Has anyone regretted becoming a DVC member?

[DisitDisitgood]

I bought bc I have a decent amount of spare cash and I always lose money in the stock market without fail. I'm too scared of the stock market, especially right now.

I also cringe when I have paid Disney cash rates ($350-550/night pre tax). When we did cash it was always a brief 3-5 days. We only stayed at certain resorts.

So, I bought dvc resale. Surprisingly, both my properties are currently worth more than our original purchase price by $10-20pp.

It's always right for some people, and you got in at time you saw timeshare values rise, very rare indeed! Congrats on being frugal and making a cash purchase.

I unfortunately don't think most people are like you.

 

[nalajms]

Again DVC makes sense in some circumstances, very limited ones. Just weigh that decision carefully, make sure you can pay cash, and as always consult a financial planner before buying. Remember this isn't an investment, there are costs to selling, and large fees with buying.

That's crazy! Do people really do that? I don't even have a FP, we do all our investing on our own with discount brokerages. Maybe I'm just not in a high enough tax bracket to need a FP. Do you consult a FP when you are about to buy a new car? I'd equate a 160pt resale contract to buying a Toyota Corolla. Maintenance fee/taxes are about the same every year. Except after 10+yrs, that Corolla's going to cost me a lot more than my DVC.

I bought bc I have a decent amount of spare cash and I always lose money in the stock market without fail.

That's exactly what my mom said when we added on in 2012! Her exact words were "I'm not making any return on this cash, why not buy DVC".

 

[chalee94]

It is both limited supply and the ROFR. The ROFR creates a floor and costs Disney very little relative to cash flow.

http://disboards.com/threads/okw-for-approx-52-per-point-at-_______.3389587/#post-53252699

doesn't sound like much of a floor. maybe the seller could have held out for more money but ultimately, they would have had to sell for what a buyer was willing to pay. if it's low, then maybe DVC gets a deal but the seller gets the same money either way.

In this case though there is a limit since Disney nearly always executes its ROFR.

this is not true now and it was completely untrue back around 2008 when DVC didn't ROFR much of anything for a couple of years (maybe a handful of BCV contracts). some OKW contracts got through at around $25 per pt. disney had zero interest in "protecting timeshare value" and recognized the recession faster than most, dropping out of the market rather than getting stuck with inventory they could not quickly turn around. (i'm sure their hotel occupancy rates weren't so great either.)

 

[skier_pete]

Yeah, the most likely truth is that DVC (like many luxuries) will swing with the economy. I would expect should we see another economic recession this will increase supply and reduce demand which will drop the prices. When, how long, and how much is anyone's guess, but it's a smart bet these contract value WILL drop at some point.

 

[Dean]

I think the interesting thing about DVC is how much resales cost. From what I've read many timeshares retain little value in the resale market, yet DVC contracts seem to retain value. I could sell my resale that I bought just under 2 years ago for more than I paid and probably break even after the broker's commission, so that suggests to me that the marketplace values the product.
As for me, I agonized for years over buying (anti timeshare bias) but once I did I've had no regrets.

There are many timeshares that hold their value and even more that don't. Timeshares are not a mainstream product and as such, market forces aren't very defined. They act much like unusual collectibles. Disney brings their product more into main stream because they're Disney. The way to think about it is what if the parks closed.

It is both limited supply and the ROFR. The ROFR creates a floor and costs Disney very little relative to cash flow. All it does is add rooms back into the general stock of Disney rooms and since Disney has one of the most efficient reservation and hotel room pricing systems in the world it's not much of cost to Disney itself.

Disney doesn't care about resale value, they'd actually be the happiest if one couldn't sell what they owned. What they want is the perception of the ability to sell simply as it applies as a marketing tool to aid in retail sales. ROFR does create a floor only to the extend DVD exercises the buy back. Historically I'd say it's about 50/50 the times where ROFR has had an impact on the resale prices and the times it has had no effect.

 

[DisitDisitgood]

http://disboards.com/threads/okw-for-approx-52-per-point-at-_______.3389587/#post-53252699

doesn't sound like much of a floor. maybe the seller could have held out for more money but ultimately, they would have had to sell for what a buyer was willing to pay. if it's low, then maybe DVC gets a deal but the seller gets the same money either way.



this is not true now and it was completely untrue back around 2008 when DVC didn't ROFR much of anything for a couple of years (maybe a handful of BCV contracts). some OKW contracts got through at around $25 per pt. disney had zero interest in "protecting timeshare value" and recognized the recession faster than most, dropping out of the market rather than getting stuck with inventory they could not quickly turn around. (i'm sure their hotel occupancy rates weren't so great either.)

