DVC RESALES
DVC RESALES

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Old 12-14-2012, 08:37 AM   #16
jarestel
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Originally Posted by bighoo93 View Post
Are there people on these boards who are saying they are buying DVC so they can sell it later at a profit?
I think there are many who view the purchase of the timeshare as an investment and as such expect it to retain a certain level of value over time. Whether this is an appropriate mindset for time share purchases is certainly open to debate, but nevertheless it exists.
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Old 12-14-2012, 08:48 AM   #17
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I think there are many who view the purchase of the timeshare as an investment and as such expect it to retain a certain level of value over time. Whether this is an appropriate mindset for time share purchases is certainly open to debate, but nevertheless it exists.
That's very different though. The admonitions are to not buy and expect its value to increase (which I think is quite obviously good advice). That is different from expecting it to retain some value, which is extremely reasonable. Thus far, those who expected DVC values to be worth zero on resale have been wrong. Maybe that will change, but history is often a useful guide. As long as Disney remains an extremely valued brand and WDW an extremely attractive destination for visitors around the world, DVC points will have value on the secondary market. If either were to dissolve, DVC point value on the secondary market would collapse. Oh, and of course if Disney purposely destroys the value of secondary market points by restricting their use in a significant way.
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Old 12-14-2012, 09:26 AM   #18
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Are there people on these boards who are saying they are buying DVC so they can sell it later at a profit?
There used to be many who sold for profit but that has pretty much ended.
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Old 12-14-2012, 09:34 AM   #19
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If a timeshare is selling for only a few dollars on eBay, then the market is saying that the future use of that timeshare for vacations is only worth a couple of dollars. If you buy a timeshare on day one and sell it on day two and can only get pennies on the dollar even though all that 'future use' is still there, that implies to me the timeshare was seriously overpriced.
Yup, Disney is grossly overpriced but has the theme parks and Magic to draw buyers in.
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Old 12-14-2012, 02:48 PM   #20
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Are there people on these boards who are saying they are buying DVC so they can sell it later at a profit?
I doubt there are that many people that plan to do that. And while I don't consider my DVC an investment, I definitely consider it an asset (a depreciating asset though).
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Old 12-14-2012, 03:07 PM   #21
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I doubt there are that many people that plan to do that. And while I don't consider my DVC an investment, I definitely consider it an asset (a depreciating asset though).
And you are right, it is a depreciating asset. When people say they are "making an investment" in DVC they are not talking about buying and selling it at a profit. But they are talking about buying an asset that they expect will provide them with a tangible return. Primarily savings on future lodging, but also other potential discounts. Thinking of it as an investment is entirely appropriate, and I think it is a wise approach to consider whether the return is worth it to your own particular situation.
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Old 12-14-2012, 03:14 PM   #22
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Our first DVC purchase was in 2008 - we purchased for under $100 a point with incentives and such.

We have since made three more DVC purchases, one more direct, and two resales.

Our best value was our Hilton Head Purchase at $41.85 per point - yes, the MF's are a lot higher per point at HHI, but we LOVE LOVE LOVE that resort and look forward to using it for many years to come. We have stayed in a 1 BR, 2BR, and a 3BR Grand Villa. It is such a great departure from WDW, and they do a really great job with the activity programming, and keeping the resort beautifully maintained!

Our most expensive purchase was BLT at around $97 a point - plus we received a 7 night cruise, plus $$ off per point as incentive.

Here is the entirety of the problem of with the price of DVC:

When DVC was first started, inventory was limited to one resort - demand wasn't high, because it truly was Disney's best kept secret. Then they added resorts, raised prices, amped up marketing, built resorts, added features... built resorts, raised prices, raised prices, raised prices.....

The volume of product available for purchase is larger than the volume of cash in hand consumers ready to buy (retail or resale).

Classic economics - supply is larger than demand, so Disney has to spend a vast amount of resources to create a false sense of demand, artificially raise prices, and then market a false sense of value with the urgency of 'by now, prices are going to go up!'

