before I buy...

Discussion in 'Purchasing DVC' started by bmcd1998, Jun 6, 2013.

  1. Missyrose

    Missyrose DIS Veteran

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    The other thing to consider when talking about the value of points is that those directly bought AKV points lose about half their value once you sign on the dotted line. Resale contracts for AKV are going in the low-to-mid $60s and that's what your AKV contract would be worth today.

    Since VGF is new, it's harder to determine long-term value but it's a very small resort (so a smaller supply of points on the market) and its location (monorail resort, flagship WDW resort) make it easier to see how contracts there could hold their value better than other resorts.
     
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  3. ELMC

    ELMC DIS Veteran

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    First off, great questions. I have some thoughts. I say what I'm about to say not to shock you, or be insulting, but to help you. Are you ready?

    Everything about this deal sounds horrible to me. Let me explain...

    Right now there are significant incentives for AKV points. I'm not sure what the "small discount" is for the CP, but it might not even be equal to the incentives offered to the public. Can you share more about what you were offered?

    Also, contracts bought with a CM discount have heavy restrictions. You are not allowed to rent out your points and if you sell, I believe you have to sell back to Disney at a very unfavorable price. I find both of these restrictions prohibitive and they far outweigh the benefits of the discount. If there is even one year where you can't use your points, you have lost.


    This has been answered above many times, so I won't go into it other than to say that I completely agree with Jim's post on the matter.


    This also has been addressed, but I didn't see one other aspect of this mentioned. If you asked for an AUG UY or later, you technically are still in your 2012 UY. Therefore you would get the 2012 points now, 2013 points in AUG and would only have to pay prorated maintenance fees. If you give those extra points a value of $10 each, that is a $4,000 difference. In my opinion, buying a UY month that has already passed is costly and outweighs any potential benefit of having that specific UY.


    Ideally, you should probably get 2x100 and 4x50 for the purposes of "right sizing" your DVC points holding as the years go by. But the other benefit of small contracts pertains to resale ease and value. There's only one problem with that. Currently, AKV resale prices are in the $70 per point range and dropping. That means that if you went to resell any of your AKV points, after commission you would get back about half of what you paid. While this might not seem important to you now, the nature of timeshares suggests that it will be important to you in the future. Even people who think that they will never want to sell end up selling for any one of a variety of reasons.


    I understand your excitement, but I would suggest that you take a step back and take the time to research this purchase. For the money, I feel that VGF direct is a much better long term play than AKV direct. Although nothing is guaranteed, it is likely that VGF contracts will hold their value much better than AKV.

    This is definitely going to rub some people the wrong way, but I'm going to say it anyway. In my opinion, there is absolutely NO REASON that anybody should be buying AKV direct right now. If you want the value studios or the Grande Villas and you need to own at AKV, you should be buying resale. If you don't particularly care about where you stay, there are many other direct options where you would be better off. If you want to buy direct because you have to finance, then you would be better off choosing any other resort. The loss in value on an AKV contract is the highest among any of the on site DVC resorts. It's a bad deal.

    I don't know the details of your discount, but based on my best estimates, you are looking to spend about $50,000 on this contract. Virtually the exact same thing can be had on the resale market for about $24,000. There is simply nothing you can tell me about any of the options that makes up for that $26,000 difference, and I would caution you against proceeding with the purchase as you had outlined here. Good luck with whatever you decide. :)
     
  4. ELMC

    ELMC DIS Veteran

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    I disagree. I think that we have a long enough track record that we can make some very solid projections about what resales will do in the future. Unless they institute massive restrictions, there is not a lot Disney can do to suppress resale values, and the demand for their product is strong, so I don't see much that could cause resale values to tank.

    That being said, if ever there were something to happen that negatively impacts resale values, it would hurt the direct buyers more than the resale buyers simply based on the fact that they have farther to fall.
     
  5. JimMIA

    JimMIA A little Miami humor...

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    They are too point intensive. The much better strategy would be to rent your points and use those cash proceeds for DCL, etc.
    IMHO, the benefit of DVC points is for stays in DVC resorts at WDW. That's where the value is -- not DCL, ABD, the few remaining non-DVC Disney resorts, etc, etc.

    That is not unique to DVC -- throughout the timeshare world, generally whenever you use your timeshare for anything outside the main system you are getting less value. I would NOT use DVC points for any of the options retained by direct purchasers...period.

    RCI is a little better use (IMO), but I would not deposit DVC points into RCI unless I had suffered a huge unforced error and had points that were about expire with no hope of being used.