There is a floor, the issue becomes one of ROI on cash and cash availability. Disney didn't execute ROFRs during the financial crisis (in 2008) because like every business it was cash constrained. Ironically borrowing costs for firms went up even as interest rates went down normally this shouldn't happen. There were some very strange things going on in 2008. A better indication is likely to be all the Disney ROFR activity both before and since 2008 in which Disney clearly enforces a floor. That doesn't mean there is no variation.

 

[DisitDisitgood]

There are many timeshares that hold their value and even more that don't. Timeshares are not a mainstream product and as such, market forces aren't very defined. They act much like unusual collectibles. Disney brings their product more into main stream because they're Disney. The way to think about it is what if the parks closed.

Disney doesn't care about resale value, they'd actually be the happiest if one couldn't sell what they owned. What they want is the perception of the ability to sell simply as it applies as a marketing tool to aid in retail sales. ROFR does create a floor only to the extend DVD exercises the buy back. Historically I'd say it's about 50/50 the times where ROFR has had an impact on the resale prices and the times it has had no effect.

Disney cares very much about resales and their value. In any industry resales are highly correlated to future demand and pricing. In fact they indicated both pent up demand, marginal demand, and expected value. They're terribly important in pricing, particularly for anything that has a finite and clearly defined expiration date, like hotel rooms, i.e. you cannot rent the 3/1/15 VGF room on 3/2/15. In fact they're most valuable in setting future prices which in this case are those "points charts". Let me ask you, do you really think those charts just happen to change randomly? Answer: No.

Seriously, we're talking about BILLIONS of dollars here, and you think Disney "doesn't care". Really?

BTW current owners not being to sell what they owned would be a nightmare, very bad for business.

 

[DisitDisitgood]

That's crazy! Do people really do that? I don't even have a FP, we do all our investing on our own with discount brokerages. Maybe I'm just not in a high enough tax bracket to need a FP. Do you consult a FP when you are about to buy a new car? I'd equate a 160pt resale contract to buying a Toyota Corolla. Maintenance fee/taxes are about the same every year. Except after 10+yrs, that Corolla's going to cost me a lot more than my DVC.

That's exactly what my mom said when we added on in 2012! Her exact words were "I'm not making any return on this cash, why not buy DVC".

Seriously, your mom couldn't find ANYWHERE on Earth that does better than a negative return? No, that is not what happened, what happened is she wanted people to have fun and was willing to pay for it. Mentally she may have justified it but let's be honest here it was not a financial decision at least not one that weighed the costs or benefits in any rational instead of emotional way. Which is perfectly OK, there's nothing wrong with that at all. But it's different than weighing your options and making a financially prudent decision.

I do find it deeply disturbing that people think spending an entire half year of their salary on a car, DVC, or anything else is just like popping out to the 7-11 and buying a coke and some chips. You're talking about making decisions involving thousands upon thousands of dollars without consulting someone who knows anything about the process, the risks, or the true options.

And to answer your question, yes absolutely. When I spend $28,000 on a Toyota Camry with a five year loan that costs me another $4,000 I will be darn certain to check with and talk to a professional.

Financial planners are not and should not be expensive, if they are they are likely going to rip you off. Like a good Dr. they are hard to find but valuable when you get a good one.

A regular Joe Sixpack like me gets more out of a financial planner than a millionaire, the millionaire is already rich and I'm just working on it. So I want all the help I can get!

 

[suebeelin]

No, I couldn't find anywhere to put my cash. I have no debt. Nada. Zilch. Zero. Except grad school stafford loans at 2%... Which I guess I could pay off. Then there's interest rates at 0.75%.

I'll do stock market when it tanks if it ever does again. For now, my cash is doing nothing for me.

I just calculated my two timeshares roi:

1. BWV 200pts- renting for 9 yrs before breaking even. Or, staying on property for 7 years (assuming the cost of a hotel room is $400/night) in much nicer accommodations. I have 25+ more years with BWV.

2. BLT 200pts: renting for 11 years before breaking even. Or, staying in property for 7 years (assuming the cost of a hotel room is $500/night) in much nicer accommodations. I have 45 more years with BLT.

So even if the resale market tanks, if the price of the hotel stays the same-- and the rental prices for points remain the same ($13/pt), I still feel like my purchases are on the upside.

We were gonna go to Disney anyway on a yearly or every other year basis and pay $400-500/night. The cash we have on hand is better invested in dvc. This makes sense for us.

