Considering Options

[krolyat]

We have talked about buying in to the DVC option since my first visit to Disney in 2008 but decided that we were way to young (21/23) to buy in to something like that. Since then we have been to Disney 6 times and have stayed on property 4 out of the 6)

But now we are back considering the options and have a ton of questions. We would like to have our home resort of the Boardwalk Villa's because of it's proximity and our love of Epcot. We tend to travel in Jan, Feb, July, Sept and would love to do a Disney Christmas at some point down the road.

1. Is there a set cost per point and is it negotiable?
2. Is there a minimum number of points that must be bought (100 points should be more than enough until the add-on bug bites us)
3. If we determine that we don't have enough points for a visit are we able to combine rented points.
4. Most and foremost -How do I calculate maintenance fees? I see that there is a sticky on fees but do I take the current rate for the property and times it by how many points that I would own?
5. Is everyone able to bank points or is this an option that you have to build in to your initial purchase.
6. Is the total due upfront or is it over a period of time like a mortgage.

Thank you all for any help you can offer.

 

[chalee94]

But now we are back considering the options and have a ton of questions. We would like to have our home resort of the Boardwalk Villa's because of it's proximity and our love of Epcot. We tend to travel in Jan, Feb, July, Sept and would love to do a Disney Christmas at some point down the road.

A June UY might be your best bet. But no UY covers every month of the year.

Is there a set cost per point and is it negotiable?

Direct - the cost is fixed and nonnegotiable

Resale - the cost varies by size of contract, whether the contract is loaded with points or stripped, and the relative desperation of the seller. Cost is definitely negotiable, and usually much lower than direct prices. (You do lose a few low-value trading options if you buy resale, though.)

Also, be aware that BWV contracts expire in 2042 whether you buy direct or resale.

Is there a minimum number of points that must be bought (100 points should be more than enough until the add-on bug bites us)

Direct - sometimes a minimum of 160 pts sometimes less.

Resale - no minimum

If we determine that we don't have enough points for a visit are we able to combine rented points.

If you dont have enough pts, you can get up to 24 additional pts from Disney directly for $15 per pt at the 7 month window.

You can also try to find a transfer from a BWV owner - their pts are valid for booking BWV at 11 months out (which can be VERY important at some times of the year and for booking standard view villas).

If you rent a reservation from another DVC owner, you are treated like any other renter. You cannot control that reservation in any way. You can try to have MS link the reservation but you'd still have to check out and back in - kind of a hassle.

You can also try to book a cash room through MS. (But its expensive.)

Most and foremost -How do I calculate maintenance fees? I see that there is a sticky on fees but do I take the current rate for the property and times it by how many points that I would own?

If you own 100 pts and your annual dues rate is $5.00 per pt, then you pay $500 per year in dues. Easy.

Is everyone able to bank points or is this an option that you have to build in to your initial purchase.

Everyone can bank and borrow pts. Banking and borrowing transactions are final and cannot be undone once you do it. You can only bank/borrow to move pts up or back one UY...then they will expire if not used by the end of that new UY.

Is the total due upfront or is it over a period of time like a mortgage.

Direct - Disney will finance it for you for up to 10 years (the rate is over 10%, though).

Resale - you are usually on your own to find financing.

Its a luxury purchase and its guaranteed to go to $0 in value eventually&Its up to you but financing DVC is generally a bad idea.

 

[NoleFan]

MF for BWV is $5.84/pp

We just returned from our first stay there this weekend & LOVED it !!! It is also one of our home resorts as we are new DVC owners. Good luck !!! The smaller contracts (100 points or less) are harder to find with high demand right now so take that into consideration with your offer.

 

[krolyat]

A June UY might be your best bet. But no UY covers every month of the year....

Thank you Chalee94 for your very detailed response!

MF for BWV is $5.84/pp

We just returned from our first stay there this weekend & LOVED it !!! It is also one of our home resorts as we are new DVC owners. Good luck !!! The smaller contracts (100 points or less) are harder to find with high demand right now so take that into consideration with your offer.

Thanks for the update on the MF. I'm happy that it's easy to figure out and not a long complicated equation.

 

[papamouse1]

...
3. If we determine that we don't have enough points for a visit are we able to combine rented points...

chalee94 did such an amazing job on the questions, there is only one thing I would ad with this particular question you asked. When you rent points from someone, it is true that if they book it, you are stuck. You do have one more option. If you can someone who is renting their points "transfer" points to your account, then the points belong to you for that 1 year and you can make the reservation yourself. The trick is finding someone willing to transfer since you are only allowed 1 transfer per calendar year... but I have seen some on the Buy/Rent boards who have done transfers to people before.

