DH and I are considering buying a resale but we have some questions...

Discussion in 'Purchasing DVC' started by DisneyFansInLINY, Jan 23, 2013.

  1. DisneyFansInLINY

    DisneyFansInLINY DIS Veteran

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    Thank you in advance. I greatly appreciate your taking the time to answer my questions. DH and I have rented DVC points a few times and really like the villas. Our family consists of myself, DH, DD (5 but will be 6 in July), and DS (1 but will be 2 in April). We have been staying in the studios but realize as the kids get older, we are going to need a 1 or 2 bedroom. We go to Disney at least once a year and always stay deluxe and like the dining plan but also have a TIW card for when we stay at the Dolphin. On our last trip, 12/23-1/1, we stayed 2 nights at BCV in a studio on rented points and 7 nights at the Dolphin in a standard hotel room with a balcony resort view using DH's employee discount (he does not work for the Dolphin but the company he works for has a discount). Our total hotel costs for that trip were: $1720.

    So this is my first question, 1) Would a DVC purchase make sense for us if DH is able to get a discount at the Dolphin and I could continue to rent points? But then of course I would have to rent one or two bedrooms or get 2 hotel rooms at the Dolphin as the kids get older.

    2) How do you check availability? Can you just go online and book online or do you have to call?

    3) Do you have to pay any additional fees when booking your stay using points? I know RCI charges $150 at time of booking and then $95 at the time of check in. Does Disney charge anything to DVC members?

    4) Do you like the RCI and II resorts when using your DVC points to book them? How does your points convert?

    5) We do not have a house but are saving for one. However, we love to travel. Is it bad to buy a timeshare before buying a house? We would be able to purchase the DVC in cash but prefer not to as we like to hold onto our money. We have high credit scores and would want to take a personal loan with a small interest rate. Good or bad idea?

    6) Are resale buyers able to purchase a discounted annual pass?

    7)I like to go to Disney at least once a year but DH does want to go to other places. Ideally, we would like to go to Disney as well as take another non-Disney vacation a year. How has owning DVC points saved you money? More specifically, has owning DVC points made it more affordable for you to travel to both Disney as well as take other vacations or have you found yourself bound to Disney?

    8) Can you sell your resale?

    9) Will GFV cause an increase in the value of DVC's? DH and I think so and that is why we want to buy before they are for sale.

    10) Is it hard to find availability at 7 months out? We are looking at BLT, BWV or BCV but want to be able to stay at other resorts.

    11) If you didn't want to go to Disney that year and rented your points to travel elsewhere. Have you lost money by having to pay maintenance fees and then the cost of the trip? Or were you able to recoup those fees and earn some money towards your trip?

    12) Do you have a spreadsheet I could see?

    13) I see that there is a year the contract is up. So if you buy BCV or BWV resale, you only have it for 29 years? Do they offer you an option to extend this?

    Ok I think that is enough questions TIA :)
     
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  3. erionm

    erionm DIS Veteran

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    2) There is an on-line reservation system or you can call Member Services.
    3) No fee to book DVC Resorts. A $95 fee to book outside of the DVC Resorts.
    6) All owners listed on the deed (direct or resale) are entitled to the member pricing on Annual Passes.
    8) Yes.
     
  4. chalee94

    chalee94 <font color=green>I thought all sand was ground up

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    it's complicated - for the most part, 160 pts gets you a 1BR and 270 pts for a 2BR (depending on availability).

    right now DVC owners can only trade for RCI resorts. it used to be connected to II and might change back, but for now, no trades for II resorts like most of the marriotts or westins.

    if you trade out for a 2BR with RCI, you will most likely be trading your DVC pts for a timeshare that cost $1 on ebay with annual dues roughly half of DVC's...so i wouldn't consider that a good plan for the most part.

    IMO - bad idea. pay cash for your vacations until you get more settled. DVC will still be there (and resales will likely be cheaper). opinions vary.

    yes. but perks like that can change at any time, for BOTH resale and direct buyers.

    i use DVC pts for DVC resorts only. i bought one of the aforementioned $1 timeshares with dirt-cheap annual dues for trading for other places.

    i really, really don't think so.

    it varies. the easiest way to use DVC is to buy where you want to stay and book there at 10-11 months out. you can typically trade out at 7 months but certain options are tougher to get (BCV is smaller...and cheaper standard rooms at BLT and BWV can be tougher to trade for).

    i would at least recommend buying where you wouldn't mind ending up. (as booking patterns do change over time.)
     
  5. Deb & Bill

    Deb & Bill DVC-Trivia Contest, Apr-2006: Honorable Mention

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    I agree about the house. Get a house first, take care of all your needs before you spend money on your wants.
     