And no, I don't trust financial planners. My younger sister was well on her way to getting her license, working for Morgan Stanley, almost 20 yrs ago. She said she was expected to push products... Life insurance, etc... Which she got a big cut (30%). Suffice it to say, she left the program after a year and got her doctorate in a science/medical oriented field. She's much happier, and only recommends life insurance and disability if you have kids. And even then, be careful the company you insure with. Many are not quite ethical.

 

[chalee94]

There is a floor, the issue becomes one of ROI on cash and cash availability.

did you see the thread i linked? ROFR cannot enforce a floor. if you are offered $20 less than your supposed ROFR floor, you can hold onto your contract or you can take the lower price (which you will if desperate or forced to do so by divorce or court action), but disney will not offer you (the seller) the amount you expect as a "floor." disney can take the deal but you have to find a bona fide buyer first...and if your only offers are from buyers who are willing to test ROFR, then that is all that you will get, even if disney were ROFRing every single contract under your floor price.

that's the actual process. if it makes you happy to think disney cares about you and wants to prop up the resale value of your contract, feel free. but the history and reality of the process says that you will wind up disappointed.

 

[nalajms]

No, I couldn't find anywhere to put my cash. I have no debt. Nada. Zilch. Zero. Except grad school stafford loans at 2%... Which I guess I could pay off. Then there's interest rates at 0.75%.

That was my mom! except grad school loans, she paid those off 50 years ago! She pulled out 15k from her "vacation" money that had been sitting in savings for 3+ years. She lost a bit in the tech bubble and refused to buy stocks or mutual funds. Refused TBills when I suggested them. Refused the low interest rates on money market and CDs. Luckily I had been monitoring the resale market for a few years and when the resale prices bottomed out and started to rise, I bought for her.

I think $400-$500 is too high for an estimate. During "peak DVC" season, you can usually get 25-35% off rack rate. Of course, if you go in the peak summer season or Christmas/Easter, there's less discounts.

I assume DisitDisitgood is referring to a different kind of FP? I've met some MS people years ago and the clientele they target had to have a min 250k in cash!

 

[suebeelin]

Hmmm how much is boardwalk and contemporary on the cheap end? When we first went to boardwalk at a conference rate it was $350 plus tax, so almost $400... No dining plan. The conference rate was supposedly cheaper.

Just wanted to run some calculations.

Yah, I lost my shirt during the tech bust. But luckily I have a decent income which means no debt.

 

[Dean]

Disney cares very much about resales and their value. In any industry resales are highly correlated to future demand and pricing. In fact they indicated both pent up demand, marginal demand, and expected value. They're terribly important in pricing, particularly for anything that has a finite and clearly defined expiration date, like hotel rooms, i.e. you cannot rent the 3/1/15 VGF room on 3/2/15. In fact they're most valuable in setting future prices which in this case are those "points charts". Let me ask you, do you really think those charts just happen to change randomly? Answer: No.

Seriously, we're talking about BILLIONS of dollars here, and you think Disney "doesn't care". Really?

BTW current owners not being to sell what they owned would be a nightmare, very bad for business.

For timeshares there is a lot less correlation, almost none at all. Those companies where you can get a timeshare for free are still able to sell timeshares consistently. Resales represent competition for DVD, not the mark of a healthy system. DVD's ideal circumstance would be for people to not be able to sell ever but for people to think they could when buying for those few that actually even thought about the issue. Let me put it another way, they care about selling, not about the prices per se. VERY few buyers on a % basis go look around, most buy on impulse during a sales tour and most don't rescind even when they find out about resale within the window they could cancel. The % have likely shifted over the past few yrs a little with the expansion of technology but not really that much. As a rule timeshares try to devalue resales rather than compete with them, DVC included with the advent of non qualified points in 2011 and ROFR. ROFR's main goal is to keep you guessing more than anything else. DVC's inherent value is determined mostly by the hotel prices and the park demand, if the parks were to close or the hotels took a major hit and had a major price reduction, DVC is just another timeshare one can buy for $1 on ebay.

 

[Lil' Grumpy]

really?..how can you know the disney stand unless you are working @ dvc &
holding a high position.

also...there are several issues...that clearly are not helping disney incomes ( like
rci owners that constantly trading in -for usage or renting rooms out ) ..
and yet being ignored . as an owner, that fact is implicating there are strong
conflict of interests....

and i communicated to dvc , as an owner my concerns how these conflicts are
costing me on many levels, the "worst" being stealing $ via them charging /
increasing dues ...to pay for their costs. (like utilities)

& why is it so hard to find the power people? exactly why are they so hidden
and do not answer questions....ie, owners are told "they blocked /stopped
the illegal renting from rci owners but not one time has this been documented
of being done ..and the ebay business are not slowing down. this is why i posted
'this...below, because ....those new to renting are unaware what they are
getting into...