 

[drusba]

Just adding to the above.

For someone in their 20s you need to consider whether Boardwalk is the ideal place to buy because of its end date. It expires January 31, 2042. That means come that date, when you are in your 50s and still wanting to go annually, you will have nothing left. (The same issue exists for Beach Club Villas, Villas at Wilderness Lodge, some Old Key West contracts, and the two older off-site resorts, Vero Beach and Hilton Head). The end date for Saratoga Springs is 2054, Animal Kingdom Lodge 2057, Bay Lake Tower 2060, and the not yet open Villas at the Grand Floridian 2064. Nevertheless, if what you want is either Boardwalk standard view or boardwalk view, you will need to own at BWV to assure getting those. BWV pool/garden view is easy to get at 7 months out (your window if you own at another resort) from mid- Jan to the end Sep. Rest of year is hit or miss and Christmas week or first tewo weeks of Dec is real difficult.

Disney is currently selling Boardwalk and other already opened WDW DVC resorts to new purchasers at a minimum purchase of 100 points. All the already opened WDW resorts other than BLT and AKV are $130 a point, BLT is $165 and AKV $145 (you can get some price incentives at AKV that varies with total points purchased, but it is still high).

Resale prices vary but are generally 40% or more off the Disney prices. Result: you can buy 160 points or more resale for the price of buying 100 from Disney.

Then for some historical information including the history of annual maintenance fees for each resort go to the top of the thread page on which your post appears with others and click on "Sticky: DVC Resource Center"

 

[krolyat]

chalee94 did such an amazing job on the questions, there is only one thing I would ad with this particular question you asked. When you rent points from someone, it is true that if they book it, you are stuck. You do have one more option. If you can someone who is renting their points "transfer" points to your account, then the points belong to you for that 1 year and you can make the reservation yourself. The trick is finding someone willing to transfer since you are only allowed 1 transfer per calendar year... but I have seen some on the Buy/Rent boards who have done transfers to people before.

Thanks I'll keep that in mind.

Just adding to the above.

For someone in their 20s you need to consider whether Boardwalk is the ideal place to buy because of its end date. It expires January 31, 2042. That means come that date, when you are in your 50s and still wanting to go annually, you will have nothing left. (The same issue exists for Beach Club Villas, Villas at Wilderness Lodge, some Old Key West contracts, and the two older off-site resorts, Vero Beach and Hilton Head). The end date for Saratoga Springs is 2054, Animal Kingdom Lodge 2057, Bay Lake Tower 2060, and the not yet open Villas at the Grand Floridian 2064. Nevertheless, if what you want is either Boardwalk standard view or boardwalk view, you will need to own at BWV to assure getting those. BWV pool/garden view is easy to get at 7 months out (your window if you own at another resort) from mid- Jan to the end Sep. Rest of year is hit or miss and Christmas week or first tewo weeks of Dec is real difficult.

Disney is currently selling Boardwalk and other already opened WDW DVC resorts to new purchasers at a minimum purchase of 100 points. All the already opened WDW resorts other than BLT and AKV are $130 a point, BLT is $165 and AKV $145 (you can get some price incentives at AKV that varies with total points purchased, but it is still high).

Resale prices vary but are generally 40% or more off the Disney prices. Result: you can buy 160 points or more resale for the price of buying 100 from Disney.

Then for some historical information including the history of annual maintenance fees for each resort go to the top of the thread page on which your post appears with others and click on "Sticky: DVC Resource Center"

Drusba you have a very good point with the end dates that I completely overlooked. We would be completely fine with a pool/garden view so it would be acceptable to have another resort as my home and book BWV as needed.

 

[JimMIA]

Direct - Disney will finance it for you for up to 10 years (the rate is over 10%, though).

I don't have the current rates, but they are WAY over 10% -- VERY high interest, especially for a mortgage.
*****

The other issue with financing direct from Disney is that you will start out almost impossibly underwater on your loan. You will be starting out with a large loan on a timeshare interest that is probably worth little more than HALF of what you owe.

The importance of that is if something unexpected happens and you find yourself forced to sell your DVC, you will have to PAY IN a large amount to close just to get out.

Let's say you buy 100 points direct at $130 = $13,000. You pay 10% down ($1,300) and finance $11,700.

A couple of years later, you have a financial setback and need to get out from under the payments for the DVC mortgage and MFs. You sell...but you can only get $65 per point ($6,500) on the resale market (that may be an optimistic guess, BTW). You pay a 10% commission ($650), so your gross proceeds are $5,850. You haven't paid the mortgage down much in the first two years and you owe $10,000. $10,000 - $5,850 = $4,150.

