Arriving Guest Information [merged]

[Quilter]

Profit…..hmmmmm.

So is that profit based on recouping the 100k for investment then all m/f’s since beginning of ownership?

Rents are generally based on competition in the rental market. Take away the cost of m/f’s and it’s a relatively small profit if you bought developer week. In fact no profit if you figure you’re simply recouping a fraction of the purchase price.

 

[sponger76]

Profit…..hmmmmm.

So is that profit based on recouping the 100k for investment then all m/f’s since beginning of ownership?

Rents are generally based on competition in the rental market. Take away the cost of m/f’s and it’s a relatively small profit if you bought developer week. In fact no profit if you figure you’re simply recouping a fraction of the purchase price.

Well, if you're talking about what the IRS says, they do go further to say 'income,' which is a little bit different. But hey, people who want to rent will find any way to work the words to justify it. Plus, the IRS does say regularity. Then further down they do say "You do not need to make a profit to be operating a trade or business but you do need to have a profit motive." So you could be not yet net-positive, or you could even be losing money, but as long as you are intending to make money it's a business.

 

[pacman777]

If these timeshare companies want to stay in business and grow their customer base and increase shareholder value, then they should actually encourage people to buy and rent out their timeshares. It’ll be the next hot trend and the new younger generation needs to get into it cause from what’s been reported there’s an aging demographic of timeshare owners who are looking to get out of their timeshares and the younger generation aren’t at all interested in paying that much to be committed and tied down with a timeshare. Just let capitalism and free market run its course rather than trying to restrict and regulate it like Wyndham has recently which I hope goes out of business

 

[Dean]

I'm not disagreeing with you about how onerous the new process is for changing names on reservations. I was just engaging in the tangential topic of how to define commercial (business) use. We all know that pretty much all the major timeshare players prohibit "commercial" use, but most systems don't outright prohibit all renting. Most TUG users who've been around for a few minutes or more realize that there are as many opinions of what commercial use is as there are TUG members. Again, I was just responding to somebody who specifically asked if there was an IRS definition of renting as a commercial business.

No worries. I'd agree that most don't prohibit renting, actually I can't think of one that does completely, but some are more aggressive than others at trying. The only one I'm personally aware of where it's spelled out as allowed is DVC but there may be others. The problem is if they themselves rent it'd be almost if not impossible legally to ban renting. DVC has taken a not too different approach in that they require the names of all people in the room up front though this is variably enforced. Bluegreen restricts volume no matter the reason and they do it by region and timeframe. I suspect we'll see changes to this system within a few months that will make it less onerous but we'll see.

 

[RENTER]

Just google the question Does the IRS consider renting a commercial business? You will find that they do not and it does not qualify for the Qualified Business Income Deduction along with other business deductions. The exception is when someone is spending hours actively managing the property.

 

[dioxide45]

Just google the question Does the IRS consider renting a commercial business? You will find that they do not and it does not qualify for the Qualified Business Income Deduction along with other business deductions. The exception is when someone is spending hours actively managing the property.

I think this is the difference between claiming rents on a Schedule E vs a Schedule C?

 

[RENTER]

I think this is the difference between claiming rents on a Schedule E vs a Schedule C?

Yes

 

[jimf41]

Just got off the phone with MVC making another reservation. I asked about the " commercial purpose" clause and I was told that only applies to points reservations at resorts you don't own. I own at Ocean Pointe and Frenchman's Cove so I can use points at either of those to rent in any season even if I don't own that season. If I were to rent at an HHI property where I do not own and rent the week then that would be for a commercial purpose according to Marriott.

The reason I was given is that owners are complaining that they can't make reservations at their resorts because point owners from other resorts are snapping them up. If that truly is the case I don't see how their new policy could in any way fix that problem.

I'm happy renting just at the resorts I own, they rent quickly and for decent prices so this doesn't affect me that much but I do have repeat customers who like other resorts and I don't know how I'm going to handle that in the future.