butter,butter, jam!..people don't come here without a motivation. & trying to reduce their costs
for wdw vacations....makes a lot of sense/$ too me. however, the dvc system has an obligation
to manage the incomes they are "charging" owners....especially regarding ethics. so they are @ fault
when they are ignoring the rci situations....where my dues are paying for others. now if they/disney
deduct all the utilities /costs from these- then no problems. however, they are not. (go to the dvc
boards to learn where/how this problem/e-bay rci renters are coming from.....(again not a personal
feeling /observation)...but another "grand illustration' for true dvc owners to "pay attention"!
...an expert timeshares fella , posted about having 3/4 active trades into dvc. wonder how
many more are doing that--but!, are tired of going to wdw? also which is easier for them to rent
and get the most $ out of? i am expecting dvc to manage /step in & placed a limit of one trade
per rci per year & only one trade per contact -ever. think about it--dvc is gaining nothing by the same
rci owners doing it over & over? one even posted, they wished they didn't own their dvc
because they are getting better deals with their rci trading...if i was running dvc, that
would have motivated me toward action. and by reducing all these rci-renters ( the ones
that own many traders /and then reselling them ) ....will reduce this e-bay market. that's
should be the highest priority for dvc....because liked i pointed out- via the "laundry lady"
....it is an ethical usage, cause it isn't disney $. so yeah, i am crazy like that---i don't
like wasting my money.

now...the above isn't claiming the above time/shares expert..is re-renting but he could be.
however, the point is....an illustration where this market/rci renters are coming from .
as a true dvc owner , ( no other timeshares), i am expecting dvc to stop this. even if
it is just one dollar, it is still stealing.

nor is this a debate of any kind. it is a fact that dues pay for utilities. look @ what some of
these professional /experts time shares personnel working for dvc-- are leading the company
into...especially the solutions are quite easy to do. why should any rci owner be permitted to
trade more than once?

 

[Missyrose]

really?..how can you know the disney stand unless you are working @ dvc &
holding a high position.

also...there are several issues...that clearly are not helping disney incomes ( like
rci owners that constantly trading in -for usage or renting rooms out ) ..
and yet being ignored . as an owner, that fact is implicating there are strong
conflict of interests....

and i communicated to dvc , as an owner my concerns how these conflicts are
costing me on many levels, the "worst" being stealing $ via them charging /
increasing dues ...to pay for their costs. (like utilities)

& why is it so hard to find the power people? exactly why are they so hidden
and do not answer questions....ie, owners are told "they blocked /stopped
the illegal renting from rci owners but not one time has this been documented
of being done ..and the ebay business are not slowing down. this is why i posted
'this...below, because ....those new to renting are unaware what they are
getting into...


butter,butter, jam!..people don't come here without a motivation. & trying to reduce their costs
for wdw vacations....makes a lot of sense/$ too me. however, the dvc system has an obligation
to manage the incomes they are "charging" owners....especially regarding ethics. so they are @ fault
when they are ignoring the rci situations....where my dues are paying for others. now if they/disney
deduct all the utilities /costs from these- then no problems. however, they are not. (go to the dvc
boards to learn where/how this problem/e-bay rci renters are coming from.....(again not a personal
feeling /observation)...but another "grand illustration' for true dvc owners to "pay attention"!
...an expert timeshares fella , posted about having 3/4 active trades into dvc. wonder how
many more are doing that--but!, are tired of going to wdw? also which is easier for them to rent
and get the most $ out of? i am expecting dvc to manage /step in & placed a limit of one trade
per rci per year & only one trade per contact -ever. think about it--dvc is gaining nothing by the same
rci owners doing it over & over? one even posted, they wished they didn't own their dvc
because they are getting better deals with their rci trading...if i was running dvc, that
would have motivated me toward action. and by reducing all these rci-renters ( the ones
that own many traders /and then reselling them ) ....will reduce this e-bay market. that's
should be the highest priority for dvc....because liked i pointed out- via the "laundry lady"
....it is an ethical usage, cause it isn't disney $. so yeah, i am crazy like that---i don't
like wasting my money.

now...the above isn't claiming the above time/shares expert..is re-renting but he could be.
however, the point is....an illustration where this market/rci renters are coming from .
as a true dvc owner , ( no other timeshares), i am expecting dvc to stop this. even if
it is just one dollar, it is still stealing.

nor is this a debate of any kind. it is a fact that dues pay for utilities. look @ what some of
these professional /experts time shares personnel working for dvc-- are leading the company
into...especially the solutions are quite easy to do. why should any rci owner be permitted to
trade more than once?

