Rentals of point reservations - Is this really a profitable activity?

[DRH90277]

It seems I read every day about MVC clamping down on rentals of points reservations and about this being a big problem. And then, every sales presentation we attend advises rentals as a great way to pay maintenance fees and make money and "as a reason to buy." It's as though MVC sells us too much and then complains when us poor owners try to survive this luxury. My view is that MVC should control their damned sales force and stop having them share their exploits and handouts - remember "when they hand you this stuff they are reaching for your wallet."

We are users of our weeks and point reservations unless we get in a pinch - maybe having too much of this stuff at times. I can honestly say that I have never profited from timeshare other than in use - "timeshare is an expense not an investment."

Rentals from purchased points - It does not appear that any money is to be made from purchased points and resultant points reservations merely due to the maintenance fees and upfront cost. I look at obvious points rentals and then look at the points expended to get these reservations - in most cases the rental price is not that much over the maintenance fees. Now that's a great business model, invest a large lump sum upfront for the points, pay the maintenance fees, and then disregard the upfront amount and brag about how much you made in the margin over the maintenance fee.

Now, I am sure there are some who will brag about their prowess in use of points to acquire a Grand Chateau reservation during a game week and then rent it out for big bucks. These could be profitable but are likely "one-offs" and are probably not a sustainable business.

Rentals from points reservations resulting from deposit of enrolled weeks - This is most likely the problem area as many of us have old weeks with lower maintenance fees than those imposed on "purchased points" owners. The Abound program is "naked without our deposited weeks" due to the lack of good Trust inventory. MVC should not complain about use of these points when they need our weeks to avoid the deficiencies of the points program in terms of available reservations.

Rentals of owned weeks - MVC may be motivated to discourage this to motivate deposit of these weeks for the points program. Our owned weeks are the best part of our timeshare experience.

Sorry for this long-winded writing but it got a bit out of hand - swirling thoughts early this morning. Only stopped now to take the Toby the dog out for a walk. You likely have better ideas. Have a good day.

Only my view......

 

[jmhpsu93]

I rent maybe one or two points reservations in a given year depending on my travel requirements. There are some locations where points reservations still bring a decent ROI through rentals though most times it's roughly break-even. Agree that it's not a sustainable business, and it shouldn't be. It should be a way for an owner to offset some part of their maintenance fees.

 

[StevenTing]

For the most part, I refuse to rent at MF levels. For my point reservations, it would have to be at 0.80 or more right now. Just ran into this situation with my Ko Olina week. Was asked to split and rent out the studio portion. Fair market rate based off rates on Redweek was $2500-$2700. The person indicated based off number of points required and at current rate at VPE that it should be closer to $1650. I’m not interested at renting at that rate, especially when I have to pay a fee to split the unit up.

If I’m renting at MF levels, it’s because you’re a close friend or there are some extraordinary events going on.

 

[DanCali]

The person indicated based off number of points required and at current rate at VPE that it should be closer to $1650. I’m not interested at renting at that rate, especially when I have to pay a fee to split the unit up.

I advertised points last year on VPE and someone wanted me to make a reservation for them for the points rate of $0.70/point. It was a great deal for him - $40/night in a 2R - but when he came back later for another reservation, I told him I am not doing that anymore. More so now when it appears MVC are frowning on point reservation rentals. I'll either rent my weeks or transfer points.

 

[BarbmC]

I agree we are getting mixed messages from MVC sales. During a presentation in November, when we told them we were likely to retire the following year, there was a push to buy more points so we could rent them out to cover our MF. I have rented our Aruba week (when we have other plans) and have done ok. I do not recall the rent and off-set pitch at all when we first became owners, seems to be a more recent development.

 

[vol_90]

It seems I read every day about MVC clamping down on rentals of points reservations and about this being a big problem. And then, every sales presentation we attend advises rentals as a great way to pay maintenance fees and make money and "as a reason to buy." It's as though MVC sells us too much and then complains when us poor owners try to survive this luxury. My view is that MVC should control their damned sales force and stop having them share their exploits and handouts - remember "when they hand you this stuff they are reaching for your wallet."

We are users of our weeks and point reservations unless we get in a pinch - maybe having too much of this stuff at times. I can honestly say that I have never profited from timeshare other than in use - "timeshare is an expense not an investment."

