Which point system is most profitable for rentals?

[grupp]

Currently, DVC points are easy to rent through one the DVC points rental service. I use DVC Rental Store, which is paying $11.75 or more for some resorts. Takes about 2 hours of my time per year to rent out my 1100 points.

The bad news is at current resale prices, tough to purchase a contract at a price where rentals make sense. There were some great deals that would occasionally get through ROFR 2 or 3 years ago. Still kicking myself for passing up some good deals over a dollar or two per point.

 

[ronparise]

QWhen I started this rental thing I did the same thing the op is doing ie I was looking for free advice. I asked where the best rentals were and a million other questions and the answer I got was don't do it. It's too hard and too risky and even the folks that do it successfully don't make any real money

I did it anyway but I started small and had a modest goal. First it was to make enough that my own vacations were free. That worked so I set a new goal of $2000 a month profit over mf. I didn't have to consider purchase price because Wyndham points were at the time, free and I reached my goal quickly

and because my purchase price was so low, I went nuts. Every purchase was made with money from my rentals so I never spent any "real money" to do it At one point I bought two small contracts from Wyndham ($12000 cash) to make two platinum accounts. But that was done with rental income too

Besides the low cost of entry, here's what made it work. "Leverage"

When I got a new contract I put all the points (3 years worth) into the credit pool. So in the first year owning a contract I made and rented 3 years worth of reservations for one years MF

You can do the same thing today but it's gonna cost more to get started Points cost a penny each now

I don't know how other timeshare systems work except Worldmark and you can do the same 3:1 thing there too.


As far as I know Wyndham is the only system where you can get half price reservations

So 1)low cost of entry 2) reasonable mf 3) 3:1 leverage in the first year 4) 50% discounts. 5) lots of resorts in good locations
All these conspire to make Wyndham a winner in my book


Good luck

 

[Beefnot]

Which is better?
1. Specialize in the point system, or
2. Specialize in the location.

You can do both.

 

[geekette]

Denise,

I don't think my question is about helping the competition. It is about telling everyone that your point system is great. In my case, it is saying that Wyndham is pretty good (to use and to rent). So demand would increase, which would make my ownership more valuable.

I guess my real question is: are the other systems even better? This is hypothetical as I don't have any more time to deeply explore other options now. And it isn't as if I could easily divest and start again with another system.

It is like living in neighborhood X vs Y. You tell people to live in your neighborhood because it is better than the other one.

I don't think renters care. Most I've worked with don't care about brand, they just want to be in a certain location at a certain time and sleep a certain amount of people and don't care whose name is on the kiosk, they just want a fair price. Onsite amenities may or may not sway it, but that remains independent from brand. I've stayed in independents, also, and find them just as wonderful as offerings from a mini-system. There is no Best because every traveller has their own definition, and for me, the parameters change for each trip.

I don't think that demand increases by a handful of renters having a great experience so promoting the brand is simply never part of things for me.

 

[ronparise]

You can do both.

I know I do. In fact I use Wyndham points to specialize in a certain place and time.

 

[suzannesimon]

I own in Weeks, not points. Like Ron, I started small just trying to rent the 2 weeks I owned when I wasn't using them. I disagree that brand doesn't matter. The hotel brands give renters a certain standard to expect. I have no problem staying in off-brands myself for $1500 rent and clearing $1500-$4500 on each of my brand names.

I study Redweek a lot before I buy. How much is the maintenance fee compared to the rent for given weeks? Once I own a week, I make the effort to be on the computer reserving that high-value week the first second it opens for reservations. With Starwood, that means staying up until midnight. High maintenance fees ($3,000+) usually mean lower purchase prices, but I don't shy away if I can clear $2,000 after fees. Watch out for overbuilt areas - Orlando, for instance. Buy something special: a 3 bedroom or a fixed holiday week. Sometimes Gold can be better than Platinum if kids are out of school. Just my 2 cents for what it's worth.