 

[jwalk03]

Just got off the phone with MVC making another reservation. I asked about the " commercial purpose" clause and I was told that only applies to points reservations at resorts you don't own. I own at Ocean Pointe and Frenchman's Cove so I can use points at either of those to rent in any season even if I don't own that season. If I were to rent at an HHI property where I do not own and rent the week then that would be for a commercial purpose according to Marriott.

The reason I was given is that owners are complaining that they can't make reservations at their resorts because point owners from other resorts are snapping them up. If that truly is the case I don't see how their new policy could in any way fix that problem.

I'm happy renting just at the resorts I own, they rent quickly and for decent prices so this doesn't affect me that much but I do have repeat customers who like other resorts and I don't know how I'm going to handle that in the future.

I bet if you call back and ask a different rep the exact same question you would get a different answer.

 

[sponger76]

I bet if you call back and ask a different rep the exact same question you would get a different answer.

Exactly what I was thinking.

 

[VacationForever]

Just got off the phone with MVC making another reservation. I asked about the " commercial purpose" clause and I was told that only applies to points reservations at resorts you don't own. I own at Ocean Pointe and Frenchman's Cove so I can use points at either of those to rent in any season even if I don't own that season. If I were to rent at an HHI property where I do not own and rent the week then that would be for a commercial purpose according to Marriott.

The reason I was given is that owners are complaining that they can't make reservations at their resorts because point owners from other resorts are snapping them up. If that truly is the case I don't see how their new policy could in any way fix that problem.

I'm happy renting just at the resorts I own, they rent quickly and for decent prices so this doesn't affect me that much but I do have repeat customers who like other resorts and I don't know how I'm going to handle that in the future.

I can tell you that this is not MVC's "official" stance. The person who shared with me owned weeks at the location, but added points to the weeks and was flagged for commercial activities.

 

[DanCali]

The reason I was given is that owners are complaining that they can't make reservations at their resorts because point owners from other resorts are snapping them up. If that truly is the case I don't see how their new policy could in any way fix that problem.

There seem to be some contradictions in the excuse they gave you...

If weeks owners can't reserve weeks at the resorts they own, that is definitely not because points owners are scooping them up because those are not coming from the same inventory "bucket". That's like being upset at II members scooping up weeks at my home resort (that were previously deposited by other owners).

If trust points owners can't reserve weeks at the trust resorts they "own" because legacy points owners are scooping up those weeks, then that also can't be the case according to MVC. Haven't they been saying for 12+ years that trust points more powerful and have access to separate inventory?

And if it's legacy point people complaining about other legacy point people taking "their" inventory, that's part of the risk of exchanging. No exchange is guaranteed maybe because you dialed in 2 seconds late, the rep you got on the phone was not quick enough, the website was down (like this past morning), others booked longer stays that started earlier, owners didn't exchange their weeks for points etc. I'm looking to exchange DVC into Aulani at 7 months out - but am going to have backups with MVC booked at 13 months out and Vistana at 8 months out, just in case... Nobody should expect an exchange to just be there for them. If someone doesn't like it, they should buy where they want to go.

 

[DanCali]

So, I hope everyone can document all the presentations they have been on where this "benefit" was proffered as an inducement to buy, to counter the eventual crackdown on rentals.

Here is a text conversation I had with a MVC salesperson (name/resort shall not be posted here) trying to convince me to buy showing exactly what you're referring to. We did not go for this offer.

 

[dioxide45]

Here is a text conversation I had with a MVC salesperson (name/resort shall not be posted here) trying to convince me to buy showing exactly what you're referring to. We did not go for this offer.

View attachment 76219

This was the big push for us once at OceanWatch. Buy points and rent them out to pay all our maintenance fees and travel for free. Though I don't have the texts to prove it.

 

[jimf41]

Initially I was very concerned about this because we can no longer travel and I don't want to sell my weeks. After thinking about it I realized how impossible this would be to track and then try to enforce even if they did manage to track the commercial activity.

This threat is being made by a major corporation that can't even get a website to work after 20+ years that I've been using it. I'm no longer worried about their IT Dept catching anyone.

 

[DanCali]

Initially I was very concerned about this because we can no longer travel and I don't want to sell my weeks. After thinking about it I realized how impossible this would be to track and then try to enforce even if they did manage to track the commercial activity.