  6. ELMC

    ELMC DIS Veteran

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    With all due respect, I think the answers to the other questions are moot because of this one very important question you asked. Buy the house first. When you go for a mortgage, having this timeshare will be a double whammy against you. First off, any money you put into it will be less you have for a down payment. Second, if you do finance, the monthly payment will count towards your debt:income ratio which could lead to problems in obtaining a mortgage approval in these tight lending times. DVC will still be here when you're ready, and if projections are accurate, it will cost less than it does now.
     
  7. Disworldluv

    Disworldluv DIS Veteran

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    Very SOUND advice. He speaks the truth!!
     
  8. DisneyFansInLINY

    DisneyFansInLINY DIS Veteran

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    As much as I appreciate your input, I just wanted to make it clear that we do not need a house; but rather want one. We live in a huge apartment in DH's parent's house. But if we really wanted a house, we could go out and buy one with the money we have saved. However, we want our dream house and DH's parents are kind enough to allow us to live here pretty much rent free so that we can save. We travel no matter what and so basically we wanted to know if buying DVC would save us money when we travel. Because with or without a house, we are going to travel.
     
  9. DisneyFansInLINY

    DisneyFansInLINY DIS Veteran

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    We plan to pay off the debt in 3 years and not 10. And we aren't putting a down payment on a house. We are planning to pay the house in cash.
     
  10. Jasonkat

    Jasonkat Mouseketeer

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    1) Would a DVC purchase make sense for us if DH is able to get a discount at the Dolphin and I could continue to rent points? But then of course I would have to rent one or two bedrooms or get 2 hotel rooms at the Dolphin as the kids get older.

    Buying DVC is profitable over renting points but only over a long time horizon. I think the break even vs renting is like 15 years whereas rack rate with a 30% discount is more like 8 years. If you are going to go to WDW for the next 15 years and you will be staying in Deluxe accommodations then DVC makes sense. If either of those aren't guarantees DVC makes less sense.


    5) We do not have a house but are saving for one. However, we love to travel. Is it bad to buy a timeshare before buying a house? We would be able to purchase the DVC in cash but prefer not to as we like to hold onto our money. We have high credit scores and would want to take a personal loan with a small interest rate. Good or bad idea?

    According to the National Association of Realtors there has never been a better time to buy a house!

    On a serious note, I'll disagree with everyone else who gave the "no" answer. I think that's just the automatic answer to this type of question. Instead I'll say "It depends". What does it depend on? A lot of things. How much do you need to save for a downpayment + closing costs to get into a house? How close are you to achieving this total? If you live in a cheap area and you'll only need $50,000 then I'd say that you should buy a house, first. If you live in the NYC area, like me, then you'll need like $130,000 for downpayment + closing to get even a small 2 bedroom condo, then the question is how close are you to getting that much? If you are still $60 or $70k away from your goal I'd say go ahead and buy DVC now. Real estate prices fluctuate and if you need $150k to buy a place today maybe you'll only need $130k in 6 months. Who really knows what will happen in the future? Do you need a house soon (a baby on the way?) If so, save for the house first. Would you like a house in the future, but you don't need one in the next two years? Then DVC first.

    6) Are resale buyers able to purchase a discounted annual pass?

    Yeppers

    7)I like to go to Disney at least once a year but DH does want to go to other places. Ideally, we would like to go to Disney as well as take another non-Disney vacation a year. How has owning DVC points saved you money? More specifically, has owning DVC points made it more affordable for you to travel to both Disney as well as take other vacations or have you found yourself bound to Disney?

    I'd say this depends on the number of points you buy. If you buy a lot of points you'll feel "forced" to go to Disney because you have to use your points. If you buy a low number of points it should be easy to go somewhere else. DVC will save you money after you pay the initial purchase fee.

    8) Can you sell your resale?

    Yes and many people do.

    9) Will GFV cause an increase in the value of DVC's? DH and I think so and that is why we want to buy before they are for sale.

    I doubt it. People speculate on the cost for Grand Floridian but if it does come in at $200 per point you are talking about a completely different market demographic than the people buying SSR resales at $55 per point. I expect GF to have no impact on DVC values, except, possibly, causing a small decease in Bay Lake Tower since BLT's claim to be the only DVC on the monorail loop would be gone. But again at $200 pt for GFV vs $90 pt resale BLT I don't expect to see much of a change.

    10) Is it hard to find availability at 7 months out? We are looking at BLT, BWV or BCV but want to be able to stay at other resorts.

    Buy where you want to stay.

