Will a Rental Crackdown Reset DVC Resale Prices?

[HyperspaceMountainPilot]

Assuming Disney follows through with cracking down on major commercial renters, I would expect thousands of resale points to flow on to the market. How much do people think shutting down the major rental companies will cause prices to decline?

 

[@dvcdudes]

I think it would be a real shame if the rental market tanked completely. For me, it's one of the brilliant flexibilities that makes DVC stand-out against a typical timeshare.

 

[T00dles]

Only CFW has the more strict contract language. I don't expect a "cracking down".

 

[AwfulWaffle]

I am good either way since it should create more availability at the 7 month mark

 

[Dyefrog]

Could you walk me through how restricting for profit commercial rental owners affects the resale pricing. Is the theory that rental pricing will tank if only personal use contracts are allowed to rent or vice-versa?

I personally would welcome the shutdown of professional rental companies. I'm not referring to brokers like Davids and this board's sponsor, but companies that scalp prime, hard to get reservations. I bought BWV because the 7 month window is next to impossible to get, especially December. It's frustrating that I will have to walk a reservation even for the 11 month window which I blame on what I believe are large scale rental mills playing the system purely for profit. I don't begrudge the actual owners that bought with the intent of staying at DVC trying to rent unused points yet locked to a reservation, or trying to salvage an existing reservation that circumstances have derailed. But like anything, if there's a buck to be made, people will find a way and unless Disney puts their foot down, they will continue to do it.

 

[tom1944]

It depends on how many points are used mainly as rental points.

 

[dvc lover 1970]

Interesting...but what I see is the value in renting is dissappearing as prices per point rise and disney offers really good cash incentives.

 

[Matty B13]

Could you walk me through how restricting for profit commercial rental owners affects the resale pricing. Is the theory that rental pricing will tank if only personal use contracts are allowed to rent or vice-versa?

The "Theory" is that there are some big companies out there that own a lot of DVC points and rent them out, thus if they get shut down they will have to sell those points on the resale market causing a flood of new resale contract on the market driving prices down. Many of the same companies also are brokers for resale contracts.

 

[Nikkimouse44]

The "Theory" is that there are some big companies out there that own a lot of DVC points and rent them out, thus if they get shut down they will have to sell those points on the resale market causing a flood of new resale contract on the market driving prices down. Many of the same companies also are brokers for resale contracts.

Would we think Disney would make them sell, or would Disney just assume the points (aka exercise their ROFR)?

 

[Matty B13]

Would we think Disney would make them sell, or would Disney just assume the points (aka exercise their ROFR)?

Can't make THEM sell, but could start canceling reservations, and then they would be paying dues and not having any income coming in on these points causing loses for the company.

 

[AwfulWaffle]

But you are still talking about the minority of points. I don’t data analytics to say how much statistically are reservations for non members but I have to assume it’s a small 10-15% so if those sell then so be it. The rest of the owners that just bought a timeshare at Disney will have better chances at booking at 11 months and will be less frustrated when they can’t and should in theory reduce the overall numbers of owners selling due to lack of availability. Like others have mentioned it’s new language in future contracts so it will likely be a wash because renters simply won’t purchase those contracts, direct or resale.

 

[Matty B13]

But you are still talking about the minority of points. I don’t data analytics to say how much statistically are reservations for non members but I have to assume it’s a small 10-15% so if those sell then so be it. The rest of the owners that just bought a timeshare at Disney will have better chances at booking at 11 months and will be less frustrated when they can’t and should in theory reduce the overall numbers of owners selling due to lack of availability. Like others have mentioned it’s new language in future contracts so it will likely be a wash because renters simply won’t purchase those contracts, direct or resale.

But it could be enforced on existing contracts because of the "no commercial use" language on all contracts to date.

 

[AstroBlasters]

There are many times I got an offer on a contract rejected because “the seller states they are perfectly fine to continue renting the points every year and won’t sell below x price”. Those sellers would be forced to accept a lower price….. I’m looking at you Subsidized Aulani sellers….

 

[Matty B13]

Imagine if DVC to cut back on confirmed reservations and walking dates by DVC completely stops allowing the modification of names and dates on ALL RESERVATIONS!!! You would have to rebook every time you wanted a change.

 

[JackosinDIS]

There are many times I got an offer on a contract rejected because “the seller states they are perfectly fine to continue renting the points every year and won’t sell below x price”. Those sellers would be forced to accept a lower price….. I’m looking at you Subsidized Aulani sellers….

Exactly

 

[CWTC]

Imagine if DVC to cut back on confirmed reservations and walking dates by DVC completely stops allowing the modification of names and dates on ALL RESERVATIONS!!! You would have to rebook every time you wanted a change.

This would be problematic I think for the majority of owners - not every modification is due to walking. We might book 8 nights at month 11 and decide at month 10 to add a night. Someone else might have a flight or work schedule change necessitating a few days shift. I think everyone needs to be careful what they wish for - would disallowing any modifications fix walking? Yup. Would disallowing any modifications significantly alter flexibility for members? Yup.

 

[Genie+]

We avoided buying the big 3 SSR/AKV/OKW partly due to the risk of stricter enforcement eventually. I didn’t like the idea of that window overlapping with our timing to exit, and the impact on salvage value being greater. That coupled with ‘buy where you wouldn’t mind staying most of the time’ pushed us toward other resorts.

The size concerned me they’d be the most sensitive to supply/demand disruption around rental enforcement.

 

[Nikkimouse44]

We avoided buying the big 3 SSR/AKV/OKW partly due to the risk of stricter enforcement eventually. I didn’t like the idea of that window overlapping with our timing to exit, and the impact on salvage value being greater. That coupled with ‘buy where you wouldn’t mind staying most of the time’ pushed us toward other resorts.

The size concerned me they’d be the most sensitive to supply/demand disruption around rental enforcement.

We just purchased at SSR - can you explain what you mean by “stricter enforcement” and window overlapping?

 

[Genie+]

We just purchased at SSR - can you explain what you mean by “stricter enforcement” and window overlapping?

We are older so at some point it is likely we exit DVC before contract expiration, and that window coinciding with a drop in resale values over stricter rental enforcement. I liked my chances better elsewhere. It’s only because we do plan to exit that it matters to us.

 

[@dvcdudes]

We are older so at some point it is likely we exit DVC before contract expiration, and that window coinciding with a drop in resale values over stricter rental enforcement. I liked my chances better elsewhere. It’s only because we do plan to exit that it matters to us.

Interesting, so you always thought there would be stricter rental enforcement?