DVC is a leased product with an end date - what happens when that product expiration date is reached?

They have already given OKW owners the option to extend their contract - will that become a regular thing?

How will all of that effect resale prices?

There has to be one of two things happen to stabilize the value of DVC:

1 - DVC has to stop building to equalize supply and demand
2 - DVC has to charge a high transfer fee to make resales full value.
(for instance a $2,500 transfer fee that would grant buyers access to ALL of the exchange options available through direct purchase - instead of limiting the options on resales, Disney could capitalize the process)

Presently Disney makes nothing from a resale - I don't even know if there is a transfer fee in place. (Does anyone know?)

Disney has to make the opportunity to profit from resales in some way by bringing the price of resales closer to the price of direct purchases - they can't do that by price per point, but they can through fees and such - they just haven't gotten smart about the whole thing.

As previous posters have said - the December meeting would never be the time to announce changes....so... stay tuned!
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Old 12-14-2012, 03:30 PM   #23
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Presently Disney makes nothing from a resale - I don't even know if there is a transfer fee in place. (Does anyone know?)

Disney has to make the opportunity to profit from resales in some way by bringing the price of resales closer to the price of direct purchases - they can't do that by price per point, but they can through fees and such - they just haven't gotten smart about the whole thing.
They do not have to do this at all. There is no reason that Disney needs to profit from secondary market resales any more than a homebuilder needs to profit from resale of a house. Building resorts and selling them on a limited space of real estate is not a perpetual profit model (unless you can spread it out until the leases expire...). That's just the way it goes. Fortunately, Disney takes in $42 billion in revenue annually across many different businesses.
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Old 12-14-2012, 03:39 PM   #24
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Originally Posted by bighoo93

Are there people on these boards who are saying they are buying DVC so they can sell it later at a profit?
Probably not today, but 5 years ago you could have made a few bucks if you had bought resale around 1999-2002 and decided to sell. Maybe not enough to cover the commission, though.

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Old 12-14-2012, 06:41 PM   #25
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Five years ago I could have sold all my direct purchase points across three different resorts for more than I bought them for.
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Old 12-14-2012, 09:41 PM   #26
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Five years ago I could have sold all my direct purchase points across three different resorts for more than I bought them for.
That's great. But it isn't something you can count on. Intrinsically, there was less value with 5 fewer years of use remaining. Random market fluctuations can work out, but it doesn't make sense to plan on that.
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Old 12-14-2012, 10:14 PM   #27
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If a timeshare is selling for only a few dollars on eBay, then the market is saying that the future use of that timeshare for vacations is only worth a couple of dollars. If you buy a timeshare on day one and sell it on day two and can only get pennies on the dollar even though all that 'future use' is still there, that implies to me the timeshare was seriously overpriced.
In a sense, however, the timeshare demand is to such a small group that market forces don't work very well. There are simply far too many people out there where timeshares would be a perfect option for them that they either don't know about them or have discounted them for various often inaccurate reasons.

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I've been monitoring this closely as I'm currently awaiting my first contract to come through in the used market. The rumors that resale inventories will be restricted to the resort at which they purchased appears to be false, or at least that is what I gathered after watching the tweets from dvcnews. Good news for us in the used market!

