DVC RESALES
DVC RESALES

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Old 04-08-2013, 09:54 PM   #16
Dean
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Originally Posted by theguda View Post
I just rented points for the first time and it got me thinking about buying a contract on resale. Here's how I ran the #'s and I'd love to hear comments or feedback.

Looks like the going rate to rent points is $11/$12 per point...so let's use $12 for this exercise.

Let's say I buy a Saratoga Springs 200 point contract for $11,000. This year the maintenance fees are $4.81 per point. So if someone paid $4.81 per point and sold them for $12...they'd realize a $7.19 profit per point. Selling all 200 points would net a profit of $1438 for the year.

Assuming a $11,000 cost to buy the contract....if I sold all 200 points each year and got a similar $7.19 per point profit...it would take me basically 7.6 years to recoup the contract cost. Am I looking at that correctly? Would anyone else like to share how long it took you to recoup the initial investment? I realize I didn't factor in what I'd lose by taking that $13,000 and investing it instead. I'm just curious to know if having that initital investment recouped in 7 years is a good deal...bad deal...or great deal.
In spite of the positive comments you've gotten, I'm not thrilled with your approach. It seems to me you've combining the ideas of using DVC and savings with the approach one would take looking at DVC simply as a true investment.

Since your main idea was related more to buying and renting, Lets look a little deeper. There are other costs and risks and they must be factored in. Historically dues and up front costs have gone up more than rental rates. IMO if you want to look at it as an investment you've got to consider what you could make on that money otherwise. As a long term investment, good mutual funds have a strong track record. DVC is a high risk investment and should be looked at accordingly. From an investment standpoint I'd want return of principle and around 20% before taxes given the risks involved. You've got to account for advertising, lost points, non payment, damages you have to pay for and the like.

Looked at from a personal use standpoint I think the best option is to look at what you're paying without owning vs what you pay with DVC. Personally I think you're historical usage without DVC is the better comparison than a single rental but that's a variable you must make a decision on. In that situation you still need to look at the lost income on the up front money, dues increases and risk including your personal situation. I think the quickest one is likely to break even is 7-8 years now that the points are pretty even throughout the week and most are going to be more in the 10-12 year or longer range, even longer for a 1 BR as the comparison. Of course there's more to the story than just dollars, there's also extra value. Don't make 2 mistakes I sometimes see. One is attributing savings to the kitchen and the other using DVC rack rates (even discount) as the comparison.
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Old 04-08-2013, 10:04 PM   #17
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I just rented points for the first time and it got me thinking about buying a contract on resale. Here's how I ran the #'s and I'd love to hear comments or feedback.

Looks like the going rate to rent points is $11/$12 per point...so let's use $12 for this exercise.

Let's say I buy a Saratoga Springs 200 point contract for $11,000. This year the maintenance fees are $4.81 per point. So if someone paid $4.81 per point and sold them for $12...they'd realize a $7.19 profit per point. Selling all 200 points would net a profit of $1438 for the year.

Assuming a $11,000 cost to buy the contract....if I sold all 200 points each year and got a similar $7.19 per point profit...it would take me basically 7.6 years to recoup the contract cost. Am I looking at that correctly? Would anyone else like to share how long it took you to recoup the initial investment? I realize I didn't factor in what I'd lose by taking that $13,000 and investing it instead. I'm just curious to know if having that initital investment recouped in 7 years is a good deal...bad deal...or great deal.
Whenever I see the words 'investment' and DVC in the same paragraph, I cringe. This is not an investment; no matter whether you buy direct or resale.

You are buying the opportunity to stay at a Disney resort for X amount of time per year. If you decide to sell later on and you 'make' money, consider yourself lucky but you better add up all the money you spent on vacations while using your points. If you 'lose' money, well, weren't you going on vacation anyway so did you lose anything? If you rent your points, you will get your maintenance fees paid for that year and some more but I know for a fact that my house rental is bringing more money in a year than any DVC contract can. So again, probably not a 'good' investment and I use that word loosely.

We bought our contract knowing we wanted to go back year after year to Disney. We bought it knowing that because we had it we would spend more money at Disney (tickets, food, traveling costs, etc....). All we assumed was that it would guarantee us a vacation at a place we love at a level of resort we wouldn't normally splurge on.

I don't intend to sell and I don't intend to rent (if I ever do this it will be solely that we have fallen on 'bad times' and need to cover the maintenance fees and can't afford a vacation and its additional costs.) If we fall on 'good times' again, we will definitely buy more points; probably resale. I love my contract and appreciate the vacations we have been on because we have it.