 

[ronparise]

My best money makers are my floating weeks but if Suzanne is Neiman Marcus I'm Walmart She goes for the high priced high rent stuff I'm a low cost low rent kind of guy.

Reminds me of something my father used to say. "Everything works if you do"

 

[suzannesimon]

My best money makers are my floating weeks but if Suzanne is Neiman Marcus I'm Walmart She goes for the high priced high rent stuff I'm a low cost low rent kind of guy.

Reminds me of something my father used to say. "Everything works if you do"

Wyndham is a fine recognizable name as well. My timeshares didn't cost that much, except my 2 developer purchases. I probably will not live long enough to recoup that money!

 

[raygo123]

Curious as to how you rid yourself of all the fees once u want to hang it up? Sell to another renter

Sent from my Nexus 7 using Tapatalk

 

[suzannesimon]

Curious as to how you rid yourself of all the fees once u want to hang it up? Sell to another renter

Sent from my Nexus 7 using Tapatalk

I might want to dump them on the resale market at some point. That's how I got most of them. My sons think I'm nuts, but my daughter is doing the same thing. Their deal is once I'm gone (literally), she gets to handle the timeshares and keep 50% of the profit. I just want to have a little traveling money when I retire next year. I bought the first two just for family vacations.

 

[ronparise]

Curious as to how you rid yourself of all the fees once u want to hang it up? Sell to another renter

Sent from my Nexus 7 using Tapatalk

The recent up tick in Wyndham prices has made it possible to sell this stuff easily, either to Wyndham or on ebay.

 

[Bigrob]

I agree with what others have posted... I would add that really understanding how a system works is important to get the most value out of it. Depending upon the system, it can take quite some time to get the most out of it.

Wyndham offers the VIP discount that you are aware of; Worldmark offers greater flexibility in making reservations, renting points, bonus time, etc. so a smallish account or accounts (depending upon how you want to work it) can be leveraged. The third leg of the stool - Shell - I think would be more challenging to work profitably due to the high maintenance fees (although there are some nice resorts in great locations).

I know there are folks who do well renting Marriott, DVC, and Starwood. In those cases, they may have lower volumes but higher margins due to the high demand. But to the point - the reason you aren't getting a lot of response is that those who are successful may not want to invite competition. If they are successfully renting for profit, they are not looking at exit strategies and trying to encourage others into their system to drive up resale prices, because they aren't planning on selling.

I do think you need to offer a higher level of service, and the things you mention as not being part of "renting the room" are absolutely part of what you need to be selling - i.e., the renter can get the unit from anyone, so why should they get it from you? Because you can tell them to go to restaurant XYZ if they like sushi, and if they have a 10-year-old son, they should go to Amusement Park ABC that has a cool new ride and is just 2.5 miles away, etc. You can choose to act like a commodity and be treated like one - or you can make a connection with your clients and get repeat business that you don't have to keep paying the platform providers for, if you use PPB. Does it take more time? Perhaps at the front end, but if you end up with "customers for life" I argue it saves you time because you can focus your efforts in future years on known "buyers" rather than "lookers". It is for that reason that most who are successful focus on a specific area so that they can provide that higher level of differentiated service.

 

[DeniseM]

I do think you need to offer a higher level of service, and the things you mention as not being part of "renting the room" are absolutely part of what you need to be selling - i.e., the renter can get the unit from anyone, so why should they get it from you? Because you can tell them to go to restaurant XYZ if they like sushi, and if they have a 10-year-old son, they should go to Amusement Park ABC that has a cool new ride and is just 2.5 miles away, etc. You can choose to act like a commodity and be treated like one - or you can make a connection with your clients and get repeat business that you don't have to keep paying the platform providers for, if you use PPB. Does it take more time? Perhaps at the front end, but if you end up with "customers for life" I argue it saves you time because you can focus your efforts in future years on known "buyers" rather than "lookers". It is for that reason that most who are successful focus on a specific area so that they can provide that higher level of differentiated service.