Rentals from purchased points - It does not appear that any money is to be made from purchased points and resultant points reservations merely due to the maintenance fees and upfront cost. I look at obvious points rentals and then look at the points expended to get these reservations - in most cases the rental price is not that much over the maintenance fees. Now that's a great business model, invest a large lump sum upfront for the points, pay the maintenance fees, and then disregard the upfront amount and brag about how much you made in the margin over the maintenance fee.

Now, I am sure there are some who will brag about their prowess in use of points to acquire a Grand Chateau reservation during a game week and then rent it out for big bucks. These could be profitable but are likely "one-offs" and are probably not a sustainable business.

Rentals from points reservations resulting from deposit of enrolled weeks - This is most likely the problem area as many of us have old weeks with lower maintenance fees than those imposed on "purchased points" owners. The Abound program is "naked without our deposited weeks" due to the lack of good Trust inventory. MVC should not complain about use of these points when they need our weeks to avoid the deficiencies of the points program in terms of available reservations.

Rentals of owned weeks - MVC may be motivated to discourage this to motivate deposit of these weeks for the points program. Our owned weeks are the best part of our timeshare experience.

Sorry for this long-winded writing but it got a bit out of hand - swirling thoughts early this morning. Only stopped now to take the Toby the dog out for a walk. You likely have better ideas. Have a good day.

Only my view......

Can be but with significant risks to get any kind of ROI. I believe we would be looking at less than 1% who could actually make this work and definitely not something to get into today with rising MF's and CD's paying 5.5%. We have established a portfolio during our pre-retirement years while we had the cashflow to do so. To bridge the gap between now and retirement we use some and rent the rest. There are many opportunities with resorts in California, Florida and South Carolina (drivable) to obtain non-prime week / season reservations (some under 60 days) and get close to $1 per point lowering risk by always using borrowed points. At least that has been our experience in 2023. This covers all MF's plus a taxable return. It would take several years to fully recoup our buy in but that wasn't our motivation. This is our future multi-location 2nd home to enjoy with family and friends.

If Marriott prevents us from renting then I guess we will just have to retire early

 

[curitiba_tapley]

We too have been in many sales presentations where renting out a week, secured using Abound Points, to offset maintenance fees was one sales technique used to entice buying additional points. I have, rented out a week or two over the past couple of years via Redweek. There are two keys for me to make this work. First, finding the right resort and week to rent is essential. Doing a little research and math to get a high Rental Price (e.g., Redweek price) to Point Cost ratio (e.g., Abound points) and where it appears there is always demand. I'd really enjoy more data from Redweek (or other sources) to help figure out best pricing, room types, and weeks, but there is enough to make some educated guesses as to good selections. Second, just like I plan out 12/13-months for my family's next MVC vacation, I too plan out potential rentals at the same time. In the end, I have been able to offset some, not all of the annual MFs.

 

[davidvel]

I think we need to start a thread/sticky where we can all post our presentation details where we are told we should and can rent our weeks/points for big bucks. Post the date, salesperson and what they said. We know MVC looks at these forums. With a documented thread it will protect those who rent a few weeks but are demanded to indemnify MVC and all the other hoops.

I'll start. Our Salesperson was Kenny Fife at Mountainside on 3/28/23. Not only did he tell us we should buy points to rent out, he pulled a check out of his wallet and said he had a rental agency rent out his prime ski weeks/points (can't recall) and the check was over $10K.

 

[frank808]

Can be but with significant risks to get any kind of ROI. I believe we would be looking at less than 1% who could actually make this work and definitely not something to get into today with rising MF's and CD's paying 5.5%. We have established a portfolio during our pre-retirement years while we had the cashflow to do so. To bridge the gap between now and retirement we use some and rent the rest. There are many opportunities with resorts in California, Florida and South Carolina (drivable) to obtain non-prime week / season reservations (some under 60 days) and get close to $1 per point lowering risk by always using borrowed points. At least that has been our experience in 2023. This covers all MF's plus a taxable return. It would take several years to fully recoup our buy in but that wasn't our motivation. This is our future multi-location 2nd home to enjoy with family and friends.

If Marriott prevents us from renting then I guess we will just have to retire early

You two can always retire at MKO and we can be neighbors most of the year.