There wouldn't be weeks for RCI if a DVC Owner hadn't used their DVC membership to trade into something in the RCI system. If "Owner A" traded their BCV points into RCI for a week in Cabo, then RCI Owner gets to trade into that DVC villa that Owner A gave up. If Owner A hadn't gone to Cabo, they would have used their DVC points at BCV. The villa is filled either way, your dues aren't increased because and RCI owner used that BCV villa for a week instead of Owner A. Owner A had already paid the dues on those points, the same as your points.

 

[Chuck S]

A few months ago I had banked points that would be expiring, I have never, since purchasing in 1992, lost points, and the though of it saddened me. So I did deposit those points into RCI for future use. Realizing it is likely not the best valiue for the points, I figured a future weekend on the Texas coast was better than nothin'. At that time, I would have expected DVC to release a number of nights at a DVC resort based upon those points to RCI. That is how the system works. Disney/DVC/DVD, on the retained points and unsold points still in their inventory, can use those points however they wish. They can rent them for cash reservations, deposit them to RCI, sell accommodations through travel agents, give accommodations to cast members, use them for trip giveaway promotion prizes...however they choose they ARE their points. Again, that is how the system works. I'm sorry if some owners do not understand the system based upon their documents. I have never rented out my excess points, as I usually never have any, but in either event, I would have paid the dues on those points towards the upkeep of the resort, whether I used the resort accommodations, whether I gave them to friends, or whether I rented them out...the dues and maintenance IS PAID. No, if there is damage beyond reasonable/normal wear and tear caused by friends, or renters, I would expect to be responsible for those damages...just as I would be held responsible, as the owner, if I happened to own and rent out a privately owned beach house. Nothing so far has indicated that excessive wear and tear is happening on the DVC units as the result of member rentals or RCI trades. Remember that those trading through RCI are also timeshare owners, and thus I would expect them to be pretty careful in general.

 

[carissa1970]

The only thing I regret is not getting more points!

 

[Lil' Grumpy]

sorry, I am not "buying" what your selling... it's an old argument without merit. the
way I se it.....it isn't for me, but a message to confuse dvc owners/ non rci owners.

the recent thread about a new member buying on the Disney cruise is one of the problems facing
owners...that understand the dvc system. I think most of the problems we have now,
had to do with trust...Disney needed timeshares managers dedicated toward their system,
and what we got, those to tempted by taking advantage & wanting to keep their secrets.

what I expressed, is just one area that could be improved on. if all owners took the
time & look @ the system.....let's say there are "all kinds of improvements begging
to be done." ( the ssr situation for one)

but for here....let's say, you are a dvc upper /level manager....you would have never
tolerated rci traders to be more than one. instead you would be trying for as many
as you can.....so they might buy dvc. the fact, that many other professional timeshares
proudly "stated" -- they wish they never own dvc, but instead using their cheap,
useless rci , while taking rooms that would be for other owners to switch for
......is strong evidenced how bad/shape ... our dvc ruling management is.

got to say, these boards have we taught me as an owner, things I never would have
seen on my own. then there's the e-bay market ... (that makes me anger, how many
illegal traders are being sub/rent.. & dvc has failed their owners ..for permitting
then stealing....rooms, utilities & all the other costs.)

 

[disneynutz]

The purchase price is just the tip of the ice burg, you are locking yourself into Disney vacations that will cost hundreds of thousands of dollars.

The DVC management, rule changes, policy changes, website issues, long phone times, account issues, room availability, room rehab design changes, point reconciliations, dues increases, and new resorts like the Poly studio only has more of an impact on ownership then the contract purchase price IMO.

Bill

 

[TeresaNJ]

The purchase price is just the tip of the ice burg, you are locking yourself into Disney vacations that will cost hundreds of thousands of dollars.

The DVC management, rule changes, policy changes, website issues, long phone times, account issues, room availability, room rehab design changes, point reconciliations, dues increases, and new resorts like the Poly studio only has more of an impact on ownership then the contract purchase price IMO.

Bill

Bill, are you happy with your DVC purchases? We owned two contracts, 300 VWL points and 250 BCV points. We sold both contracts last year because we wanted the cash to purchase equipment for the small hobby farm we recently bought. We're now thinking of purchasing a resale, as we do go to WDW at least once a year, and I only like staying in deluxe resorts, specifically DVC resorts. On our trip this past September, I rented points at BWV for 8 nights, then we switched over to a regular resort room at Wilderness Lodge. I hated staying in that regular room! No mini kitchen, no couch, ugh. I was unhappy. I missed my DVC studio room! After reading your input though, it makes me second guess purchasing DVC again.