You have to pay IN $4,150 to get out of DVC.

 

[JimMIA]

We have talked about buying in to the DVC option since my first visit to Disney in 2008 but decided that we were way to young (21/23) to buy in to something like that. Since then we have been to Disney 6 times and have stayed on property 4 out of the 6)

I'd like to come back to this initial part of your OP.

You've made just a little more than one trip per year since 2008 -- onsite 4 times, offsite twice.

Where did you stay offsite? In offsite hotels? Or in timeshares, vacation homes, etc?

Where did you stay ONsite? Values? Mods? Deluxes?

Obviously there are advantages to onsite for many people, but is onsite a deal-breaker?

Or could you be satisfied staying offsite for a fraction (maybe a tiny fraction) of the cost?

Could you be satisfied staying offsite in a very nice timeshare that cost you only $2,000 total to buy and less than DVC in annual MFs?

Could you be satisfied renting an offsite timeshare, getting a nice 2 BR reliably for less than $1,000 for an entire week -- with no initial outlay, and no ongoing financial obligation?

Remember that we are talking only about the lodging portion of your vacation cost anyway...and there are many, many options for lodging. DVC is only one option.

 

[krolyat]

I don't have the current rates, but they are WAY over 10% -- VERY high interest, especially for a mortgage.
*****

The other issue with financing direct from Disney is that you will start out almost impossibly underwater on your loan. You will be starting out with a large loan on a timeshare interest that is probably worth little more than HALF of what you owe.

The importance of that is if something unexpected happens and you find yourself forced to sell your DVC, you will have to PAY IN a large amount to close just to get out.

Let's say you buy 100 points direct at $130 = $13,000. You pay 10% down ($1,300) and finance $11,700.

A couple of years later, you have a financial setback and need to get out from under the payments for the DVC mortgage and MFs. You sell...but you can only get $65 per point ($6,500) on the resale market (that may be an optimistic guess, BTW). You pay a 10% commission ($650), so your gross proceeds are $5,850. You haven't paid the mortgage down much in the first two years and you owe $10,000. $10,000 - $5,850 = $4,150.

You have to pay IN $4,150 to get out of DVC.

Is the $65 the maximum amount that you can resell the timeshare for?

 

[BestDadEver]

2. Is there a minimum number of points that must be bought (100 points should be more than enough until the add-on bug bites us)

I am almost positive they made initial buy in for direct 50 points or more . I bought in a year ago . I only bought 100 so it was at least that .

6. Is the total due upfront or is it over a period of time like a mortgage.

When you buy direct and finance my rate is 10.9.% if I had bad credit it would be way higher around 15% . The rate may have went up but it was 10.9% when I bought . The credit is through Disney and does not show up on your credit report .

I don't think financing is bad idea if you plan to pay it off early . Think about it if you had bought DVC when you originally thought about it , and used the money you would have spent on rooms for those trips put towards your DVC you would have likely paid it off already , and bought in at a much lower price per point . You could look up what the price was 5-6 years ago . IDK what the price was exactly but I know it was under $100 .

 

[krolyat]

I'd like to come back to this initial part of your OP.

You've made just a little more than one trip per year since 2008 -- onsite 4 times, offsite twice.

Where did you stay offsite? In offsite hotels? Or in timeshares, vacation homes, etc?


In 2008 we stayed in a hotel aprox 15 minutes from Disney
The other times that we were offsite we were in timeshares (family owned)


Where did you stay ONsite? Values? Mods? Deluxes?


Saratoga Springs and Coronado Springs


Obviously there are advantages to onsite for many people, but is onsite a deal-breaker?

Or could you be satisfied staying offsite for a fraction (maybe a tiny fraction) of the cost?


We love having the ability to have the cost of transportation to and from the airport as well as around property rolled in to the vacation cost.


Could you be satisfied staying offsite in a very nice timeshare that cost you only $2,000 total to buy and less than DVC in annual MFs?


I would have to look in to their cost a bit more as the MF for our families timeshare is over $500 as well


Could you be satisfied renting an offsite timeshare, getting a nice 2 BR reliably for less than $1,000 for an entire week -- with no initial outlay, and no ongoing financial obligation?


Yes, but then we are back to transportation issues

Remember that we are talking only about the lodging portion of your vacation cost anyway...and there are many, many options for lodging. DVC is only one option.

.

 

[Breyean]

Is the $65 the maximum amount that you can resell the timeshare for?

No, but he's using current resale pricing to try to estimate what you might expect if you had to sell in the near future.

