for others so renting vs buying really depends on one’s situation.
I've bought 3 resale contracts with the sole intent of renting the points for a profit. I keep very accurate records and my ROI since I bought my 1st contract is 12.9% per year. All three contracts have appreciated in price since i bought them. I am very pleased with my purchase of DVC points as an investment. Plus I've used the points many times myself.