It's not a 'deal'; it's a vacation. If you figure out a way to 'feel good about the money you spent'; good for you but please don't twist it to be an investment.
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Old 04-08-2013, 10:25 PM   #18
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I call any outlay of $ an investment. Certainly not in the same terms as a mutual fund...more like a down payment on a house. And although I won't sell all my points, I do think the best way to compare costs is looking at the maintenance fees as a DVC member vs renting points. It doesn't matter if i sell my points or use them....I'm going to net the same dollar benefit either way compared to renting the points.

So strictly from a numbers perspective the difference between what you could rent points for - how much the points cost as a dvc member = profit. Profit per point x Number of points = annual profit. Total upfront cost / annual profit = how long it takes to recoup the upfront cost. That seems to be a very logical and smart way to determine, financially, if its worth it to a person.

So if I wanted to...I could buy a 200 point contract for $12,000, sell those 200 points every year and realize a profit of about $1400 and use that to pay off the $12,000. In approx 8.5 years I'll have all my upfront cost paid for by people who rented my points. Isn't that an "investment"...just like your rental property? Someone else lives in a house you own. If they pay long enough you own something someone else paid for.

Last edited by theguda; 04-08-2013 at 10:44 PM.
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Old 04-08-2013, 10:44 PM   #19
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I say "investment" because that's what it is. Not an invese
Your definition of an investment must be different from mine which is fine with me because I would never "invest" in DVC. I do consider it an invese since my investments tend to make me money and DVC 'makes' me spend more. But, of course, I am assuming you would use your DVC contract the way it was meant to be used.

I guess if you only intended to rent out your points, you could say you were making money. Better read that contract carefully. DVC can, at any time, take away perks or the ability to rent at any resort except your own home resort which may make your 'investment' less desirable to potential renters. There are rules that need to be followed and repercussions if you chronically rent your points out. So, good luck with your plan.
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Old 04-08-2013, 10:50 PM   #20
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You are buying the opportunity to stay at a Disney resort for X amount of time per year.
I've heard this before and don't understand it. It's not like you can't stay at Disney anytime you want. Buying DVC doesn't give you any better chance to stay at Disney. What it DOES do is make it less expensive
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Old 04-08-2013, 10:56 PM   #21
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You are buying the opportunity to stay at a Disney resort for X amount of time per year. If you decide to sell later on and you 'make' money, consider yourself lucky but you better add up all the money you spent on vacations while using your points. If you 'lose' money, well, weren't you going on vacation anyway so did you lose anything? If you rent your points, you will get your maintenance fees paid for that year and some more but I know for a fact that my house rental is bringing more money in a year than any DVC contract can. So again, probably not a 'good' investment and I use that word loosely.

We bought our contract knowing we wanted to go back year after year to Disney. We bought it knowing that because we had it we would spend more money at Disney (tickets, food, traveling costs, etc....). All we assumed was that it would guarantee us a vacation at a place we love at a level of resort we wouldn't normally splurge on.

I don't intend to sell and I don't intend to rent (if I ever do this it will be solely that we have fallen on 'bad times' and need to cover the maintenance fees and can't afford a vacation and its additional costs.) If we fall on 'good times' again, we will definitely buy more points; probably resale. I love my contract and appreciate the vacations we have been on because we have it.

It's not a 'deal'; it's a vacation. If you figure out a way to 'feel good about the money you spent'; good for you but please don't twist it to be an investment.
Exactly our view of our DVC timeshare.
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Old 04-08-2013, 11:47 PM   #22
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I've heard this before and don't understand it. It's not like you can't stay at Disney anytime you want. Buying DVC doesn't give you any better chance to stay at Disney. What it DOES do is make it less expensive
I say 'opportunity' because its not guaranteed that I will stay exactly when I want, where I want. As long as I book within the 7 to 11 month window, I have the 'opportunity' to get what I want. Sometimes, I may 'luck out' and get what and when I want under that time period. And sometimes, even if I am in that 7 to 11 month window I won't get what I want when I want it.

Of course, I can stay at Disney anytime I want, if I pay cash. But being a DVC member certainly doesn't make it cheaper. I have just paid in advance for my vacations. I go more often because I am a DVC member than if I was just someone off the street therefore I spend more there. Perhaps, years out I will save money because I will have been a member long enough and hotel prices will rise enough that it will become a 'good deal'. But meanwhile, I have spent a ton of money (happily) with no guarantee that resort prices will rise to the point that DVC is a 'good deal'.
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Old 04-09-2013, 12:00 AM   #23
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I say 'opportunity' because its not guaranteed that I will stay exactly when I want, where I want. As long as I book within the 7 to 11 month window, I have the 'opportunity' to get what I want. Sometimes, I may 'luck out' and get what and when I want under that time period. And sometimes, even if I am in that 7 to 11 month window I won't get what I want when I want it.