This threat is being made by a major corporation that can't even get a website to work after 20+ years that I've been using it. I'm no longer worried about their IT Dept catching anyone.

Abound is a huge exchange with 90+ resorts. An owner casually renting their week, or their points, or even using points to book a stay and then rent that stay is harmless. It's also pretty harmless in the grand scheme of things if you have some owners with 5, 10 or 15 weeks who do that with some unused ownership weeks. Some of these examples may be gray areas in the "commercial activity" realm, but pointing the finger at these cases is a red herring.

The problems really start when you have "entrepreneurs" and companies who will rent points from others for cheap and then use those points to book high demand weeks and lease those weeks out at much higher prices. They are probably not even owners (or own 1000 points just to be able to use Abound) and they may be moving around hundreds of thousands of points a year and grabbing lots of high-demand inventory. This type of activity, if it's happening, can dwarf whatever a casual retiree owner might be guilty of.

Here is a current listing from vacationpointexchange of someone who may be doing just that. I've seen others like this over the years.

And here is a corporation seemingly into this "business":

https://www.tcpointsrentals.com/
(website has a Florida address)

So, this activity is definitely going on...

One day we will likely all get collectively punished and the ability to rent will be much more restricted for everyone. But it won't be because of what regular owners are doing with their ownership.

(and I do realize there is now a 20,000 point transfer-in limit, but clever motivated folks may find ways to work around that too)

 

[igopogo]

That VPE post is so bizarrely over complicated. I recognize there’s some value the membership level if they are going to ask you to love a reservation for them, but not anywhere near that level of specificity. When I see something like that I assume it’s someone who doesn’t really know what they are doing. Mostly because I would write stuff like that when I was a kid and had no idea what I was doing.

And you’d have to be pretty hard up to rent those points for those prices.

 

[VacationForever]

That VPE post is so bizarrely over complicated. I recognize there’s some value the membership level if they are going to ask you to love a reservation for them, but not anywhere near that level of specificity. When I see something like that I assume it’s someone who doesn’t really know what they are doing. Mostly because I would write stuff like that when I was a kid and had no idea what I was doing.

And you’d have to be pretty hard up to rent those points for those prices.

Why is VPE complicated? I had rented out points once, to 2 different owners, during COVID. It was very straight forward. My objective was to get back MF when I could not use the points.

I had been asked to make reservations by others, which I had declined. If I wanted to rent reservations out, I wouldn't rent at the price of points which I was renting out. I would make money by renting out reservations through redweek or similar site, but I didn't because I didn't want the hassle and potential issue with rentals.

 

[dioxide45]

That VPE post is so bizarrely over complicated. I recognize there’s some value the membership level if they are going to ask you to love a reservation for them, but not anywhere near that level of specificity. When I see something like that I assume it’s someone who doesn’t really know what they are doing. Mostly because I would write stuff like that when I was a kid and had no idea what I was doing.

And you’d have to be pretty hard up to rent those points for those prices.

That is a points broker that is making reservations with the points that owners own and then renting out individual reservations. They are willing to pay more for higher levels inside 30 and 60 days because of the points discounts. Also willing to pay for points that are further out.

I now know of three full fledged businesses that do this on a large scale and I am sure there are many more. These brokers can get by better than owners that rent out large volumes of reservations. A points broker can work with 100 owners to rent 100 reservations, but to Marriott it just looks like 100 different owners out of 700,000. Much different than one owner renting 100 reservations. The latter is going to draw much more attention than the former.

 

[DanCali]

Why is VPE complicated? I had rented out points once, to 2 different owners, during COVID. It was very straight forward. My objective was to get back MF when I could not use the points.

I had been asked to make reservations by others, which I had declined. If I wanted to rent reservations out, I wouldn't rent at the price of points which I was renting out. I would make money by renting out reservations through redweek or similar site, but I didn't because I didn't want the hassle and potential issue with rentals.