You nailed it!

 

[icydog]

Before 2008

Before 2008 I had a highly successful rental business for my Disney Vacation Club properties especially Disney's Beach Club Villas.. Then the market fell apart and fewer rentals. Then RCI became the exchange company for DVC and I quit my business. Now that Disney is only allowing one bedroom exchanges on RCI, and most of them Disney's Saratoga Springs Resort, I may be able to start my business again. And yes, renting out Disney Properties can be very lucrative. I think everyone who owns Disney Vacation Club knows that, or they should!

 

[serendip7]

definitely profitable

I own at the Westin Kaanapali Ocean Resort Villas and my rentals always exceed my maintenance fees.

I make sure I always reserve the spring break week though so finding a renter is fairly easy. The rent for a 2BR LO is about $3500 and MF is around $2600. That gives a $900 profit on a TS that cost me $10k back in 2009. 9% return on investment is pretty good these days.

Denise charges 12% or $420 to do all the advertising and renter hand holding so it's more like a 5% profit if I don't want to deal with renters myself... its still better then leaving the money in the bank.

 

[ronparise]

I own at the Westin Kaanapali Ocean Resort Villas and my rentals always exceed my maintenance fees.

I make sure I always reserve the spring break week though so finding a renter is fairly easy. The rent for a 2BR LO is about $3500 and MF is around $2600. That gives a $900 profit on a TS that cost me $10k back in 2009. 9% return on investment is pretty good these days.

Denise charges 12% or $420 to do all the advertising and renter hand holding so it's more like a 5% profit if I don't want to deal with renters myself... its still better then leaving the money in the bank.

Ive tried to calculate the ROI on some of my stuff... its pretty much impossible

rent $2000: mf $1000; annual income $1000, purchase price $0

so 1000/0 = (breaks my calculator)

 

[Tradetimes]

I was thinking that we cannot rent week from a points reservation system..

 

[Ty1on]

I was thinking that we cannot rent week from a points reservation system..

If a resort is a "home" resort, you can rent it as I understand it. In Wyndham's case, that can mean a single resort if it's a UDI or FW Conversion, or any ARP resort under CWP.

 

[Ty1on]

Ive tried to calculate the ROI on some of my stuff... its pretty much impossible

rent $2000: mf $1000; annual income $1000, purchase price $0

so 1000/0 = (breaks my calculator)

Use Internal Rate of Return (IRR) and it will work for you.

Edit: Because you utilize VIP privileges, which you paid for, to multiply your resale points, you should really recalc ROI on your portfolio when you consider a new contract, not just the individual contract. You are increasing your benefit from the same initial buy-in, so that should be considered. The benefit of a new contract could be measured as total ROI with the contract less total ROI without the contract.

 

[ronparise]

Use Internal Rate of Return (IRR) and it will work for you.

Edit: Because you utilize VIP privileges, which you paid for, to multiply your resale points, you should really recalc ROI on your portfolio when you consider a new contract, not just the individual contract. You are increasing your benefit from the same initial buy-in, so that should be considered. The benefit of a new contract could be measured as total ROI with the contract less total ROI without the contract.

I dont calculate return on investment at all. Its meaningless to me. especially since I started this thing without any money. all my growth has come from rental income. My interest is cash flow.. How much over and above annual expenses do I make in a year.

 

[bnoble]

If a resort is a "home" resort, you can rent it as I understand it. In Wyndham's case, that can mean a single resort if it's a UDI or FW Conversion, or any ARP resort under CWP.

In Wyndham, you can rent any reservation you can reserve. You do not need to have home resort status there.

 

[tschwa2]

You can always rent what you own. If you are the member of a multi destination club then it depends on the rules of the club.

 

[Ty1on]

In Wyndham, you can rent any reservation you can reserve. You do not need to have home resort status there.

Thank you, I understand it that much better now.