DVC RESALES
DVC RESALES

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Old 09-10-2012, 11:44 AM   #76
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Originally Posted by montrealdisneylovers View Post
I give a lot less consideration to the time value of money in todays investing environment (extremely low interest rates and crazy volatile stock market)
It's a good point.

Looking at our actual return on investment, over the past 5 years, we're not really even covering inflation (that's money in the market, FYI, not liquid savings)...even considering compounding money. Looking at our rate of return...it's right about average for the market over those 5 years. Since 2007, there have been at least a couple years we've LOST money. At best, it's a wash when factoring in inflation.. Hopefully that will change over time (2012 has been a much better year, so far)...but not yet.
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Old 09-10-2012, 11:51 AM   #77
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Originally Posted by Brian Noble View Post
FWIW, I completely agree with this. You can pick the cost rate you like (and can still justify buying resale even with a relatively conservative cost of capital) but you should at least consider it. For anyone who would rather not do so, I have a proposition: loan me $10,000 today, and I'll pay you back $500 a year for the next 20 years.
To be clear..it was considered...and I said as much when talking about opportunity cost. Just not in the rough room rate calculation...because the analysis I presented was done at purchase (5 years ago) and I didn't have any interest in playing clairvoyant with something as roughed out as "approximate nightly room rate in year 5".
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Old 09-10-2012, 11:58 AM   #78
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Originally Posted by wdwfamilyinIL View Post
We have been throwing around the idea of buying dvc for a while, for some reason we have just enough doubt that we don't go for it. As a family we go to WDW once a year, typically we like to stay 7-10 days. I love french quarter, don't really have the bug to into the deluxes although we are staying for 2 nights after our cruise at CR. My whole thing is I can't figure in where it will save money for us. My husband is a disney addict, I know we will go every year unless something major would happen. We will always stay on site, just for the fact we fly in and I don't want to worry about a car and going back and forth. Typically a trip for us runs around 7000, give or take, so we could easily have our money back in 3 years......but is it going to really save us anything? I also find that I get very confused with all the points, as it is now I call my TA and tell her what I want and thats it, done deal.

I would love to find a way to save some money, and maybe its my misunderstanding of DVC, but would it work for people like us?
While your trip may cost you 7k a year....I'm betting lodging is only a small portion of that. And THAT'S the portion you want to consider using in any break even scenario...because all the other costs (tickets, food, transportation) are going to remain.
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Old 09-10-2012, 12:16 PM   #79
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Originally Posted by JimMIA View Post
1 - Dean's suggestion of using a shorter timeframe than length of contract for evaluating the financials.

Although a LOT of people assume otherwise, I think most timeshare owners will NOT hold their contracts the full term. 30-50 years is a very long time and life has a way of changing. If most of us don't stay in our homes long enough to pay off a 30-year mortgage, what's the likelyhood that we'll really keep anybody's timeshare for that period? My heart might tell me I love the place, but my brain is saying, "NOT!"

I think Dean's suggestion of a 10-year timeframe is reasonable, although it will be too long for some. Once you use that timeframe, then you have the difficult task of trying to guess what the resale net will be in 10 years. I think that is either next to impossible -- or not too far from zero. Take your pick. Personally I think zero recovery is the only safe number, but YMMV.

Using a 10 year timeframe will yield what should be a much more rational value for acquisition cost per point per year. And it will definitely change the math for price comparisons toward a much more conservative equation.
I think the time frame has to be incredibly variable based on the person buying, which is the problem. There isn't really a "best" time frame for everyone, IMHO.

We have no intention to ever sell...and we're 5 years into it. We bought it as pre-paid vacations at a discount, not an "investment" (meaning something we would eventually recoup costs on, via resale). Granted, it doesn't mean we won't change our mind in 10 or 15 more years...but as of now, we have no compelling reason to do so. We bought with the intent to use the contract until expiration (ours or the contracts). Maybe 50 years is too long to amortize over (though we were in our early 30's when we bought, and were making annual trips before we ever had kids)...but 10 (for us) would be far too short to be representative of use.

I suspect the shorter term is based on the way that person perceives they will use the timeshare. Timeshare "specialists" seem to buy and sell much more frequently than the "average" buyer,at least anecdotally. For them, 5 to 10 years might be about right...because it's likely going to be sold around that time frame.