Hopefully this was all a marketing ploy to get new resales and that this won't ever happen, which would totally hose the initial investment from those who bought direct through Disney and plan on reselling some day.
I don't think it even comes up to the level of a rumor, more speculation only. It is my opinion that the POS is a contract between DVC and it's members and that there is no provision within that contract that would allow for this restriction based on qualified or unqualified points. I believe the only way one could be restricted to a single resort is if that resort ceases to be a member of the club. The same answer applies to the issue of any difference between reservation lead times.
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Old 12-14-2012, 10:20 PM   #28
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Are there people on these boards who are saying they are buying DVC so they can sell it later at a profit?
It's certainly possible to buy DVC and resell at a profit but you need to buy below usual market value. I've done it and I've turned down contracts where I could have made a profit but didn't think it was enough to justify the hassle.
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Old 12-14-2012, 11:07 PM   #29
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That's great. But it isn't something you can count on. Intrinsically, there was less value with 5 fewer years of use remaining. Random market fluctuations can work out, but it doesn't make sense to plan on that.
I know, in fact selling a timeshare at a profit is usually unheard of. My point through this thread is rofr propped up the value of resales for years. The economy and dvc's reduced use of rofr killed the inflated resale value one used to be able to get. The value to a timeshare owner is in using their timeshare over the long term. The disparity between new and used contracts in the industry is huge, some simple research will prove that out. The industry has responded by limiting perks, access, whatever from resales to encourage new sales. There's nothing wrong with that, it's business. Many resale buyers across the industry have suffered these restrictions. Why wouldn't Disney impose larger sanctions against resale buyers? The downside of this to direct buyers is that it kills the direct buyers resale value (mine to). I don't view my dvc as something for sale l view it as prepaid lodging where I get my best value using it for the entire term of the lease. Anything short of that and the benefits of my initial outlay is reduced. In October I had 16k worth of rack rate rooms for like 650 points dues was less then 4k and 19 family members had a blast...... That's where my value in dvc lies. It's the intangible that gives dvc the value for me not whatever price it would resell at as I have no intention of selling. Dvc proved to be cheaper and less hassle then the 2nd home I bought in South Florida which I used less and will be closing on it's sale in a couple of weeks.
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Old 12-15-2012, 11:03 AM   #30
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The disparity between new and used contracts in the industry is huge, some simple research will prove that out. The industry has responded by limiting perks, access, whatever from resales to encourage new sales. There's nothing wrong with that, it's business. Many resale buyers across the industry have suffered these restrictions. Why wouldn't Disney impose larger sanctions against resale buyers?
I disagree, I think there is something wrong with it. Disney owns and operates a great many hotels, if they wanted to expand that business and make continuing revenues on the use of new facilities, they should have built out more hotel rooms for cash reservations. Instead, they chose to build and sell timeshares. This is a different business model. You get all your money up front, and in exchange you don't take in more revenue (other than annual fees) in the future. This is a business decision, and Disney made it consciously because they know how to run hotels and they could have just kept doing that. They sold the timeshares, so yes, I think there is something wrong with then adding restrictions after the fact that destroy resale value. It is wonderful for you that you never plan to sell. Neither do I. But maybe the widow I bought my resale contract from never planned to sell either. Sometimes it happens. If Disney adds these restrictions, they are inarguably taking away value from owners, even those who never realize it.

And I don't really give a hoot that other timeshare companies do this. That doesn't make it right, it just shows why the timeshare industry is viewed with such general scorn and distrust. But Disney isn't a timeshare company. They bring in $42 billion in revenue on an annual basis across a large number of businesses. You might argue that a predominantly timeshare company needs to bleed every drop of revenue they can, even if it means screwing their owners. As long as they get that signature and the money, they don't really care. After all, people already don't trust timeshares. Disney has reason to care. DVD is a wholly-owned subsidiary and a minor part of their revenue (I don't know the exact number, but their entire business unit makes about $12 billion and that includes ALL resort and park revenue, so DVD revenue is well below that figure). Disney has an extraordinarily valuable brand to protect that goes WAY beyond their timeshares. So 1) they don't need to pull customer-hostile stunts like other timeshares because it is a small part of their revenue and 2) they don't want to risk their brand over this kind of thing. DVC gets people to the resorts, where they spend a ton of money that mostly goes to Disney.

I don't pretend to know what Disney is going to do, I just don't think it would be wise for them to put severe restrictions on resale (or ban renting points, another suggestion that I often see promoted and defended here). Disney has a different business than any other timeshare company.
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