When do you decide you have enough DVC points?

[pianomanzano]

I do not recall on what thread or if it was even this site but I saw a post by someone with a significant number of points and they mentioned selling some number of points every year to offset the yearly dues

They had worked out some formula that took them over the points they actually wanted to use and bought more to offset the maintenance fees for all they owned

It seemed risky and complicated to me but seemed to work for them

I see posts like this here and on FB of people who do this. Personally I think it's a horrible idea. Assuming a rental income of $20/pt and dues of $8/pt, you'll always need to rent out 40% of your points to get "free dues". That's not even accounting for taxes on that rental income, variation in dues, and most importantly the initial buy-in of the points used just for rental. Better off just buying a smaller amount of points and putting that initial buy-in for the points that would be rented towards other investments or purchases, imo.

 

[Carol_]

How many points would it take to get a guaranteed week for each week of the year?

I guess I could make do with a 2 bedroom with enough unassigned points to upgrade to a 3 bedroom villa a couple weeks a year.. you know… when extra family comes to visit.

…
We currently have 360 BCV points. We had been tossing around buying another 150-175 at VGF before the price went up a few days ago. We decided for our purposes (both have jobs with a 13 and 11 year old) that we can’t manage to use many more points right now. We have more than enough for a 1br for a week each year then left over to do a 2 br or extra trip every couple years. We can’t get away and all the way to WDW any more than that.

If Dollywood ever gets a vacation club for their resorts (2nd one opens next year) that would be a “take my money” situation as we are close enough for weekend trips.

I know you’re just kidding, but I vaguely remember someone somewhere saying you can only spend a certain number of weeks per year on property, so that you can’t legally become a resident of Reedy Creek.

 

[tom1944]

I see posts like this here and on FB of people who do this. Personally I think it's a horrible idea. Assuming a rental income of $20/pt and dues of $8/pt, you'll always need to rent out 40% of your points to get "free dues". That's not even accounting for taxes on that rental income, variation in dues, and most importantly the initial buy-in of the points used just for rental. Better off just buying a smaller amount of points and putting that initial buy-in for the points that would be rented towards other investments or purchases, imo.

I believe the post I saw said many of the points were purchased at the $65 dollar area and that is why it might have worked.

I did the math of buying 400 points and selling 100 every year and I could not see how it worked The cost of the 100 points to sell eats up any savings

 

[AnnaS]

If you have the time, flexibility, the passion for it and the means..........you stop at whatever number makes you happy.

 

[macman123]

You can NEVER have enough.

Pre Covid I had 0 points.

I now have 3,700 points spread across 6 resorts and 30+ contracts.

But all one UY! Rent enough to pay for the dues on them all, which is what I do.

 

[tom1944]

You can NEVER have enough.

Pre Covid I had 0 points.

I now have 3,700 points spread across 6 resorts and 30+ contracts.

But all one UY! Rent enough to pay for the dues on them all, which is what I do.

Can you walk us through that

What is your average cost per point and how many points do you rent to cover almost $30,000 of dues?

 

[macman123]

I rent probably 1,500 and use the rest on 1BR, 3BR etc.....

Average cost pp is hard to say:

SSR $95
BLT $150
VGF - direct
AUL - direct
RIV - direct
PVB - I havent got many so can't remember

 

[tom1944]

I rent probably 1,500 and use the rest on 1BR, 3BR etc.....

Average cost pp is hard to say:

SSR $95
BLT $150
VGF - direct
AUL - direct
RIV - direct
PVB - I havent got many so can't remember

Does this process work at a lower level. As I mentioned in a post above I could not make the numbers work at 400 points renting 100 of them. Do you have to be at renting 40% of your points for the math to work

And is the rent enough to cover the dues plus the cost of 40% of your points?

 

[crisi]

On the other end, I have 150 and its too many. It was just enough when the kids were younger, but now that the kids are adults, we seldom want to be at Disney.

 

[tom1944]

On the other end, I have 150 and its too many. It was just enough when the kids were younger, but now that the kids are adults, we seldom want to be at Disney.