 

[frank808]

I booked a week at 2br OFD week at Westin Kaanapail for July 1-8 2023. Family was going to use it. Then about 2 months ago they changed their mind. I did not want holding points so decided to try and rent it out. So I tried renting it out at equivalent of 70 cents a point for reservation. No takers until i hit 60 cents a point. Then it rented within 30 minutes of adjusting price from 65 cents to 60 cents a point.

Could be that I listed it to late at only 58 days out. I thought people would be happy to rent a week at Westin Kaanapali in an ocean front deluxe (corner villa) for $6300 week (points equivalent at 70 cents a point). Have to educate family that timeshares are not like hotel bookings, where you can cancel so easily without penalty. Unfortunately older relatives find this hard to grasp.

This is my unintended foray to renting out a points reservation. Definitely not worth the time for me.

 

[DRH90277]

Interesting, I wonder if I could get an invite to the MVC sales training on maximizing profits from renting timeshares. I would attend this for 90 minutes, no cash reward or toaster.

 

[dioxide45]

I booked a week at 2br OFD week at Westin Kaanapail for July 1-8 2023. Family was going to use it. Then about 2 months ago they changed their mind. I did not want holding points so decided to try and rent it out. So I tried renting it out at equivalent of 70 cents a point for reservation. No takers until i hit 60 cents a point. Then it rented within 30 minutes of adjusting price from 65 cents to 60 cents a point.

Could be that I listed it to late at only 58 days out. I thought people would be happy to rent a week at Westin Kaanapali in an ocean front deluxe (corner villa) for $6300 week (points equivalent at 70 cents a point). Have to educate family that timeshares are not like hotel bookings, where you can cancel so easily without penalty. Unfortunately older relatives find this hard to grasp.

This is my unintended foray to renting out a points reservation. Definitely worth the time for me.

I bet if you charged them the rental rates (up front), they would be less likely to cancel...

 

[dioxide45]

It certainly must be profitable, there are several large operations (like those that rent DVC points) facilitating rentals of either their owned points or points reservations from other owners. These people aren't going to do all this for free. Realize that many people renting points are paying far less than the trust point $0.68pp by renting points from converted legacy weeks.

 

[vol_90]

You two can always retire at MKO and we can be neighbors most of the year.

At this time we don't own enough to retire at MKO. Covid did help us stay 6 months with you leveraging Points, II exchanges and II Getaways. You live in a great place with incredible views and sunsets! See you in 2025 for a few weeks.

 

[Retired2025 aka AlmostRetired]

Just started renting points from owners last year to learn for retirement. I rented a hefty number of points between 2023 and 2024. Why, this year 38 family members on going on a cruise for my moms 94 birthday and I am using points to extent the trip at Crystal Shore for 4 days for almost half after the cruise. . My kids can’t go on the cruise so in 2024, I am renting a 3 bedroom Crystal Shore for my kids and I and 2 Bedroom for my mom and her aid (my mom lives in Florida ). Lastly, i rented points for a friend to join me down at the GO the end of August.

Just as I speak to anyone I rent my deeded owned week to, I will not rent points from anyone I don’t speak with or chat with. I am learning a lot about using points but also about the renting point environment. Granted I spoke with maybe 6 people so a small sample size, but i think it is still valid. Some of my points are my own observations. Maybe beliw is obvious to most but it wasn’t to me because I gave it no thought until I started renting points. Also most legacy week owners and trust owners are not as knowledgeable as TUG members so they don’t know how to work the system. If you disagree, join some of the Marriott Facebook groups and read the comments.

- Trust Point owners are at a disadvantage and will always be when renting points in terms of making money or breaking even. Every point i rented was from legacy owners because most have a very favorable cost per point in the low 40 cents (MF/points). This will keep down the price of trust points rentals.
- The Grand Chateau is a great trader but a terrible renter. Almost half my points came were from legacy owners from this resort. I do not know the answer but I can’t believe this is the only resort where renting legacy week points is much more profitable than renting weeks,
- Using Redweek for renting weeks has become a little more complicated because of using verified and protected and the 1099 that comes along with it. The older you are the more you use this feature. Areas that require state tax are moving some legacy owners to covert to points and rent the points instead of using Redweek. It doesn’t matter who pays the state tax, it adds more complication. Take 40% with legacy points and avoid complication
- The points I rented for 1 year in advance I paid 70 cents for. In the same year, I paid as low as 60 and as high as 67. Nice profit for the legacy owners, small profit to a small lose for trust points.