Of course, I can stay at Disney anytime I want, if I pay cash. But being a DVC member certainly doesn't make it cheaper. I have just paid in advance for my vacations. I go more often because I am a DVC member than if I was just someone off the street therefore I spend more there. Perhaps, years out I will save money because I will have been a member long enough and hotel prices will rise enough that it will become a 'good deal'. But meanwhile, I have spent a ton of money (happily) with no guarantee that resort prices will rise to the point that DVC is a 'good deal'.
Of course owning DVC makes taking trips less expensive. There are probably thousands of threads on disboards detailing how dvc saves money long term. The question is...are you gonna go enough the make the upfront cost worth it? Because once you recoup the initial cost the maintenance fees are SO much cheaper than any other way to stay at WDW. You can stay in a studio at AKL for 2 weeks in October for $700. That's ridiculously cheap. You may not view the DVC as a money saver but I bet most do.
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Old 04-09-2013, 12:58 AM   #24
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I call any outlay of $ an investment. Certainly not in the same terms as a mutual fund...more like a down payment on a house. And although I won't sell all my points, I do think the best way to compare costs is looking at the maintenance fees as a DVC member vs renting points. It doesn't matter if i sell my points or use them....I'm going to net the same dollar benefit either way compared to renting the points.

So strictly from a numbers perspective the difference between what you could rent points for - how much the points cost as a dvc member = profit. Profit per point x Number of points = annual profit. Total upfront cost / annual profit = how long it takes to recoup the upfront cost. That seems to be a very logical and smart way to determine, financially, if its worth it to a person.

So if I wanted to...I could buy a 200 point contract for $12,000, sell those 200 points every year and realize a profit of about $1400 and use that to pay off the $12,000. In approx 8.5 years I'll have all my upfront cost paid for by people who rented my points. Isn't that an "investment"...just like your rental property? Someone else lives in a house you own. If they pay long enough you own something someone else paid for.
Perhaps I am too literal, but the people who rented your points would have had all the fun @ WDW and you wouldn't have had a vacation.
I took your $12000 and invested it w/ a 6% rate of return and at the end of 7years had $18,044 in my pocket.
I took your $12000 'invested' it in SSR and rented 200 points for $11 per point and paid $4.81 MF for 7 yrs. making $8666, thus still being $3334 in the red. BTW, I think even $11 is high for a private renter of SSR to expect.
In both cases no vacation to WDW was enjoyed by the owner.
I think most people look at what lodging would cost them w/out DVC v. w/ DVC and base the number of years to recoup based on that.
In my mind it's a luxury purchase and as I contemplate buying my logic is - I like visiting Disney, I like staying in deluxe resorts at Disney, I can afford it, so I'm buying it. The only return I'm hoping for is the fun of future vacations.
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Old 04-09-2013, 05:46 AM   #25
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Of course owning DVC makes taking trips less expensive. There are probably thousands of threads on disboards detailing how dvc saves money long term. The question is...are you gonna go enough the make the upfront cost worth it? Because once you recoup the initial cost the maintenance fees are SO much cheaper than any other way to stay at WDW. You can stay in a studio at AKL for 2 weeks in October for $700. That's ridiculously cheap. You may not view the DVC as a money saver but I bet most do.
One of the issues with this approach is that you're comparing DVC to itself. DVC is generally an expensive way to go to Disney. There are so many more ways to visit Disney than staying at a DVC resort. Some are cheaper and some more expensive but generally DVC is on the higher end. There are a number of resorts in the area that are as nice or nicer than DVC that are off property, for some that's better and others are willing to pay dramatically more to stay of property. Just consider your options and realize what you are and are not getting.

My personal thought is that DVC is a good value for studios and 2 BR units for those that feel paying more to stay on property in a moderate or higher is a good value and comparing to 1 or 2 moderate or deluxe rooms. 1 BR and Grand Villas are less of a dollar value comparatively. Realize there is far more risk with a timeshare. There is the risk of a special assessment or that dues will go up more than expected. There is risk of loss of points for various reasons. If you use the points for non DVC options, you'll rob $$ value from your potential savings as well. I'd suggest you compare to how and when you normally vacation including the unit size, resort and time of year you'd likely be using.

Realize your projections are the best case scenarios, it's all down hill from there. Plus I'm not sure that you can rent SSR or OKW consistently for the overall going rate even currently. To me timeshares are as much about psychology as dollars and I believe most people spend any "savings" pretty quickly in other areas. Plus there are other ways to stay even at DVC that are potentially cheaper. I've had many 1 week stays at DVC 1 & 2 BR units for cheaper than that $700 a year cost. More risk and less cost but it's worked well for me.
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Old 04-09-2013, 08:16 AM   #26
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BTW, I think even $11 is high for a private renter of SSR to expect.
Given that two different point rental brokers are currently paying $11 per point, I don't think it's an unreasonable expectation.
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Old 04-09-2013, 08:22 AM   #27
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Given that two different point rental brokers are currently paying $11 per point, I don't think it's an unreasonable expectation.
Exactly. Go look at the rent/trade DVC board. People are posting $12 sales and they're selling like hotcakes.

