DVC Contracts Retaining Value is quite Remarkable for a Timeshare

Drewski77 · Aug 30, 2015

I see many posts (I have written them also) wondering about the future value of DVC contracts. While this is interesting and important, I do think it is missing the bigger implication that a DVC contract retains such a high percentage of its value over time which is unlike any timeshare that I have seen.

Many have actually experienced gains on their contracts which for a timeshare is simply unheard of, but even at holding 50% of its value if you go to sell later is quite remarkable if you've held the contract for at least the time-period where you have made up your costs in comparison to paying rack rates.

For example, my wife and I are closing on two VGC contracts that will take about 9 years to make up for the initial costs versus paying our usual cash rate. After 9 years if we were to sell (not planning on it) and we received 50% of our initial buy-in we would be way ahead versus simply paying rack rates to Disney every year. We are not buying into DVC with the expectation of selling our contact, but honestly, the fact that a DVC contract doesn't drop to $1 like so many others gives great confidence in making the initial plunge into DVC.

With the money Disney continues to invest in DL and WDW with things like Cars Land, Star Wars Land, etc. I do not see the demand for high end accommodations slowing down at Disney Resorts anytime soon so I would suspect most of the DVC contracts will hold up quite well in the many years ahead.

com_op_2000 · Aug 30, 2015

IMHO, the contract that have 2042 end-of-contract dates will start to loose monetary value @2035. At that point in the contract's life there will be too little time left on the contract to recover the cost vs paying OOP for your stays.

disneynutz · Aug 30, 2015

As long as demand is stronger than the supply and Disney keeps selling at higher prices resale will retain it's value.

A few years ago we sold some contracts and took a $10,000 loss so you never know what can happen.

:earsboy:

Bill

miTnosnhoJ · Aug 30, 2015

I agree that this is remarkable that the Disney timeshares hold their value. I was one of those who was dead set against timeshares because the bulk of the money you spend seems to disappear in front-end commissions and profits, so very little is left when you try to sell. I also resented the high pressure tactics.

About 5 years ago, I went through the Contemporary Resort on the monorail, and I noticed the Bay Lake Towers building. At first I thought it was an add-on to the hotel, but then I found that it was a DVC Timeshare. The lightbulb went off in my head, and I remember thinking "I would totally buy that!" - (because as a kid, the Contemporary and the monorail were the coolest things on the planet)

Now, we have some points at VGF and are quite happy with the whole setup.

crisi · Aug 30, 2015

disneynutz said:
As long as demand is stronger than the supply and Disney keeps selling at higher prices resale will retain it's value.

A few years ago we sold some contracts and took a $10,000 loss so you never know what can happen.

Bill

And therein lies the rub.

You should intend the contract to be worth nothing - if you don't hold it until the end it will be worth something, but when you need to sell it because the market crashed, you lost your job, etc. you may hit one of those periods where its worth has plummeted - granted, probably less than "Bob's Flybynight Timeshare of Cancun" But the most conservative estimate is "its sunk cost worth nothing."

pmaurer74 · Aug 30, 2015

I agree. I have the opportunity to "inherit" a timeshare from a family member, my mom is thinking of selling it and she may get a few hundred for it. I know my aunt paid thousands and thousands for it. I amy dying to find out more information about how their points system works but I think it is something like a 2 bedroom for two weeks and the MFs are $50 a month. I am thinking of taking it on or maybe with my sister because I could use it for Bonnet Creek and to see my sister in San Antonio every few years. I keep telling my parents that DVC holds they value unlike most timeshares.... I am hoping that my DVC at WLV will hold its value or that I will be given an option to extend the contract for it to hold its value and for my children to use later in life. If not then I will have 27-52 hopefully glorious Disney trips with it!

JimMIA · Aug 31, 2015

pmaurer74 said:
I agree. I have the opportunity to "inherit" a timeshare from a family member, my mom is thinking of selling it and she may get a few hundred for it. I know my aunt paid thousands and thousands for it. I amy dying to find out more information about how their points system works but I think it is something like a 2 bedroom for two weeks and the MFs are $50 a month. I am thinking of taking it on or maybe with my sister because I could use it for Bonnet Creek and to see my sister in San Antonio every few years. I keep telling my parents that DVC holds they value unlike most timeshares.... I am hoping that my DVC at WLV will hold its value or that I will be given an option to extend the contract for it to hold its value and for my children to use later in life. If not then I will have 27-52 hopefully glorious Disney trips with it!

Sounds like you're talking about Wyndham from the destinations you mention.