    11) If you didn't want to go to Disney that year and rented your points to travel elsewhere. Have you lost money by having to pay maintenance fees and then the cost of the trip? Or were you able to recoup those fees and earn some money towards your trip?

    There are website who will pay you $10 per point to rent them out to others. You will make a profit of about $5 per point after you pay your dues when you rent your points.

    12) Do you have a spreadsheet I could see?

    I'll show you mine if you show me yours.

    I think I saw one on Mousesavers.com in their DVC section.

    http://www.mousesavers.com/other-disney-vacations/disney-vacation-club/

    13) I see that there is a year the contract is up. So if you buy BCV or BWV resale, you only have it for 29 years? Do they offer you an option to extend this?

    Maybe they will but we don't know for sure. Look at it this way: after 29 years you get to walk away without owing any more dues. Do you really know what your life will be like 29 years from now? This is as much a positive to buying DVC as a negative. We all know a specific date when we will stop owing Disney money.

    People are out there on Ebay right now offering their timeshare at $0. They don't want to make money from their sale they just need someone to take over the fees. With DVC we will never be in that position.
     
  11. DizBub

    DizBub Totally Addicted

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    #5 We also had the cash to buy our DVC outright but wanted to hold on to our money. We did get a personal loan at 4.24% and have since refinanced at 2.24%. I know that's not popular here but it's how we did it. Our home is fully paid for and other than our monthly bills DVC is our only debt. I call it our car payment.

    #6 Yes, resale buyers can get the discounted annual pass.

    #7 We go other places but we do go to Disney more often since we have the points, APs and TIW. It feels like it's "free" compared to our other travels. I know that's not true. ;)

    #10 If you are wanting to stay at BLT, BWV or BCV you really should own there and book as early as possible. We own at BLT and BCV and can't get into either for a week unless I book at 11 months.

    #13 The only time they have offered an extention was on OKW and it didn't go well. Not certain if or when they will offer another.

    It sounds like you are a prime candidate for DVC ownership especially if you know you're coming back yearly and you need larger rooms. Only you can determine what you can or cannot afford. Don't forget to factor in the yearly dues.

    Good luck with your decision!
     
  12. DisneyFansInLINY

    DisneyFansInLINY DIS Veteran

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    Thank you so much. Yes, we live on Long Island. Houses here aren't like the rest of the country. $300,000 buys you a box with $10,000 taxes! And we could buy that box, but we want the mini mansion ;) So we aren't ready to buy anytime soon.
     
  13. Brian Noble

    Brian Noble His Curmudgeonly Highness

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    My advice: before starting to buy luxuries (and DVC is a luxury) establish yourself independently first. What happens if DH and your in-laws have a falling out? I know that's hard to imagine now, but such things do happen.

    I imagine this advice will fall on deaf ears, but you asked for advice.
     
  14. DisneyFansInLINY

    DisneyFansInLINY DIS Veteran

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    We are on a 5 year plan for the house. And that couldn't happen for a very important but personal reason. Thank you though. And I honestly have no idea how this thread became all about buying a house. I feel like homeowners think they are better than non homeowners. You do not know my situation. You do not know the circumstances. And yet you are judging me for wanting to buy a timeshare before we commit to buying a home. We almost did buy a home a few years ago but the deal fell threw. But it worked out as I lost my job shortly after. I have been a stay at home mom ever since. DH is the sole provider for us. The houses here are not like the houses in other parts of the country. We don't want to pay a lot of money for a box. We want to pay a lot of money for our dream home. My inlaws gave us the opportunity to save for that dream home. We can afford to to buy DVC right now as well as a box for a home. We don't want to do that. So why is it a problem that we buy DVC and save for our dream home at the same time? As we travel no matter what. We just wanted to know if buying DVC would save us money when we travel. Because that is what we do; save money for our dream home.
     
  15. Jasonkat

    Jasonkat Mouseketeer

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    Buying a house will always be a hot topic with people defending home ownership till their death because of the emotion they feel plus the fact that home ownership has been sold to the middle class as The American Dream: sold to us by politicians (remember Bush's 'ownership society'?), real estate agents and home builders.

    Lots of advice you'll see on Yahoo! Finance will tell you that you NEED to buy a house, etc.

    How good was that advice if you'd followed it in 2006?

    You don't NEED to buy a house. You NEED a roof over your head. Whether your monthly payment is to a bank for a mortgage or to a landlord who you rent from doesn't really matter too much.

    A home/condo purchase costs a lot of money in fees to mortgage lenders, real estate agents, etc. It's estimated that 10% of the cost is for fees (on both buying and selling). You mentioned $300,000...so is it worth $30,000 to buy something you don't want just because "society" tells you you're some sort of a loser if you don't own a place? Not to me it's not. I think people should wait and buy when they are ready and they've found EXACTLY what they want. This is where you're going to live for a long time, take the time and do it right. Why settle for something you don't love?