I use 50 years because, without knowing the proceeds of resale (which will be based on a ton of factors, including the economy at the time of resale) when/if there is a choice to resell....it's an impossible calculation. Since I have not thought of selling it...it's impossible to project even the relative use that will be left in the contract when/if we were to sell. It's dicey using the current 2042 contract prices...because the economy stinks. Yes, I've heard the point that the lower economy drives people to resale for cheaper prices...it also drives people completely out of the market, altogether.

In any case, if I were to use the same calculation, but amortize the up front cost over 10 years, include our annual dues, our room rate for our upcoming trip would be about $330 per night (9 nights this trip). That's not taking into account opportunity cost on the initial money.

Of course, after 10 years of use...your "estimated room rate" is likely going to drop into the 130's (assuming the same growth in dues over the next 5 years)...which makes the discount even more substantial.
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Old 09-10-2012, 12:20 PM   #80
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Originally Posted by ELMC View Post
Agreed. However, as we have seen on here, people can do lots of things to make the numbers "make sense" even when they really don't.
And that was partly my point. While I agree with Brian that they have the right to make bad decisions, I'm always sad when people do so, esp if they had the opportunity to have more info and make better decision. I'm quite aware that often people will make emotional decisions in spite of reasonable information, we see it here and elsewhere all the time.

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I'm not offended.

But offering opinions without reason, and/or without substantive information which depicts the difference, isn't really worth much. It's precisely what I suggested: passing judgment on contributions rather than actually contributing anything interesting.

If you can't be bothered (which is essentially what you said)...don't be bothered. Simple as that.
If that's the way you took it then I apologize, that was not my focus or intent. However, these are issues that have been discussed to excess over time plus the principle was the important thing and I felt (still do) that a numbers discussion was not helpful or reasonable in this situation. However, it seems you are saying that one needs to explain and justify every time one posts an opinion, we'll simply have to disagree if that's the case.
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Old 09-10-2012, 12:29 PM   #81
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Originally Posted by pilferk View Post
I think the time frame has to be incredibly variable based on the person buying, which is the problem. There isn't really a "best" time frame for everyone, IMHO.

We have no intention to ever sell...and we're 5 years into it. We bought it as pre-paid vacations at a discount, not an "investment" (meaning something we would eventually recoup costs on, via resale). Granted, it doesn't mean we won't change our mind in 10 or 15 more years...but as of now, we have no compelling reason to do so. We bought with the intent to use the contract until expiration (ours or the contracts). Maybe 50 years is too long to amortize over (though we were in our early 30's when we bought, and were making annual trips before we ever had kids)...but 10 (for us) would be far too short to be representative of use.

I suspect the shorter term is based on the way that person perceives they will use the timeshare. Timeshare "specialists" seem to buy and sell much more frequently than the "average" buyer,at least anecdotally. For them, 5 to 10 years might be about right...because it's likely going to be sold around that time frame.

I use 50 years because, without knowing the proceeds of resale (which will be based on a ton of factors, including the economy at the time of resale) when/if there is a choice to resell....it's an impossible calculation. Since I have not thought of selling it...it's impossible to project even the relative use that will be left in the contract when/if we were to sell. It's dicey using the current 2042 contract prices...because the economy stinks. Yes, I've heard the point that the lower economy drives people to resale for cheaper prices...it also drives people completely out of the market, altogether.

In any case, if I were to use the same calculation, but amortize the up front cost over 10 years, include our annual dues, our room rate for our upcoming trip would be about $330 per night (9 nights this trip). That's not taking into account opportunity cost on the initial money.

Of course, after 10 years of use...your "estimated room rate" is likely going to drop into the 130's (assuming the same growth in dues over the next 5 years)...which makes the discount even more substantial.
Of course there are many variables, your assumptions give you the best case possible. My sense of a shorter time window is independent of selling down the road and more about limiting risk. Any timeshare, including DVC, is a high risk venture. If the best case scenario is the only way it works for someone, the risk is far too high and the chances of life and timeshares happening too you are all too likely. Like the CAN resort where the fees are not almost $28K per week that I mentioned a couple of weeks ago or a handful of resorts that have closed or had owners shut out over the years. I'm sure you'll say that would never happen with DVC, dues won't go up high enough to make owning more expensive than not, the parks will remain open, etc but those are all real long term risks that are not out of the realm of possibility. I love DVC and prefer to stay on property most trips though my costs are generally in the $400 a week range when I stay at DVC rather than $200-330 a night.
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Old 09-10-2012, 12:33 PM   #82
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What would be nice is a little flow chart that a person could use that would show if DVC would work for them.