    If I wanted to vacation using RCI, I would buy a different timeshare on eBay for $1 and exchange that through RCI. Doing that, I'd have 5+ times the RCI options DVC offers, plus full individual membership in RCI.

    BUT...what if? What if I made a mistake, had expiring points that I couldn't use, and the only option was RCI?

    An RCI deposit gives you points which are extended for two years. DVC/RCI offers about 600 RCI resorts (out of 3,200+). In evaluating exchanges, you really have to use a different scale than comparing the points use to a Christmas stay at WDW. The question is NOT "Did I get the best value for my points?" The question is, "Did I get an exchange that I was satisfied with?"

    Example: Last October, I did a Wyndham/RCI exchange into a small timeshare in Cape Cod. It was nowhere near Wyndham quality in any respect. But it was clean, the staff was friendly and helpful, and it was located 2 miles from the uncle we went to visit. Was it an "even" exchange for a week at Great Smokys? Oh, heck no! But it was perfect for us, for that trip, at that time.

    Many DVC owners have gotten great vacations via DVC/RCI. It's a fool's bet to BUY DVC for that purpose, but if you mess up and end up with expiring points, you might do pretty well over the next two years.

    Yes...incorrect.

    Use year is simply that 12 month period for which points may be used for reservations. The points are actually already in your account, but you can only use them for vacations occurring during the applicable UY -- which you can manipulate with banking and borrowing.

    If you're buying sometime during a Feb 2013 UY, those points have actually been available for borrowing since Feb 2012 and for regular use since Feb 2013. Currently, they can be used for vacations up to Jan 30, 2014 or they can be banked into your 2014 UY at any time prior to September 30, 2013.

    So...if you buy within your 2013 UY year and you get an "incentive" of receiving the 2013 points, you have received an incentive of exactly nothing -- zero, zip, nada. NOthing. You just got what you paid big money for.

    And by the way...that 15% discount? I think the everyday "incentive" if you buy 160 or more points is $10. So, $145-$10 = $135. You are getting a little on top of that. I haven't done the math, but your actual "discount" is in the neighborhood of 5% off what everyone else gets.
     
  6. iluvthsgam

    iluvthsgam Mouseketeer DVC Gold

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    Note that these Ownership Interests have an expiration date. I don't think history will necessarily accurately predict the future. At some point the values will drop to $0. When that curve starts is anyone's guess. I understand that you can try to reasonably predict future prices, but I still believe there is too much at play to be confident about those guesses. Just look at the price movement we have seen from 2008-2013. In those 5 years prices have swung wildly, due to many factors. The last 6 months have seen a big jump in resale prices.

    There are certainly things Disney can do to attempt to "set" the resale market, if it chose to do so (up or down). I respectfully see where you are coming from, but I just think there is too much at play to accurately predict resales prices 5-10 years from now. At what point does the 2042 expiration come into play? 2015? 2020? 2025? 2030? 2035?
     
  7. NHTikiBeckie

    NHTikiBeckie DIS Veteran

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    ELMC makes a great point regarding the price difference of AKV resale versus direct. The point values for DCL, Adventures by Disney, etc are so high and IMO a bad value...you could easily use the money you will be saving if you buy resale (around $24000) to use towards cruises, etc. Definitely crunch the numbers there because its honestly not a great value to buy direct at AKV just to have access to those collections.
     
  8. Minniesgal

    Minniesgal DIS Veteran

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    Ask them for an August UY and you will get 2012 points as well
     
  9. bmcd1998

    bmcd1998 Always Planning Our Next Trip

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    Thanks everyone. I think you have helped me decide to hold off. Which leads me to my next question:

    What's the best way to secure resale points. Might want to buy 200-400 points. Thinking BWV if I have any choice. Any recommendations?
     
  10. ELMC

    ELMC DIS Veteran

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    Click on the banner for The Timeshare Store at the top of the page (or simply call them). It's a very good place to start when looking for a resale contract. Good luck! :)
     
  11. bdoleary

    bdoleary Mouseketeer

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    It's too bad you can't buy into VGF at a discount - that might be worth considering. AKV is a beautiful resort but as previously mentioned the current resale value is significantly below the deal that Disney is offering you and the value of the "exchange" priviledges may not give you much additional value. I'm not sure how much longer your daughters internship will last - maybe once VGF opens for sale to the public they'll offer cast members a discount as well.
     
  12. dbs1228

    dbs1228 DIS Veteran

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    Check out Timeshare store, Fidelity and also google disney vacation club resale.

    You may want to consider a few contracts equaling 400 points possibly at more then one resort. We own 285 at BLT (in 3 contracts) , 160 at SSR and looking to add on somewhere around 200 at BWV. Good luck
     

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