    Full disclosure: I own a condo. But that's because I bought it in 2009 after the prices crashed and it was cheaper for me to buy than rent over a long time horizon. If it had been cheaper to rent then to buy I'd still be a renter.
     
  16. DougEMG

    DougEMG DIS Veteran

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    DVC can save you money, it can also give you better accomdations for the same money or it can cost you more money because you end up doing more trips. All are possible, it is your choice. Just be warned that most owners end up spending more because we do more trips. Remember you still have transportation, tickets, food and souviners to spend money on for each trip.

    Since you have already rented, you know what those costs are going to be. Compare that to where the break even point is on owning and see if you are comfortable with that.

    As an example:

    Right now you can rent for say $11/point, $12/point if you want BLT, BCV or BWV with the 11 month booking advantage.

    Lets take BWV, buying resale you will pay at least $65 per point ($/point, closing, MF, etc) and current maintenance fees of $5.84 per year (MF will increase annually). So lets use $6.5 per point MF as an average for BWV for the next 10 years (which is actually a little on the low side).

    Take that rental costs of $12/point - $6.5 MF = $5.5 per point is what you are paying above MF each year. So you would be saving $5.5 per point each year which could go towards paying for your purchase.

    Divide $65 per point purchase cost / $5.5 = 11.8 years before you have broken even as compared to renting. Note that I'm assuming you are paying cash with no financing and I'm also assuming no lost opportunity costs on your initial purchase (makes the math easy).

    After your break even point the costs of owning compared to renting drops considerably.

    Now these numbers can change a lot depending on the price you pay for the contract, who pays closing and MF and how many banked points the contract comes with. Or if you buy direct, they really really change a lot.
     
  17. ELMC

    ELMC DIS Veteran

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    The reason why this thread became about buying a house is because you asked the question. Granted, you asked a lot of other questions as well, but the answers to those are more straightforward. So the thread went in really the only direction it could go. Sorry if that wasn't to your liking.

    I don't think anybody is judging here. And you bring up a good point, we don't know your situation. So when you asked a basic question about what to buy first, a timeshare or a home that you were saving for, you got honest opinions that quite frankly apply to the majority of the people out there. Your situation is clearly different because your lack of home ownership is by choice and not lack of resources. So now it's on you to decide what to do with those opinions. If you think they're valid, then maybe they should shape your decision making process going forward. If you think that they don't apply to you, then you will probably ignore them as you proceed. But I don't think it does anyone any good to get upset or to criticize people for their opinions that reflect how they honestly feel.

    That being said, if you have that much cash saved and you want to spend some on DVC, go for it. Long term DVC will most likely save you money on your vacations. However, short term you will be in the red on that purchase for about 8 years (exactly how many years depends on a number of factors outside the scope of this conversation).

    But I'll ask you this question. If you have $300,000 saved up for a house that you intend to buy in cash, and this house is going to cost you, say $750,000, how is spending $15,000 now on DVC getting you closer to your goal? Again, not judging, just giving you something to think about.
     
  18. DisneyFansInLINY

    DisneyFansInLINY DIS Veteran

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    Because we are cheap but love Disney and want to travel the we way we like to without paying full price
     
  19. a742246

    a742246 And, and, and I caught a fish this big!

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    Okay getting back to topic.

    DVC will save you money in the long run. With DVC you will spend more money.
    But with a DVC you will have more control.

    In your case, It sounds like you have a plan already, I would say go for it. If you ever run into money problems you can always sell it.
    PS make sure you buy enough points to treat your inlaws (and parents) to go with you. They are good people. Resale is the way to go.
     
  20. DougEMG

    DougEMG DIS Veteran

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    If you want to stay at a DVC unit, then the short answer is that buying DVC resale will start saving you money as compared to renting DVC after about 8-10 years.

    If you hunt around for the very best deal possible (a loaded resale SSR contract) you can drive that down to 5-6 years.
     
  21. DisneyFansInLINY

    DisneyFansInLINY DIS Veteran

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    Thank you. I know the expenses of Disney. I have been going since I was in my mom's belly and every year since then. My inlaws never want to go. We always ask but they don't like to travel. And my parents have a 5 bedroom 3 bathroom vacation home in Kissimmee. Whenever we ask them if they want to stay on property, they tell us, "What for?" We have even offered to pay for the room and they still decline as they remind us of their house. We could stay at their house even when they are not there, but we don't like having to drive so much on vacation as DH has a far commute. We like waking up and walking to a park. DH hates the buses.
     

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