I recently had a conversation over lunch with Shauna Zielinski, a licensed real estate associate with the Progressive Real Estate Agency who specializes in Disney Vacation Club resorts. The topic of conversation was the consistent high demand for Disney Vacation Club condo rentals and resales.
"Disney is one of the world's most recognizable brands." Stated Shauna. "As such, the Disney Vacation Club timeshare system is able to easily overcome the common negative stereotype of timeshare vacation ownership and therefore maintains consistent demand year after year!".
"The biggest change this year" she continued "is that as the economy has begun to improve more owners have decided to use their points themselves. This has lowered the rental supply and increased consumer demand, helping to push prices to more than double the timeshare owners maintenance fees and taxes. Timeshares should never be sold as a financial investment, but I do tell my resale buyers that Disney Vacation Club reservations (DVC) have consistently rented at a profit for years!"
Disney Vacation Club does restrict the commercial renting of its timeshare points program, but often this is misunderstood by owners. The restriction does not stop owners from renting their unused points to guests, as long as the primary intention of ownership and usage is for the DVC owner's personal usage and enjoyment. DVC members can either rent their points through a by-owner advertising venue such as http://myresortnetwork.com, or can use the services of a respected rental brokerage to ensure they have a safe and secure transaction.
Regardless of how the reservation is rented, both the DVC member and the tenant should always insist on an independent third party escrow company to hold the rental payment until after check in. Costs for rental escrow have continued to decrease as more competition has come into the industry including local timeshare closing companies such as PCS Title and even online services such as DepositGuard.
When I asked Shauna about rental pricing she gave the following advice:
"I normally recommend DVC owners set their asking price based on the actual points used for the reservation. $13. to $14. per DVC point is a reasonable expectation, and after a broker's rental commission of $2. per DVC point- the net rental proceeds to an owner is normally more than double the annual per point assessments at most resorts."
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Showing posts with label Rental Advice. Show all posts
Showing posts with label Rental Advice. Show all posts
A Basic Introduction to Disney Vacation Club Ownership.
Disney Vacation Development, Inc. markets and operates the Disney Vacation Club, which is a points-based vacation ownership and exchange system of timeshare resorts.
All DVC ownerships are a deeded interest in real estate, and each interest equates to a specific number of Disney Vacation Club points, which are awarded each year on the first day of the anniversary month . A percentage of ownerships at Disney's Aulani Resort are also being sold as a guaranteed fixed week and unit. For these fixed intervals at Aulani, the owner will have the right to use their deeded week and unit, or to exchange that usage week for the equivalent allotment of Disney Vacation Club points.
All Disney Vacation Club resorts have been established on either a ground lease, or as a term-for-years. This means that the timeshare ownerships have a specific expiration date, at which point the usage rights will revert back to Disney Vacation Development, Inc.
The Disney timeshare calendar year is divided by Disney into distinct season categories: Premier, Magic, Dream, Choice, and Adventure. The particular dates that fall within these seasons will vary depending on the resort, and some resort calendars will not include all five seasons. Some locations will have only four season designations. These DVC season designations should not be confused with other terminology used by external usage systems such as RCI to denote demand values. For example, RCI considers Beach Club Villas to be red season usage all year long because of the traditional high exchange demand for the property- regardless of
the calendar date or the specific Disney season in which a reservation will fall.
There are different ways to exchange your Home Resort for another resort stay. This includes internal exchange within Disney Vacation Club, internal exchange for non-DVC properties and services, external exchange, and private exchange and rentals.
Internal exchange for another DVC resort-. The easiest way is simply using your DVC points to make a reservation at another DVC resort. If you own multiple DVC contracts at different home resorts, your points may be combined as DVC Vacation Points for reservations made less than seven months in advance.
Internal exchange for a non-DVC resort - To do this, your Home Resort Vacation Points are converted to Reservation Points, which are then used to reserve accommodations at non-DVC Resorts, except for accommodations available through the affiliated exchange company, which at this time is RCI. This privilege does not transfer via resale, so the only way to get this perk is to purchase the timeshare interest directly from Disney Vacation Club at full developer price. Reservation Points cannot be banked, borrowed, transferred or used to reserve accommodations through RCI or another third-party exchange system. Nor can they be used to reserve accommodations at DVC Resorts. Reservation Points must be used to reserve a non-DVC resort through the Central Reservations System. These points will expire at the end of the Use Year in which they are converted.