A 40% return almost every rear is not a bad business for legacy week owners for little effort. It also has an inflation adjustment because as their MF goes up, so does the trust point MF. Maybe all the changes Marriott is making is targeted at legacy owners to lessen renting points. It frustrates all point participants using points because while it adds to the pool of weeks that can be used for points, it also adds to the number of people going after the weeks using points. It is a net zero gain of weeks and points.

 

[mbstn6254]

We too have been in many sales presentations where renting out a week, secured using Abound Points, to offset maintenance fees was one sales technique used to entice buying additional points. I have, rented out a week or two over the past couple of years via Redweek. There are two keys for me to make this work. First, finding the right resort and week to rent is essential. Doing a little research and math to get a high Rental Price (e.g., Redweek price) to Point Cost ratio (e.g., Abound points) and where it appears there is always demand. I'd really enjoy more data from Redweek (or other sources) to help figure out best pricing, room types, and weeks, but there is enough to make some educated guesses as to good selections. Second, just like I plan out 12/13-months for my family's next MVC vacation, I too plan out potential rentals at the same time. In the end, I have been able to offset some, not all of the annual MFs.

On a recent presentation at Shadow Ridge the salesperson also pushed hard on buying points and then renting them to cover the annual fees. He even went so far as to to tell me I would be a client of his, and he would advise me of the best places to rent points based on events in the area. He said he would actually call me and advise me with enough time to complete the transaction. I kept the card of the salesperson who first sold me points. She was going to be my personal travel advisor and would be in contact with me. I showed him the card and asked him how many times did he think I heard from her or anyone else as my travel advisor?

What I can't figure out in the rental thesis, is how do I account for the $48,000 up front cost so I can buy 3,000 more points. I will never recoup that. So what's the attraction of renting points to cover annual fees when the purchase itself is worth almost zero 10 seconds after the contract is signed?

Years ago I attended a presentation after my first purchase. After the second presentation and having a better understanding of the MVC business model, instead of buying points I bought an equivalent amount of MVC stock, $20,000. The stock is now worth almost $55,000 with a nice dividend every year. Beats the hell out of buying points and renting them. So now when I hear a presentation and realize the proposal is not in my best interests as a "valued owner", it is in my best interest as an MVC shareholder.

 

[hangloose]

Years ago I attended a presentation after my first purchase. After the second presentation and having a better understanding of the MVC business model, instead of buying points I bought an equivalent amount of MVC stock, $20,000. The stock is now worth almost $55,000 with a nice dividend every year. Beats the hell out of buying points and renting them. So now when I hear a presentation and realize the proposal is not in my best interests as a "valued owner", it is in my best interest as an MVC shareholder.

Interesting comment. I recall when the Marriott Vacations Worldwide was first established after splitting from larger Marriott Hotels, with its own stock. It was cheap then...at <$20/share. It kept rising, and I thought there was no way it would keep going up and up based on the Vacation Club Pts program. I was skeptical at that point. Well, MVW kept selling the new program, kept growing revenue ...and their stock is well ahead now at $125/share. As an MVCI week owner who is invested in their timeshares, I wish I had invested in their stock back then. It's had decent growth throughout the years.

Back to the thread. You can make some money renting Vacation Club pts (or reservations made with VC Pts). But, you can also break even on MFees or lose (last minute cancels, leaving you with VC Pts to get rid of or use). One must also remember, there is an upfront cost to the Vacation Club Pts, which plays into a true ROI on any rental...in addition to any taxes to be paid on the rental income itself. While I've never rented VC Pts, I have rented deeded weeks in situations where we could not use...for a slight profit. But, it does require a little bit of work/effort.

 

[catharsis]

[snip] It frustrates all point participants using points because while it adds to the pool of weeks that can be used for points, it also adds to the number of people going after the weeks using points. It is a net zero gain of weeks and points.

Just pointing out that this is true for EVERY single conversion of weeks to points, whether those points are rented or not is irrelevant (and would also add that when you add the 6% 'skim' it's actually a significant net benefit to the points program when weeks owners convert, with no downside regardless of how many points are rented.