You can ASK for anything if you have to list for sale with a broker, and if you look at listings for say, BLT, you'll see people asking in the mid $100s (like $150!) while some others are priced in the $90s. And BLT contracts are still passing ROFR in the high $90s.

Those higher listings are usually from sellers who are in the exact position Jim is outlining - they need to pay off a loan and are listing at a price that will not make them have to pay out of pocket if they sold at that price.

Please take Jim's comments about financing to heart - he really knows what he's talking about and is well respected here on the boards.

Some other posters post things w/o really having the knowledge base to offer an informed opinion yet they will still try to help.

 

[JimMIA]

Is the $65 the maximum amount that you can resell the timeshare for?

No, no...just a guess. BWV resales are currently selling for a little more than than, I believe, but I'm just trying to give you a model to frame the discussion.

 

[krolyat]

No, no...just a guess. BWV resales are currently selling for a little more than than, I believe, but I'm just trying to give you a model to frame the discussion.

Thanks JimMIA, your financial model is very helpful.

 

[JimMIA]

Obviously there are advantages to onsite for many people, but is onsite a deal-breaker?

Or could you be satisfied staying offsite for a fraction (maybe a tiny fraction) of the cost?

We love having the ability to have the cost of transportation to and from the airport as well as around property rolled in to the vacation cost.

Yep. And the theming is better at most Disney resorts. To be honest, we don't notice that much, but to some families it's a big deal.

Could you be satisfied staying offsite in a very nice timeshare that cost you only $2,000 total to buy and less than DVC in annual MFs?

I would have to look in to their cost a bit more as the MF for our families timeshare is over $500 as well

BWV dues on 100 points for 2013 would be $584...not $500. And that's roughly $5,000-$11,000 MORE initially (depending on whether you buy in direct or resale) plus $584 this year.

Could you be satisfied renting an offsite timeshare, getting a nice 2 BR reliably for less than $1,000 for an entire week -- with no initial outlay, and no ongoing financial obligation?

Yes, but then we are back to transportation issues

Right. It's all about tradeoffs. IF you would be satisfied renting (and it's a big IF for some people), you would be saving money -- AND you'd have no ongoing financial obligation.

Is that savings worth the cost of a) paying for shuttle service, or b) renting a car and paying for parking? Only you can answer that one.

 

[JimMIA]

Please take Jim's comments about financing to heart -

Thanks for the kind words, Brian -- but the truth is, I'm not smart enough to know whether financing is good for a particular family or not.

That's their decision, and none of us here know their family's financial situation.

But OP is "Considering Options." I think we owe it to them to present various options. And one of the options everyone should have with a timeshare purchase is an exit strategy. Financing obviously raises the costs of purchasing, and if something goes wrong, could make the buyer's exit strategy impossible.

I'm not arguing against financing (although it would be a poor decision for my family). I'm pointing out that there are other considerations beyond whether the family can currently afford the monthly payment.

 

[JimMIA]

I don't think financing is bad idea if you plan to pay it off early .

It could be a horrible idea if you don't actually pay it off early.

A lot of people "plan" to pay loans off early, but many of them don't. In a lot of cases, it's just a little fairy tale they tell themselves to justify buying something they can't really afford. IMHO, that is a bad idea.

 

[Dean]

I don't think financing is bad idea if you plan to pay it off early . Think about it if you had bought DVC when you originally thought about it , and used the money you would have spent on rooms for those trips put towards your DVC you would have likely paid it off already , and bought in at a much lower price per point . You could look up what the price was 5-6 years ago . IDK what the price was exactly but I know it was under $100 .

Almost everyone plans to pay it off early, most don't. IMO, if you have to ask how much the payments are, you really can't afford it. Financing such a luxury purchase is the height of insanity, IMO. I know there are some very specific exceptions but they are definitely the exception. Had the OP bought in 2008 and financed, they certainly would have spent more on the vacations than they did actually spend.

 

[krolyat]

Almost everyone plans to pay it off early, most don't. IMO, if you have to ask how much the payments are, you really can't afford it. Financing such a luxury purchase is the height of insanity, IMO. I know there are some very specific exceptions but they are definitely the exception. Had the OP bought in 2008 and financed, they certainly would have spent more on the vacations than they did actually spend.

Dean - I'm not concerned with the payments I was interested in more information as to how the DVC points program works and how I can factor the information that members have suggested on this thread in to helping us make a better decision prior to sitting down with a CM.

However if we had bought in 2008 we would have spent more time at Disney in the past few years as opposed to going on cruises and spending a large portion of the total DVC cost.