External exchange- Owners may also use a third party exchange system such as RCI, or a smaller system such as SFX Resorts.
Private exchange or rentals- While commercial rental of Disney Vacation Club points is prohibited (in other words, you cannot buy a DVC ownership with the sole intention of renting for a profit), owners who purchased primarily for personal use can rent or swap their DVC vacations with other individuals.
A Disney Vacation Club Use Year is a 12-month period beginning on the first day of the anniversary month. Each unit in a DVC resort has a specific use year assigned to it. All ownership interests deeded from that unit will be assigned the same use year, which is shown on the purchase agreement and on the DVC Member Card. Because the Use Year is tied to the individual ownership interest, it cannot be changed unless the underlying deeded interest is also changed.
All DVC ownerships are a deeded interest in real estate, and each interest equates to a specific number of Disney Vacation Club points, which are awarded each year on the first day of the anniversary month . A percentage of ownerships at Disney's Aulani Resort are also being sold as a guaranteed fixed week and unit. For these fixed intervals at Aulani, the owner will have the right to use their deeded week and unit, or to exchange that usage week for the equivalent allotment of Disney Vacation Club points.
All Disney Vacation Club resorts have been established on either a ground lease, or as a term-for-years. This means that the timeshare ownerships have a specific expiration date, at which point the usage rights will revert back to Disney Vacation Development, Inc.
The Disney timeshare calendar year is divided by Disney into distinct season categories: Premier, Magic, Dream, Choice, and Adventure. The particular dates that fall within these seasons will vary depending on the resort, and some resort calendars will not include all five seasons. Some locations will have only four season designations. These DVC season designations should not be confused with other terminology used by external usage systems such as RCI to denote demand values. For example, RCI considers Beach Club Villas to be red season usage all year long because of the traditional high exchange demand for the property- regardless of
the calendar date or the specific Disney season in which a reservation will fall.
There are different ways to exchange your Home Resort for another resort stay. This includes internal exchange within Disney Vacation Club, internal exchange for non-DVC properties and services, external exchange, and private exchange and rentals.
Internal exchange for another DVC resort-. The easiest way is simply using your DVC points to make a reservation at another DVC resort. If you own multiple DVC contracts at different home resorts, your points may be combined as DVC Vacation Points for reservations made less than seven months in advance.
Internal exchange for a non-DVC resort - To do this, your Home Resort Vacation Points are converted to Reservation Points, which are then used to reserve accommodations at non-DVC Resorts, except for accommodations available through the affiliated exchange company, which at this time is RCI. This privilege does not transfer via resale, so the only way to get this perk is to purchase the timeshare interest directly from Disney Vacation Club at full developer price. Reservation Points cannot be banked, borrowed, transferred or used to reserve accommodations through RCI or another third-party exchange system. Nor can they be used to reserve accommodations at DVC Resorts. Reservation Points must be used to reserve a non-DVC resort through the Central Reservations System. These points will expire at the end of the Use Year in which they are converted.
External exchange- Owners may also use a third party exchange system such as RCI, or a smaller system such as SFX Resorts.
Private exchange or rentals- While commercial rental of Disney Vacation Club points is prohibited (in other words, you cannot buy a DVC ownership with the sole intention of renting for a profit), owners who purchased primarily for personal use can rent or swap their DVC vacations with other individuals.
A Disney Vacation Club Use Year is a 12-month period beginning on the first day of the anniversary month. Each unit in a DVC resort has a specific use year assigned to it. All ownership interests deeded from that unit will be assigned the same use year, which is shown on the purchase agreement and on the DVC Member Card. Because the Use Year is tied to the individual ownership interest, it cannot be changed unless the underlying deeded interest is also changed.