Questions could be something like:

1 - Do you want to stay on site
2 - Do you plan to visit at least once every 3 years
3 - Can you plan in advance
4 - Do you spend $??? per night for a room
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Old 09-10-2012, 12:34 PM   #83
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Originally Posted by Dean View Post
If that's the way you took it then I apologize, that was not my focus or intent. However, these are issues that have been discussed to excess over time plus the principle was the important thing and I felt (still do) that a numbers discussion was not helpful or reasonable in this situation. However, it seems you are saying that one needs to explain and justify every time one posts an opinion, we'll simply have to disagree if that's the case.
No, I'm saying the opinion isn't worth much, without explanation or justification.

So, as I said..I'll just refrain from discussing the issue with you...that way, you won't have to be bothered to provide anything of real substance.

As I said, fair enough.
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Old 09-10-2012, 12:41 PM   #84
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Originally Posted by Dean View Post
Of course there are many variables, your assumptions give you the best case possible. My sense of a shorter time window is independent of selling down the road and more about limiting risk. Any timeshare, including DVC, is a high risk venture. If the best case scenario is the only way it works for someone, the risk is far too high and the chances of life and timeshares happening too you are all too likely. Like the CAN resort where the fees are not almost $28K per week that I mentioned a couple of weeks ago or a handful of resorts that have closed or had owners shut out over the years. I'm sure you'll say that would never happen with DVC, dues won't go up high enough to make owning more expensive than not, the parks will remain open, etc but those are all real long term risks that are not out of the realm of possibility. I love DVC and prefer to stay on property most trips though my costs are generally in the $400 a week range when I stay at DVC rather than $200-330 a night.
Limiting ones risk is a smart thing to do. When I bought my assumptions were all based on looking 6-7 years out which is about as long a time horizon as I was willing to assume the risk of owning DVC for.
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Old 09-10-2012, 05:13 PM   #85
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No, I'm saying the opinion isn't worth much, without explanation or justification.

So, as I said..I'll just refrain from discussing the issue with you...that way, you won't have to be bothered to provide anything of real substance.

As I said, fair enough.
Fair enough, I'm quite confident I've contributed greatly over the years and will continue to do so, I'm sorry it's not been to your satisfaction. There is an ignore member option in the user choices.
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Old 09-10-2012, 05:29 PM   #86
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Fair enough, I'm quite confident I've contributed greatly over the years and will continue to do so, I'm sorry it's not been to your satisfaction. There is an ignore member option in the user choices.
As I get older I find that I just want to get to the point and not take the time to flower it up or explain my answers so I understand your position. We only have 78 or so Christmas vacations during out lifetime so lets make the most of our precious time.

I like most here on the DIS appreciate your contributions, thank you.

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Old 09-10-2012, 05:43 PM   #87
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As I get older I find that I just want to get to the point and not take the time to flower it up or explain my answers so I understand your position. We only have 78 or so Christmas vacations during out lifetime so lets make the most of our precious time.

I like most here on the DIS appreciate your contributions, thank you.

Bill
Thanks for the kind words.

My usual approach is to scan titles in the DVC section only and only view thread's that catch my eye. I generally concentrate on areas that are technical, rule related, exchanges and philosophical issues.
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Old 09-10-2012, 06:20 PM   #88
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Fair enough, I'm quite confident I've contributed greatly over the years and will continue to do so, I'm sorry it's not been to your satisfaction. There is an ignore member option in the user choices.
I always like reading your posts, I have learned a lot from them.
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Old 09-10-2012, 06:34 PM   #89
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Originally Posted by pilferk View Post
No, I'm saying the opinion isn't worth much, without explanation or justification.

So, as I said..I'll just refrain from discussing the issue with you...that way, you won't have to be bothered to provide anything of real substance.

As I said, fair enough.
Children, please!

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Old 09-11-2012, 02:09 AM   #90
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I always like reading your posts, I have learned a lot from them.
I'll second that Dean. I may not always agree with it, but I always learn something from your posts, especially since you have the overall timeshare perspective where I'm only familiar with DVC and Marriott atm.
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