906 point listing for VWL!

[rothesay]

Maybe, a lower return but an even lower investment so one might end up with more. But more work and more difficult to rent in all likelihood. I don't think it's difficult to find something that'll cash flow at 8-12% with less risk. Certainly rental real estate bought for cash and for an appropriate price should well exceed that as should a good mutual fund portfolio over time.

I know this is going a little bit off topic. But I do own a small portfolio of properties made up of condos, Townhomes and single family homes in the Orlando area. They were all bought between the period between 2010-2013 so it was near the bottom of the market. In theory, I should be cash flowing 13-14% but in reality I'm only cash flowing 7-8% return before tax. Every year there is always a major expense like new HVAC units, remodeling due to tenant turnover, septic field, roof, vacancy, etc that eats up the cash. Based on current valuation, I figure my portfolio may only net 2-3% cash flow per year. Of course I'm only talking about cash flow here, I'm not talking about return on investment that includes property value appreciation.

 

[Dean]

What do you mean by this? Do you mean that a buyer would be stuck with the big contract but Disney could break it up into smaller contracts to resell?

Yes

I know this is going a little bit off topic. But I do own a small portfolio of properties made up of condos, Townhomes and single family homes in the Orlando area. They were all bought between the period between 2010-2013 so it was near the bottom of the market. In theory, I should be cash flowing 13-14% but in reality I'm only cash flowing 7-8% return before tax. Every year there is always a major expense like new HVAC units, remodeling due to tenant turnover, septic field, roof, vacancy, etc that eats up the cash. Based on current valuation, I figure my portfolio may only net 2-3% cash flow per year. Of course I'm only talking about cash flow here, I'm not talking about return on investment that includes property value appreciation.

That's lower than I would expect. If you only look at the single family homes is it still that low? The profit is really made at the buy, one should be getting them at or below 80% of the actual value at the time if paying cash. It does take some work. Did you account for depreciation? But even at 7-8% plus appreciation, that's still far more than the numbers quoted.

 

[rothesay]

That's lower than I would expect. If you only look at the single family homes is it still that low? The profit is really made at the buy, one should be getting them at or below 80% of the actual value at the time if paying cash. It does take some work. Did you account for depreciation? But even at 7-8% plus appreciation, that's still far more than the numbers quoted.

I think on a good year, a single family home without HOA dues may bring in better numbers, but if you were to own multiple units over the long term, it may work out to 1 to 2% better than condos.

The real return is 7-8% because I bought when the market was down, if I were to buy the same portfolio using current pricing, it will be closer to 2-3% return, which is less than renting out DVC points. But to be fair, all my properties are managed by property managers, so when it comes to the level of work, it is fairly similar to renting out DVC points, but each month there are still some work involved on my part to manage the property manager in order to minimize leakage.

 

[kapicka]

My guess rothesay is that while the value of a DVC purchase may go up some in the short term, since it will go to zero eventually and your condos/town-homes will go up on average over the years you have made the right choice.

 

[Dean]

I think on a good year, a single family home without HOA dues may bring in better numbers, but if you were to own multiple units over the long term, it may work out to 1 to 2% better than condos.

The real return is 7-8% because I bought when the market was down, if I were to buy the same portfolio using current pricing, it will be closer to 2-3% return, which is less than renting out DVC points. But to be fair, all my properties are managed by property managers, so when it comes to the level of work, it is fairly similar to renting out DVC points, but each month there are still some work involved on my part to manage the property manager in order to minimize leakage.

That's not consistent with my experience but there is some work and hassle involved, more so finding the right property than even the repairs and management. And it's certainly not consistent with my investment experience which has been in the 11-12% range overall the last 10 years. But like DVC they are all long term commitments.

 

[skier_pete]

I would never buy DVC just to rent the points. If there is a severe economic turn down (and I'm talking worse than 2008) DVC rental market could be one of the biggest to take a hit. This is part of the reason Disney loves DVC, if there's a turn down, they still get their money (barring defaults), but if the consumer can't afford to go, they have to eat the trip or sell off the points.

 

[DVC Doctor]

Wouldn't the math works better if one were to buy into SSR in the low to mid 70s range, or OKW in the low to mid 60s range?

I think in today's market, finding something that will cash flow at 5% is sort of tough, whether it is dividend paying stocks, bonds or even real estate.

Yes, buying into SSR for $75pp should break even in around 11 years and OKW for $65pp would break even in about 9 years.

 

[Jennifer Brooklyn]

Maybe it is a wealthy person or family who is feeling very confident tonight they are moving to a large white house and might be too busy for the next 4 years to go on vacation....

Hey! Could be!!

 

[DougEMG]

I would never buy DVC just to rent the points. If there is a severe economic turn down (and I'm talking worse than 2008) DVC rental market could be one of the biggest to take a hit. This is part of the reason Disney loves DVC, if there's a turn down, they still get their money (barring defaults), but if the consumer can't afford to go, they have to eat the trip or sell off the points.

Back in 2011-2012 you could buy DVC points at SSR, rent them out and break even in 6-7 years, so not a bad deal. At today's rates it would make no sense buying to rent.

 

[mustinjourney]

Maybe it is a wealthy person or family who is feeling very confident tonight they are moving to a large white house and might be too busy for the next 4 years to go on vacation....

The seller of the VGF contract is a member of one of the Royal families in the middle east.

 

[Paula Sedley-Burke]

The seller of the VGF contract is a member of one of the Royal families in the middle east.

Wow. Obviously decided it wasn't for them! Thanks for the interesting info.

 

[mustinjourney]

Wow. Obviously decided it wasn't for them! Thanks for the interesting info.

Oil prices are down since 2013. Perhaps their allowance got cut.

 

[Paula Sedley-Burke]

Oil prices are down since 2013. Perhaps their allowance got cut.

Lol. My wife did some buisness in the middle East. One of the Royal Family was told by one of his advisors that he owned several properties on The Palm. He replied 'oh have I how nice.'