Herein lies the problem with VPE. There are Trust points owners who pay $0.70 in MFs and there are legacy point owners who pay as low as $0.30 per point in MFs (albeit some pay much more). Those who pay $0.30-$0.40 per point and just want to rent quickly drive down the price per point to below $0.70, a price at which Trust point owners are probably not willing to rent. This will certainly drive some Trust point owners to rent exchanges.

Earlier in the year, the VPE price for 2023 points was $0.69-$0.72. When I looked yesterday, prices were lower - around $0.65, which is the same price from 3-4 years ago. This may be driven by some Vistana owners who elected points for their Platinum Lagunamar or Maui OF weeks (very low MF per point) and therefore there was an increase in supply. But these disparities in MFs are really distorting the market.

It is a bit ridiculous that we can give people advice not to buy points because you can rent as much as you need for a cost lower than MFs. Today, you can go on VPE and rent enough points to book a 2BR Waiohai summer reservation (4850 points) for $3200. That's substantially less than the going price on Redweek ($4000-$4500) for similar reservations. I've also had savvy renters approach me on VPE and ask me to book off-season reservations for them at $550 (800 pts) for 2 weeks in a 2BR - which is about $40/night...

I would much rather see a vibrant point rental market that satisfies the need for smaller point rentals (to complete reservations) with points renting at $1.00-$1.50. I am sure there are many owners (including me) who prefer to rent out an unused week because renting the elected points at these rates would generate 30% to 40% less (e.g., NCV Platinum 3475 points or $3500+ for renting the week). Higher rental values would increase Abound inventory, make retail points purchases more attractive, and make it less attractive financially for brokers/companies to book hundreds of high-demand weeks and rent them out for a substantial profit (also helping Abound inventory). And those who truly need 500-1000 points to complete a reservation wouldn't be impacted by that much, and should probably be paying a premium anyway for what they are trying to accomplish.

This seems to work much better at DVC (we're new owners) where MFs are generally $7-$9 per point but owners can rent their points at substantially higher amounts (seems to be $16-$20) and even DVC will rent owners a limited amount of one-time-use points for $22/point to complete reservations.

 

[Dean]

I don't think timeshares have ever truly been completely market driven simply because they are a fringe product for the majority of the vacationing population. That said, market forces are still what they are if one wants to rent, a commercial venture may be a more favorable position to find potential renters and charge more. I would suggest that propping up the market because many have higher Per Point costs than others is not a workable approach. I'm sure those renting would rather have as high a return as possible, I know I would if I rented. DVC has always been a bit of an outlier in part due to the super high prices involved for direct Disney reservations and the comfort level with Disney in general. Still when you look at renting Disney out as an owner, it's a poor deal when you also consider the acquisition costs. MVC overall is still a better potential return though more with top weeks than points though there are exceptions there like those who's acquisition costs AND PP fees are fairly low such as a Tahoe fractional.

 

[VacationForever]

Why is VPE complicated? I had rented out points once, to 2 different owners, during COVID. It was very straight forward. My objective was to get back MF when I could not use the points.

I had been asked to make reservations by others, which I had declined. If I wanted to rent reservations out, I wouldn't rent at the price of points which I was renting out. I would make money by renting out reservations through redweek or similar site, but I didn't because I didn't want the hassle and potential issue with rentals.

We decided to spend 18K Destination Club points this year on a Collette tour, and lose about $2K in the difference between MF and cash price, but I prefer to do this than to go through the hassle of point rental.

 

[DanCali]

Why is VPE complicated? I had rented out points once, to 2 different owners, during COVID. It was very straight forward. My objective was to get back MF when I could not use the points.

We decided to spend 18K Destination Club points this year on a Collette tour, and lose about $2K in the difference between MF and cash price, but I prefer to do this than to go through the hassle of point rental.

So is it straighforward? Or is it a hassle? Or both

 

[VacationForever]

So is it straighforward? Or is it a hassle? Or both

Straight forward but I don't want to deal with renters.

 

[igopogo]

Why is VPE complicated? I had rented out points once, to 2 different owners, during COVID. It was very straight forward. My objective was to get back MF when I could not use the points.

My comment was about the post on VPE, not VPE itself. VPE is a great resource and very easy. The post with >10 levels of offering prices is way over the top.