Simple Steps to Renting a Disney Vacation Club Timeshare
Renting a DVC villa from an owner can be a great way to save money on your next Disney vacation. The Disney Vacation Club rules and regulations prohibit the commercial renting of Disney Vacation Club points or villas by anyone other than Disney. Individual DVC owners, however, have the right to occasionally rent their unused DVC points to non-owners as long as the primary intention of their ownership is for personal use and enjoyment.
There are two primary ways to locate Disney reservations. Renters can either look for confirmed reservations that have already been booked, or can have a DVC points owner check for availability. The number of points needed will vary based on the dates, the resort, and the villa type requested. It is often very helpful for a renter to review a point chart matrix to understand how many DVC points will be required for the reservation. Rental rates often range from $10. to $13. per point, so it's important to know how many points your reservation will require.
The renter will then contract and pay for the rental directly with the timeshare owner. There are several third party escrow agents who can provide rental escrow services for a small fee if desired. Email me if you need a referral.
Disney will send the reservation confirmation directly to the owner, who must then forward it to the renter. The renter simply brings this with them at check in, and provides a credit card to the front desk for any incidental charges and as a damage deposit. Always be sure to provide the names and ages of all guest who will be staying in the villa, as each guest will get a personalized ID card for the duration of their stay. My children always create a photo album from the vacation and their ID cards are always front in center in the display!
There are two primary ways to locate Disney reservations. Renters can either look for confirmed reservations that have already been booked, or can have a DVC points owner check for availability. The number of points needed will vary based on the dates, the resort, and the villa type requested. It is often very helpful for a renter to review a point chart matrix to understand how many DVC points will be required for the reservation. Rental rates often range from $10. to $13. per point, so it's important to know how many points your reservation will require.
The renter will then contract and pay for the rental directly with the timeshare owner. There are several third party escrow agents who can provide rental escrow services for a small fee if desired. Email me if you need a referral.
Disney will send the reservation confirmation directly to the owner, who must then forward it to the renter. The renter simply brings this with them at check in, and provides a credit card to the front desk for any incidental charges and as a damage deposit. Always be sure to provide the names and ages of all guest who will be staying in the villa, as each guest will get a personalized ID card for the duration of their stay. My children always create a photo album from the vacation and their ID cards are always front in center in the display!
Why can last minute availability be so hard to find with timeshare point systems?
I'm always amazed at how many timeshare rental requests I receive that are looking for summer reservations less than 30 days in the future. While there are some success stories to share, unfortunately I have to report to the vast majority that I see no availabilty within that particular resort system and as a result, I often refer the renter directly to the resort. At least three or four times each year I'll get a return call from the client stating that they paid full rack rates for their vacation rental, and were amazed to discover the resort was half empty during their stay. Invariably, they will ask the question "Why was there no availability showing?".
There are a number of reasons why this can appear to be the case, but one aspect that many consumers don't realize is that most timeshare developers have a right to obtain non-reserved timeshare units for their own rental programs during the "breakage" period. The stated purpose for this right is so that the developer has the opportunity to monetize any unused reservations. However, many timeshare owners disagree, stating that this is simply a tactic developers use to increase their profit margins by taking inventory from the owner pool. The breakage period varies by developer, but it is not unusual for the breakage period to extend up to 60 days prior to check in.
What this means for timeshare renters is simple- and is the same basic advice that timeshare owners themselves have learned to follow: plan ahead and book your reservations far in advance of your travel dates! I know that information isn't usually covered in a developer tour presentation- but it can make a world of difference in the level of satisfaction you receive from your timeshare usage!
There are a number of reasons why this can appear to be the case, but one aspect that many consumers don't realize is that most timeshare developers have a right to obtain non-reserved timeshare units for their own rental programs during the "breakage" period. The stated purpose for this right is so that the developer has the opportunity to monetize any unused reservations. However, many timeshare owners disagree, stating that this is simply a tactic developers use to increase their profit margins by taking inventory from the owner pool. The breakage period varies by developer, but it is not unusual for the breakage period to extend up to 60 days prior to check in.
What this means for timeshare renters is simple- and is the same basic advice that timeshare owners themselves have learned to follow: plan ahead and book your reservations far in advance of your travel dates! I know that information isn't usually covered in a developer tour presentation- but it can make a world of difference in the level of satisfaction you receive from your timeshare usage!
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