 

[Retired2025 aka AlmostRetired]

Just pointing out that this is true for EVERY single conversion of weeks to points, whether those points are rented or not is irrelevant (and would also add that when you add the 6% 'skim' it's actually a significant net benefit to the points program when weeks owners convert, with no downside regardless of how many points are rented.

I agree, renting points is a great benefits to both parties in the renting process. T

The question being asked is if this is a profitable activity and I think absolutely for legacy owners and much more difficult for Trust owners. As far as your point on being irrelevant, I am not sure about that. One of the people I rented from had 15,000 points to rent. I rented 3000. for discussion sake, let's assume she rented to 5 people each renting 3000 points. You now have 5 people instead of 1 searching and waitlisting that you are competing against. Multiply this by how many people rent their points in a subset of total points and it can add a lot more people into the mix. Also, someone can rent incremental points to go after seasons and resorts that they might not have been normally able to do. It changes the dynamics of competition and make no mistake about it, getting what you want is a competition. This all being said I can't quantify how much it changes things but it is greater than irrelevant.

 

[vol_90]

I agree, renting points is a great benefits to both parties in the renting process. T

The question being asked is if this is a profitable activity and I think absolutely for legacy owners and much more difficult for Trust owners. As far as your point on being irrelevant, I am not sure about that. One of the people I rented from had 15,000 points to rent. I rented 3000. for discussion sake, let's assume she rented to 5 people each renting 3000 points. You now have 5 people instead of 1 searching and waitlisting that you are competing against. Multiply this by how many people rent their points in a subset of total points and it can add a lot more people into the mix. Also, someone can rent incremental points to go after seasons and resorts that they might not have been normally able to do. It changes the dynamics of competition and make no mistake about it, getting what you want is a competition. This all being said I can't quantify how much it changes things but it is greater than irrelevant.

Instead of competing against what the owner of the points would have booked if used you are competing against what the individuals renting the points are booking. I don't see much difference as 15,000 points would likely be used for multiple reservations / properties in both situations.

 

[curitiba_tapley]

What I can't figure out in the rental thesis, is how do I account for the $48,000 up front cost so I can buy 3,000 more points. I will never recoup that. So what's the attraction of renting points to cover annual fees when the purchase itself is worth almost zero 10 seconds after the contract is signed?

I agree 100%, making up the "$48,000" up front cost makes the idea of making rentals a "profitable side hustle" a bust. From a retail sale there are at least two ways to think about the question posed above. First, purchases should always be done with the expectation of travel for yourself and family. In the years with lots of vacation travel, there is no MF recovery vs. years when not all points are used by you, the owner, and therefore the points can be rented out to recover some MF. The second is what is preached here at TUG - always buy resale. At least in this second approach, there is a little faster payback on the upfront costs.

 

[StaceyM]

I agree we are getting mixed messages from MVC sales. During a presentation in November, when we told them we were likely to retire the following year, there was a push to buy more points so we could rent them out to cover our MF. I have rented our Aruba week (when we have other plans) and have done ok. I do not recall the rent and off-set pitch at all when we first became owners, seems to be a more recent development.

Going down an entirely different rabbit hole, I've been reading through the Trust docs (from @StevenTing dropbox link in another thread), and found this:

My reading (given that I'm not a lawyer and still trying to figure out what all the terms mean , and don't know if this document has been modified or amended since 2010) is that it explicitly grants the right to lease any Use Periods related to your Trust Points, as long as the lease is less than 3 years and you submit a copy of the lease or rental agreement to the Association.

 

[Retired2025 aka AlmostRetired]

Instead of competing against what the owner of the points would have booked if used you are competing against what the individuals renting the points are booking. I don't see much difference as 15,000 points would likely be used for multiple reservations / properties in both situations.

You might be correct. I am only guessing that a person not sure what to do with the 15000 points would be less competitive in searching frequency and breathe of searches than than 5 people who rent points with specific reasons in mind. Personally I would rather compete with someone who is not focused than 5 people who are. No matter if you are correct or I am, back on point to question asked. Many Legacy owners can make a nice profit by renting points if they wanted. Trust owners have a difficult time doing the same.