The best (but not only) place to get info about Wyndham questions of all kinds is over on the TUG Wyndham board. First read the Wyndham Information and Advice sticky at the top of the page -- but understand that the info about trading out via RCI is EXTREMELY dated and has changed completely from when the articles were written. Here's a link to TUG Wyndham

freediverdude · Aug 31, 2015

With the location, demand, and the way Disney keeps the resorts refurbed, I just don't see how they can lose much value until the contract is close to ending. Being able to use Disney transportation or walking right into a Disney theme park from your hotel is always going to be worth something. Sort of like how there are a few Hawaii timeshares that also retain value, because of their location and the company backing them.

deedisneydream97 · Aug 31, 2015

pmaurer74 said:
I agree. I have the opportunity to "inherit" a timeshare from a family member, my mom is thinking of selling it and she may get a few hundred for it. I know my aunt paid thousands and thousands for it. I amy dying to find out more information about how their points system works but I think it is something like a 2 bedroom for two weeks and the MFs are $50 a month. I am thinking of taking it on or maybe with my sister because I could use it for Bonnet Creek and to see my sister in San Antonio every few years. I keep telling my parents that DVC holds they value unlike most timeshares.... I am hoping that my DVC at WLV will hold its value or that I will be given an option to extend the contract for it to hold its value and for my children to use later in life. If not then I will have 27-52 hopefully glorious Disney trips with it!

I, too, have become the new owner of a timeshare. Back in 1997, this person paid close to $8,000 for a 2 bed/2 bath timeshare (assigned week). They cannot be given away apparently, nobody wants to buy....well, it was given to me. I was willing to take it....yearly fees are less than $850. Includes all recreational activities like mini golf, bikes, etc. Minutes away from Disney property. In 1997, we purchased our first contract at BoardWalk. If I wanted to sell it, I could get $20/point more than what I paid most likely.

This timeshare has not had a rehab probably since 1997, and has recently started upgrading things. So that is why I don't get too bent out of shape when DVC takes 7 to 8 years to rehab. Haven't stayed at the new place yet, but am looking forward to it....am curious to see the differences. Since I am an annual passholder, I can park at whatever park I want....and feel I am at a big advantage because I know all of the in's and out's at WDW.

I have many DVC contracts, and they all have either retained their initial purchase price or exceed it (except for SSR). Plus I have had many years of wonderful vacations. And can still sell my contracts at a profit (except SSR). Not too shabby.

JimMIA · Aug 31, 2015

crisi said:
You should intend the contract to be worth nothing - if you don't hold it until the end it will be worth something, but when you need to sell it because the market crashed, you lost your job, etc. you may hit one of those periods where its worth has plummeted - granted, probably less than "Bob's Flybynight Timeshare of Cancun" But the most conservative estimate is "its sunk cost worth nothing."

This is really sensible advice, and well worth heeding.

You will hear all sorts of anecdotal examples of someone making a profit. And if you let me choose the buying and selling dates, I can show you profits in a LOT of things.

But if you want to be sensible, don't consider much resale value in your calculations for buying DVC or any other timeshare. Most of the time, when you see folks doing that, they are trying to justify -- not analyze -- a purchase.

Drewski77 · Aug 31, 2015

JimMIA said:
But if you want to be sensible, don't consider much resale value in your calculations for buying DVC or any other timeshare. Most of the time, when you see folks doing that, they are trying to justify -- not analyze -- a purchase.

This is partially correct. The difference with DVC compared to other timeshares is the demand for onsite Disney accommodations. My VGC example holds up because if I sell in 20 years, not only will I have saved a lot of money off of the rack rate but my contracts will be worth somethings as there will still be 25 years left for someone to save a large amount per year when staying that the highly desired GC. This simply is not the case with the vast majority of timeshares and is more of an analyzation as opposed to a justification.

zavandor · Sep 1, 2015

It depends on how you buy the timeshare in the first place.
The OP is buying VGC now, so I guess it's on the resale market. It's true that it should keep its value in a few years time, at least a good portion of the value. However, the same is true for other timeshares bought on the resale market. If you buy a timeshare for $1 on Ebay, it will still keep its value in a few years time

The same is true for timeshares like Marriot, that cost a bit more on the resale market.

If you buy direct it's a different matter, entierly and it's true that DVC kept most of its value and many long time members are even selling now for more they paid direct 15 years ago. But at today prices, I think it won't be true anymore.

Drewski77 · Sep 1, 2015

zavandor said:
It depends on how you buy the timeshare in the first place.
T If you buy a timeshare for $1 on Ebay, it will still keep its value in a few years time
The same is true for timeshares like Marriot, that cost a bit more on the resale market.

The problem with $1 Ebay timeshares is that while they might retain their "value" many people still stay away from them because the resorts are generally not a place that someone will go every year, and as such the maintenance fees are a big drag on their liquidity in comparison to a DVC contract.

With a DVC contract the rental market is so strong that you can more than cover your annual MF which is another significant difference in comparison to $1 Ebay timeshares. There is a reason those timeshares are are $1 and yet many go unsold, I for one wouldn't buy one for $1 and obviously many others feel the same.

Popouri DVC · Sep 1, 2015

I think it's a good thing that DVC retains its value. I don't ever plan on selling, but my contracts don't expire until 2064. I'll be rather old before then so who knows?

zavandor · Sep 1, 2015

Drewski77 said:
The problem with $1 Ebay timeshares is that while they might retain their "value" many people still stay away from them because the resorts are generally not a place that someone will go every year, and as such the maintenance fees are a big drag on their liquidity in comparison to a DVC contract.