How often do you go?

Can you bank and borrow and take 1 trip every 3 years?

 

[hobbes42]

Does this process work at a lower level. As I mentioned in a post above I could not make the numbers work at 400 points renting 100 of them. Do you have to be at renting 40% of your points for the math to work

And is the rent enough to cover the dues plus the cost of 40% of your points?

It only works if you can afford to lock up money in points. It takes renting between 40% and 45% of your points to pay the dues on all of your points. You aren't going to get rich by having a ton of points and renting them. But it does (somewhat) lock-in the price for accommodations of future trips. I have 1750 points and rent out between 800 and 1000 each year, paying for annual dues and APs for 4 people. The 1750 points are spread across 8 contracts, 5 resorts and 2 use years. It works for us, but we look at it as an investment in future vacations. I wouldn't recommend this as a strategy for everyone.

 

[tom1944]

It only works if you can afford to lock up money in points. It takes renting between 40% and 45% of your points to pay the dues on all of your points. You aren't going to get rich by having a ton of points and renting them. But it does (somewhat) lock-in the price for accommodations of future trips. I have 1750 points and rent out between 800 and 1000 each year, paying for annual dues and APs for 4 people. The 1750 points are spread across 8 contracts, 5 resorts and 2 use years. It works for us, but we look at it as an investment in future vacations. I wouldn't recommend this as a strategy for everyone.

I understand that part but I don’t understand how you recoup the original cost of the 40 to 45% of the points

Or is the calculation that you will recoup the cost once you sell those points?

 

[hobbes42]

It was never my intent to recoup the cost in the short term. Long term, I will recoup that cost if I sell the contracts. Otherwise, our oldest son inherits the problem.

 

[tom1944]

I did the back of an envelope math and it seems to me that you are tying up a good chunk of money but getting a return of about 10%. Obviously I do not know your exact data but it now actually makes sense to me

10% in until recently a zero% interest environment is excellent

 

[vdangelo239]

We have 250 points. Started off with 150 points at Poly, then added another 50 points at Poly, then another 50 at BW. I do think we are good now. I was dang close to adding on another 50 to 100 points a few weeks ago, but honestly it isn't the cost of DVC - it is the cost to fly my family of five to Orlando from Boston more than twice a year that would break the bank for me. I will likely add on 50 more at some point - but don't see us going above 300 in total.

 

[DonMacGregor]

Decided we had enough at the original 150 we bought direct, then when we added on to reach 250, then when we added on again to reach 350, and once again when we added on to reach 450...

 

[Sandisw]

I did the back of an envelope math and it seems to me that you are tying up a good chunk of money but getting a return of about 10%. Obviously I do not know your exact data but it now actually makes sense to me

10% in until recently a zero% interest environment is excellent

I think some that use this type of set up is to have the dues covered so that the cost of DVC remains just the buy in cost.

 

[tom1944]

I think some that use this type of set up is to have the dues covered so that the cost of DVC remains just the buy in cost.

I guess the calculation needs to be where is the cutoff

Can this work at 500 points or less as long as you are willing to rent 40%+

If I wasn’t married I would try it but my wife gets nervous with our money in an index fund

 

[hobbes42]

I think the cutoff is found by deciding how many points you will use a year, and then add enough to cover the dues.

 

[Sandisw]

I guess the calculation needs to be where is the cutoff

Can this work at 500 points or less as long as you are willing to rent 40%+

If I wasn’t married I would try it but my wife gets nervous with our money in an index fund

I think it’s about 45 to 50% of your points when consider tax implications.

So, I have 900..I think renting 450 at $18/pt would cover the dues for me.

But, I use all my points so for me to make it work, I’d need another 800 to 900.

For me, I’d rather just pay my about $5600 a year and be done with it. Too much work.

However, I do rent or transfer points if I am going to do a different type of trip in place if one of my 6 trips to WDW and the use that to cover it. For example I rented a 100 points in 2019 to cover a cruise.