Renting DVC Points --- like a Ponzi Scheme

[Steamboat Bill]

Now that I got your attention, I wanted to create a thread to WARN people about the potential DANGERS of buying MORE DVC points than you really need with the sole intention of RENTING all these extra points to make a profit.

Renting DVC points is NOT a Ponzi scheme, but the irrational exuberance that I am reading on a few threads is certainly reminds me of Bernie (can't lose) Madoff.

One one hand, there are a few individuals that indeed rent DVC points for a profit and, by all accounts, appear to have a pretty nice profitable small business enterprise going (at least based upon the past).

Then there are others that are new to the game and are posting - gee this is pretty easy money, perhaps I will add-on and rent even more points and make even more money.

Then there are the other pixie dust dreamers that post - I am considering buying more points just so I can rent them out and make some money or become a part time travel guide or supplement their retirement.

WARNING WILL ROGERS WARNING

I have been a DVC member since 2001 and will agree, under the right circumstances, renting your excess points can be a nice way to make a small profit off something you already own or even offset some of your annual dues.

However, anyone contemplating buying MORE points than they really need or can afford, just so they can join the point rental game is playing with fire and will get burned.

I have seen this too many times than I can count and the mob trend and mindset is always the same --- This is such easy money, I am going all in.

Just like Joe Kennedy said he SOLD all his stock in 1929 (just before the crash) because when he went to get his shoes shined, the shoe shiner was trying to sell him on some hot stock tip and he figured that this for sure was a bad sign that the market has peaked, I am warning people about the dangers of trying to compete with Disney.

I am not implying the DVC market has peaked or crashed, I simply want to WARN everyone that DVC is about a prepaid vacation to DVC resorts and not an opportunity for people to create a rental business.

There are several pitfalls that most people do not consider:

1. There are only 2-3 places to easily rent points (MO, DIS, and another DVC board). If these boards stop allowing point rentals, you are in trouble.

2. eBay is not a great place for DVC point rentals and the lowest price is usually the winner.

3. There used to be only ONE major broker (Daddio) and now there are 3 or 4. If they stop taking points from people, for whatever reason, you will have to do it on your own.

4. If DVC begins to crack down on rentals, for whatever reason, all bets are off - you are hosed.

5. The economy goes up and down, Disney promotions go up and down. Right NOW the rental market appears to be healthy, but is can and has had times of excess rental points, and guess what, the prices go down or the points go to waste.

6. In the past (pre-Internet), nobody would even consider renting points to a stranger, now is is simply accepted that this is trouble free....very funny.

7. There are a few reports of problems with rentals (from both sides) that will make you cry. I am glad these are rare, but they really have happened. One bad rental will wipe out years of good rentals.

8. The IRS may want a piece of the action. If you rent and don;t pay taxes....well, good luck with that.

There are a ton more pitfalls, and anyone can post here about the dangers of renting.

Remember, I am NOT against renting points, I am however, against the average person going out and buying MORE DVC points than they really need with the sole intention of renting them out.

If you are a a DVC pro or seasoned member that has rented in the past and can afford to absorb the annual dues if a crack down ever happens, then by all means, buy more points and let'er rip.

On the other hand, if this thread has caused you to pause and rethink the hair-brained plan to get rich off DVC point rentals, then I guess I will accept your thanks.

[PlasWinder]

Anyone else looking for a little disclosure from the guy trying to talk everyone out of renting points?

How many points did Steamboat Bill rent last year?

[FrankPhillips]

I totally agree with you, Bill.... but what (pray tell) drove you to post now? Just curious....

[ChisoxGreg]

Originally Posted by Steamboat Bill

can afford to absorb the annual dues if a crack down ever happens, then by all means, buy more points and let'er rip.

IMHO this is the most important part. If you can't afford the MF's w/o renting it is very risky

[Steamboat Bill]

Originally Posted by PlasWinder

Anyone else looking for a little disclosure from the guy trying to talk everyone out of renting points?

How many points did Steamboat Bill rent last year?

I did admit renting some of my points last year (mainly to a previous renter). Go ahead and search my posts (I have about 4,000) and see how many I rented or how often I rent (not that significant) or even when was the last time I rented (a while ago).

If you are implying I don't want competition, you are wrong.

I am NOT ready to disclose anything yet, but I am actually in the final stages of selling one of my largest DVC contracts (passed ROFR obviously) as the sales price was so good, it was better to sell than continue to rent (go figure).

Thus, I will have even less points for 2013.

Originally Posted by FrankPhillips

I totally agree with you, Bill.... but what (pray tell) drove you to post now? Just curious....

I have been feeling that lately (past few months) and the latest threads on how easy it is to rent really made me think...this is getting like a Ponzi Scheme. Not that actual scam, but the group mentality that this is so easy, even a caveman can do it.

[I'mNoPrince]

I say Let them Buy them all up and Rent as much as they can until the bottom drops out. I say this as I may need to rent some points down the road and would like to pick them up on the cheap (you know when the bottom drops lol). Or even better I can just Buy them on the cheap when I get some real Cash on hand.

I agree Bill I see many New Owners after a 1st stay come on here and talk about Buying More just to cover expense as so many others are talking about doing the same.

[Goofygrl]

Originally Posted by Steamboat Bill

WARNING WILL ROGERS WARNING

[DVCERSINCEDAY1]

Originally Posted by Goofygrl

i think it's will ROBINSON (lost in space robot).

you tell 'em SB! the rental market is extremely volatile...up/down, rci dumping, dvc restrictions, more folks own today as they buy in, rental market goes down...it's always something and never know what the future holds. now market is good, wasn't good six months ago, no telling what it will be six months hence.

warning, will robinson, warning!

[Chriskre]

I only own a small contract so really don't have much to rent out, but I have seen other TS systems where they have put a stop to renting points because obviously it is competition for the developer.

Will Disney do this in the future? Who knows? It is possible though as have other large TS developers like Wyndham and Hilton.

Developer controlled resorts which Disney is, can make rules that although wouldn't forbid renting, would make it unprofitable like requiring reservation fees, guest certificate fees and housekeeping fees. Developers do not like rental competition. Wyndham which owns RCI BTW, kicked alot of owners in the teeth by making renting very unprofitable for mega point owners. So I'd say, never say never cause you never know.

[Yogi3323]

Originally Posted by Goofygrl

Originally Posted by DVCERSINCEDAY1

i think it's will ROBINSON (lost in space robot).

you tell 'em SB! the rental market is extremely volatile...up/down, rci dumping, dvc restrictions, more folks own today as they buy in, rental market goes down...it's always something and never know what the future holds. now market is good, wasn't good six months ago, no telling what it will be six months hence.

warning, will robinson, warning!

Danger will Robinson ... Danger?

As to the real point of the message .. Definitely agree. It's like then flipping a house ... It's soooo easy to do and make a ton of cash .. Until the market hits bottom