Looking at ReSale Market Question

[midibach]

Hey All,

I have been looking into purchasing points on the resale market and needed a little advice if anyone could help. I started looking a DVC a little harder after visiting Aulani last weekend and chatting to one of their reps there (yeah we got the whole tour and sell job, etc.)

After some mad scientist spread-sheeting and research I’m at a point where I am considering purchasing Vero Beach on the resale market. My reasons so far are the following:

1) I can get 3 times the points compared to purchasing new (or compared to resale Grand Californian ($115) which would be my first choice on the resale market living in SoCal)

2) I am not as fussed having the higher yearly dues (about $7.5 a point @ Vero) each year as I plan to sell back the points as we grow out of our Disney phase (maybe  ). This mitigates the long term effect of this cost. I assume this higher yearly is a major contributing factor for the points being so cheap at Vero.

3) I have no real interest of actually staying at Vero (probably another reason the points are cheap). I know this limits me to the 7 month windows. However, the nature of what I do for a living gives me a lot of flexibility on when I can take a vacation, so I assume this would mitigate these issues? I know we like Aulani and Grand California the most.

4) My spreadsheets quickly uncovered buying new points is a bad choice. All “privileges” they remove from second hand buyers do not make any financial sense at all.

5) We tend to drop a lot of money on our vacations, pay for other family members, etc. So having 500 – 1000 points (on the cheap) would be a plus. The relatively high dues would be much less compared to dropping that in the regular upscale Disney market.

Looking for any advice here from the DVC vets. Don’t want to make a bad decision.

 

[Jasonkat]

3) I have no real interest of actually staying at Vero (probably another reason the points are cheap). I know this limits me to the 7 month windows. However, the nature of what I do for a living gives me a lot of flexibility on when I can take a vacation, so I assume this would mitigate these issues? I know we like Aulani and Grand California the most.

So what will you do when Aulani and Grand Californian are always full at 7 months? Grand Californian only has like 48 units. It has reputation of having the worst availability of all the DVC resorts. Aulani has 700 so you'll probably be OK there, but Grand Californian at 7 months seems like a stretch.

What will you do when Disney changes the rules and you are only allowed to stay at your home resort?

If you want to go to Aulani or Grand Californian, then buy at Aulani or Grand Californian. If you buy Vero Beach you will be GREATLY disappointed in a couple years.

 

[ELMC]

Hey All,

I have been looking into purchasing points on the resale market and needed a little advice if anyone could help. I started looking a DVC a little harder after visiting Aulani last weekend and chatting to one of their reps there (yeah we got the whole tour and sell job, etc.)

Great post. Some of your ideas are spot on and some are a little off the mark. I'll reply to each one individually.

After some mad scientist spread-sheeting and research I’m at a point where I am considering purchasing Vero Beach on the resale market. My reasons so far are the following:

1) I can get 3 times the points compared to purchasing new (or compared to resale Grand Californian ($115) which would be my first choice on the resale market living in SoCal)

Yes, this is true. On the surface, the lower buy in cost does make VB attractive compared to buying direct. But as you'll see, there are other, more attractive options.

2) I am not as fussed having the higher yearly dues (about $7.5 a point @ Vero) each year as I plan to sell back the points as we grow out of our Disney phase (maybe  ). This mitigates the long term effect of this cost. I assume this higher yearly is a major contributing factor for the points being so cheap at Vero.

In my opinion you are taking this difference too lightly. The difference is significant and will quickly erode any savings you realize on your purchase price. Also, dues increases are compounding, so the gap between VB and SSR (for example) will widen each and every year. I would also not count on being able to sell a VB contract as a viable exit strategy. VB is the one contract where maintenance fees and projected point rental prices will be so close that the long term resale market for VB is not a definite.

3) I have no real interest of actually staying at Vero (probably another reason the points are cheap). I know this limits me to the 7 month windows. However, the nature of what I do for a living gives me a lot of flexibility on when I can take a vacation, so I assume this would mitigate these issues? I know we like Aulani and Grand California the most.

To be blunt, if you don't plan on staying at VB then you shouldn't buy there. If you want to play the 7 month game, at least buy an on property resort so you can make a reservation before the 7 month window and try to move it at 7 months. If all on property resorts are booked, you are forced to go to VB or not go to Disney. It does happen. As for wanting to stay at VGC, your plan will not work at all. If you want to book at the VGC you need to own there, plain and simple.

4) My spreadsheets quickly uncovered buying new points is a bad choice. All “privileges” they remove from second hand buyers do not make any financial sense at all.

True. Run the spreadsheets again with a SSR or OKW purchase. I think you'll like what you see.