Again, to clarify...I'm looking at this as a vacation and investment. I'm not going to sell all the points...but i could and in 7-9 years the contract would be paid off by others and I'd enjoy WDW for the low cost of just the maintenance fees.
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Old 04-09-2013, 08:55 AM   #28
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Exactly. Go look at the rent/trade DVC board. People are posting $12 sales and they're selling like hotcakes.

Again, to clarify...I'm looking at this as a vacation and investment. I'm not going to sell all the points...but i could and in 7-9 years the contract would be paid off by others and I'd enjoy WDW for the low cost of just the maintenance fees.
I think you've been clear on this point. People are disagreeing with you on two points. First, they (myself included) disagree that this is an investment. It's a timeshare, which by definition almost precludes it from being an investment. For me, an investment has some expectation of preservation of principle along with annual increases. A timeshare (even DVC) does not meet these expectations. It is a depreciating asset and the first 7-9 years of "gains" are actually a return of principle. The only real "gain" would occur on the back end and then only if you were to actually sell and only if there was some residual value. Too many ifs. That being said, if you disagree with what I'm saying here, then you probably view DVC as an investment. Not my way of looking at it, but I can respect your opinion.

Second, what people are saying is that there are better ways to enjoy WDW for a low cost starting 7-9 years from now. Think about it this way...would you give me $13,000 now to get absolutely no benefit for the next 8 years only to have the possibility of saving money on your vacations starting in 2021? Too long of a horizon for me.
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Old 04-09-2013, 09:22 AM   #29
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I think you've been clear on this point. People are disagreeing with you on two points. First, they (myself included) disagree that this is an investment. It's a timeshare, which by definition almost precludes it from being an investment. For me, an investment has some expectation of preservation of principle along with annual increases. A timeshare (even DVC) does not meet these expectations. It is a depreciating asset and the first 7-9 years of "gains" are actually a return of principle. The only real "gain" would occur on the back end and then only if you were to actually sell and only if there was some residual value. Too many ifs. That being said, if you disagree with what I'm saying here, then you probably view DVC as an investment. Not my way of looking at it, but I can respect your opinion.

Second, what people are saying is that there are better ways to enjoy WDW for a low cost starting 7-9 years from now. Think about it this way...would you give me $13,000 now to get absolutely no benefit for the next 8 years only to have the possibility of saving money on your vacations starting in 2021? Too long of a horizon for me.
My answer to that question is...probably. I would not be getting the "possibility" of saving money on my vacations in 7-9 years. Instead, the savings would be a certainty because there is no way maintenance fees will ever approach the cost of renting points. Also, I wouldn't be paying the $13,000...the people who rent my points would be paying it over the next 7-9 years (assuming i sold all my points).

I'm going to assume that over a long period of time the cost difference between maintenance fees and what you can get by renting your points will be about the same as today. So I expect that gap to average around $7 per point...which means maintenance fees are 60% cheaper than renting. So the real question is...is it worth to front $13,000 today...recoup that $13,000 via rental points over the next 7-9 years... to save 60% on my trips for the next 30 years? I think that's a smart financial move. My hesitation isn't the money...it's the time required to list and sell the points should I choose to do so. Thanks to everyone for all the comments. I really like to hear all te opinions.

Also, I view DVC as an investment because I see it as a vehicle to save money on my trips. To me, spending $500 on something that would otherwise cost me $1000 is the same as me buying a stock for $500 and selling it at $1000.
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Old 04-09-2013, 10:43 AM   #30
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My answer to that question is...probably. I would not be getting the "possibility" of saving money on my vacations in 7-9 years. Instead, the savings would be a certainty because there is no way maintenance fees will ever approach the cost of renting points. Also, I wouldn't be paying the $13,000...the people who rent my points would be paying it over the next 7-9 years (assuming i sold all my points).

I'm going to assume that over a long period of time the cost difference between maintenance fees and what you can get by renting your points will be about the same as today. So I expect that gap to average around $7 per point...which means maintenance fees are 60% cheaper than renting. So the real question is...is it worth to front $13,000 today...recoup that $13,000 via rental points over the next 7-9 years... to save 60% on my trips for the next 30 years? I think that's a smart financial move. My hesitation isn't the money...it's the time required to list and sell the points should I choose to do so. Thanks to everyone for all the comments. I really like to hear all te opinions.

Also, I view DVC as an investment because I see it as a vehicle to save money on my trips. To me, spending $500 on something that would otherwise cost me $1000 is the same as me buying a stock for $500 and selling it at $1000.
Am I the only one who finds it crazy to spend thousands of dollars on DVC and not use it personally for almost a decade?
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