I wouldn't suggest to anyone to pick a random timeshare on Ebay, but some can be a very good deal if they have good trading power for low MF. With some flexibility one could use one of such timeshares to enjoy DVC in a much more economical way and use them to travel to other destinations better than DVC would allow. I guess the best ones would cost a bit more than $1, but probably still in the $100s range. However finding the good deal requires a lot of active investigation, many timeshares are not even worth $1.

deedisneydream97 · Sep 1, 2015

zavandor said:
I wouldn't suggest to anyone to pick a random timeshare on Ebay, but some can be a very good deal if they have good trading power for low MF. With some flexibility one could use one of such timeshares to enjoy DVC in a much more economical way and use them to travel to other destinations better than DVC would allow. I guess the best ones would cost a bit more than $1, but probably still in the $100s range. However finding the good deal requires a lot of active investigation, many timeshares are not even worth $1.

I don't know about other locales for timeshares, but the one that was transferred to me (no $ involved) still required the use of a local attorney to do the things needed to record the deed with the county and other little things. We opted out of title search, since the person transferring title gave me the original title documents. Then, the company that owns the timeshare also charges you a fee to complete the paperwork on their end to make you the new member. All in all, less than $350 I think. The process in Florida was called a "quit claim Deed". Pretty painless but took over four months to complete, start to finish.

JimMIA · Sep 1, 2015

Drewski77 said:
The problem with $1 Ebay timeshares is that while they might retain their "value" many people still stay away from them because the resorts are generally not a place that someone will go every year, and as such the maintenance fees are a big drag on their liquidity in comparison to a DVC contract.

Like everything else, it depends...

About four years ago, we purchased a Wyndham contract that I would estimate is the equivalent of 600-700 DVC points in what it buys. I paid a little less than $2,000 including all closing and transfer costs. Our annual MF's are just over $2,400, which is FAR less than an equivalent DVC contract dues would be. Our home resort (Great Smokys) is well-established and annual MF increases are very small.

That contract gives us direct access, through Wyndham's internal system, to about 105 resorts in 59 US locations if my count is right. And that number is growing by several new additions each year -- both through building new resorts and acquisitions. Full individual RCI membership, including ALL RCI benefits, is included in our MFs. In December 2013, we exchanged into an OKW 2 bedroom for just a few dollars more than HALF what it would have cost in OKW points MF's alone. Also in 2013, we enjoyed a full week at Great Smokys with our entire family -- three 2 bedroom villas for 7 nights, all on one year's worth of points. Last summer, while our daughter was attending a Duke University TIP camp in St Pete, we stayed at a decent Orlando resort for a week, in a nice one-bedroom villa, for a little over $200 on an RCI Last Call. A few weeks ago, we returned from two weeks in Arizona with most of our trip staying at Wyndham Sedona and Wyndham Flagstaff, all on points. We don't plan on going to Hawaii, but if we did, we would have a choice of 11 resorts on three islands. I could go on and on, but you get the picture.

When we exit Wyndham, if we lose the $2,000 we spent going in, I'm fine with that.

With a DVC contract the rental market is so strong that you can more than cover your annual MF which is another significant difference in comparison to $1 Ebay timeshares. There is a reason those timeshares are are $1 and yet many go unsold, I for one wouldn't buy one for $1 and obviously many others feel the same.

Two points:

The same could be said of other timeshares, if you know your system, buy carefully, and manage wisely. I know of Wyndham owners who run pretty nice little online businesses doing nothing but renting Wyndham reservations. They are active at a much higher rate than anyone I know of at DVC. If you told them there was a limit of 20 rentals a year, they would laugh you out of the room.
The other point is that, with DVC, Wyndham, or anyone else's system, you would be a fool to count on renting. Renting could be stopped or greatly restricted with a swipe of a pen. Examples: A few years ago, Wyndham eliminated the ability to transfer points between accounts; DVC reduced transfers from unlimited to only one in or out per year. DVC considers 20 or more rentals annually to be "commercial renting," which is prohibited. None of that stuff is guaranteed, and counting on renting for anything is a fool's bet.

DVC Contracts Retaining Value is quite Remarkable for a Timeshare

Drewski77

Mouseketeer

com_op_2000

DVC Member since '93; One Hour from WDW

disneynutz

DIS Veteran

miTnosnhoJ

DIS Veteran

crisi

DIS Veteran

pmaurer74

DIS Veteran

JimMIA

There's more to life than mice...

freediverdude

Was very touched by the Tapestry of Dreams parade

deedisneydream97

DIS Veteran

JimMIA

There's more to life than mice...

Drewski77

Mouseketeer

zavandor

DIS Veteran

Drewski77

Mouseketeer

Popouri DVC

Mouseketeer

zavandor

DIS Veteran

deedisneydream97

DIS Veteran

JimMIA

There's more to life than mice...

Share this page

DIS NEWS & UPDATES

New DISboards Threads

Latest posts