5) We tend to drop a lot of money on our vacations, pay for other family members, etc. So having 500 – 1000 points (on the cheap) would be a plus. The relatively high dues would be much less compared to dropping that in the regular upscale Disney market.

True. But I wouldn't use rack rate as your comparison as there are much better options than paying rack rate. You can reliably rent points for $11 each with NO up front purchase costs. Compare that to an up front purchase cost at VB and dues of $7.80 per point. The break even point is easily more than 10 years out. If you're looking for points "on the cheap" then OKW or SSR resale are the way to go. (Preferably SSR). Lower buy in costs plus lower maintenance fees is the key to the value.

Looking for any advice here from the DVC vets. Don’t want to make a bad decision.

That's my advice, do with it what you will. In case you got bored reading what I wrote, I'll sum it up. Don't buy VB, it won't work for your situation. Good luck!

 

[midibach]

So what will you do when Aulani and Grand Californian are always full at 7 months? Grand Californian only has like 48 units. It has reputation of having the worst availability of all the DVC resorts. Aulani has 700 so you'll probably be OK there, but Grand Californian at 7 months seems like a stretch.

What will you do when Disney changes the rules and you are only allowed to stay at your home resort?

If you want to go to Aulani or Grand Californian, then buy at Aulani or Grand Californian. If you buy Vero Beach you will be GREATLY disappointed in a couple years.

Thanks for the really good questions!

I am taking it that desirable resorts tend to get booked solid for the whole 7 months including less desirable weeks?

Also, I assume that there is no grand-fathering in for changes to Disney point policies? (or no guarantee to this?)

 

[PCMama]

Hey All,

I have been looking into purchasing points on the resale market and needed a little advice if anyone could help. I started looking a DVC a little harder after visiting Aulani last weekend and chatting to one of their reps there (yeah we got the whole tour and sell job, etc.)

After some mad scientist spread-sheeting and research I’m at a point where I am considering purchasing Vero Beach on the resale market. My reasons so far are the following:

1) I can get 3 times the points compared to purchasing new (or compared to resale Grand Californian ($115) which would be my first choice on the resale market living in SoCal)

2) I am not as fussed having the higher yearly dues (about $7.5 a point @ Vero) each year as I plan to sell back the points as we grow out of our Disney phase (maybe  ). This mitigates the long term effect of this cost. I assume this higher yearly is a major contributing factor for the points being so cheap at Vero.

3) I have no real interest of actually staying at Vero (probably another reason the points are cheap). I know this limits me to the 7 month windows. However, the nature of what I do for a living gives me a lot of flexibility on when I can take a vacation, so I assume this would mitigate these issues? I know we like Aulani and Grand California the most.

4) My spreadsheets quickly uncovered buying new points is a bad choice. All “privileges” they remove from second hand buyers do not make any financial sense at all.

5) We tend to drop a lot of money on our vacations, pay for other family members, etc. So having 500 – 1000 points (on the cheap) would be a plus. The relatively high dues would be much less compared to dropping that in the regular upscale Disney market.

Looking for any advice here from the DVC vets. Don’t want to make a bad decision.

One thing you also need to consider is a exit strategy should you ever need to sell. Vero beach is not very high demand so it may be difficult to sell off.

Aulani may be ok to get at 7 months out but vgc, especially one bedrooms and studios are more difficult.

If you really want to buy in at somewhere other than aulani or vgc, try looking at Saratoga springs for a lower price and maintenance fee, but keep in kind if rules ever change and you are,limited to your home resort only, you'll be stuck at whatever resort you buy into. I went through this myself a few months ago, wanting to buy in at ssr to stay at vgc. After researching and analyzing, I currently have a contract at Disney for rofr review at vgc. Keep in mind $115 is the asking price at some resale brokers for vgc not selling price. Check all four of the big brokers, you'll find asking prices for vgc ranging from $95-120 ppt.

 

[Breyean]

Thanks for the really good questions!

I am taking it that desirable resorts tend to get booked solid for the whole 7 months including less desirable weeks?

Also, I assume that there is no grand-fathering in for changes to Disney point policies? (or no guarantee to this?)

If you were vacationing all the time at WDW, then there are a few times of the year when it is difficult to get the exact room at the exact resort you want.

But you are looking at staying at VGC. That's one resort. With 48 rooms. That book up very very quickly. Pretty much year round.

So far there has been one imposition of restrictions on resale DVC contracts. Older resale contracts were grandfathered so they have no restrictions.

There were all kinds of speculation there were going to be new restrictions announced this week, yet nothing was.

With only one case to go by, it's hard to predict what Disney will do in the future.

 

[midibach]

That's my advice, do with it what you will. In case you got bored reading what I wrote, I'll sum it up. Don't buy VB, it won't work for your situation. Good luck!

I read the whole thing! Thank you very much for the advice it is greatly appreciated.

Considering Disney pulls all the strings and can take away all the point privileges, as well as the fact that the resorts seem to book solid for months and months, it seems my scheme is indeed not such a great one. I'm sure VB is very nice, but I don't see ourselves making it there. We have lately tended to have 1 or 2 night stays at Grand Californian about 3 or 4 times a year, but the big allure of DVC for me to begin with was the flexibility with the points and to try new resorts, etc.

Our vacations are usually spontaneous as well. We didn’t know we were going to go to Oahu last weekend until 1 week before. We typically plan at the most 2 months ahead, so we probably will just back ourselves out of DVC all together. I’m trying hard because we love Disney, but not so much to harbor buyer’s remorse for them.

 

[ELMC]

Our vacations are usually spontaneous as well. We didn’t know we were going to go to Oahu last weekend until 1 week before. We typically plan at the most 2 months ahead, so we probably will just back ourselves out of DVC all together. I’m trying hard because we love Disney, but not so much to harbor buyer’s remorse for them.

This pretty much makes you a poor candidate for DVC, especially for VGC. That being said, there are still plenty of ways to enjoy Disney without owning DVC. If you want to own a piece of the Magic might I suggest buying a stock certificate?

 

[disneynutz]

You aren't the first to consider this very same purchase strategy. If it was a great plan everyone would be doing it and they aren't.

The only way to guarantee your stay at a resort where you want, when you want is to buy there, that's the design of the system. The smaller the resort or the higher the demand for the resort, makes this even more important.

Bill

 

[PCMama]

If your vacations are spontaneous then it may be hard to get a reservation at vgc. Aulani, maybe, I was able to rent points in a standard view studio for mothers day weekend in May this past January. But that is not really spontaneous I guess. In general from what I have heard, aulani is not as crowded in January, February, May, September and October.

 

[Dean]

Hey All,

I have been looking into purchasing points on the resale market and needed a little advice if anyone could help. I started looking a DVC a little harder after visiting Aulani last weekend and chatting to one of their reps there (yeah we got the whole tour and sell job, etc.)

After some mad scientist spread-sheeting and research Im at a point where I am considering purchasing Vero Beach on the resale market. My reasons so far are the following:

1) I can get 3 times the points compared to purchasing new (or compared to resale Grand Californian ($115) which would be my first choice on the resale market living in SoCal)

If you want to mostly visit DL, you really must own there.

2) I am not as fussed having the higher yearly dues (about $7.5 a point @ Vero) each year as I plan to sell back the points as we grow out of our Disney phase (maybe J ). This mitigates the long term effect of this cost. I assume this higher yearly is a major contributing factor for the points being so cheap at Vero.

At $2 a point you will lose any savings in just a handful of years AND own something that's worth less than other options and likely decrease faster than most current options as well.

3) I have no real interest of actually staying at Vero (probably another reason the points are cheap). I know this limits me to the 7 month windows. However, the nature of what I do for a living gives me a lot of flexibility on when I can take a vacation, so I assume this would mitigate these issues? I know we like Aulani and Grand California the most.

Or consider retail for HI for the fixed week option so you can guarantee view and availability. More expensive but worth it for some.

4) My spreadsheets quickly uncovered buying new points is a bad choice. All privileges they remove from second hand buyers do not make any financial sense at all.

100% correct.

5) We tend to drop a lot of money on our vacations, pay for other fmily members, etc. So having 500  1000 points (on the cheap) would be a plus. The relatively high dues would be much less compared to dropping that in the regular upscale Disney market.

Looking for any advice here from the DVC vets. Dont want to make a bad decision.

Multiple home resorts would be a good idea for this situation, maybe some at HI and CA and the rest all at SSR or AKV or split between 2 WDW resorts.

Even resale you'll looking at $25-50K out of pocket up front with yearly dues in the range of $3-6K. Do you have to been on property? Would you consider Marriott with the Maui and Ko Olina properties in HI, Newport Coast and several top Orlando options. $50K and $6K a year would probably get you a 2 BR for a week at each one of those yearly. For a couple of thousand and much less per year you could get other timeshares that are points based including Shell, Worldmark and Wyndham. Worldmark and Shell are likely very good options for you given your location.

 

[WilsonFlyer]

Just a note in case it hasn't been mentioned.

You can't just arbitrarily decide you want to "sell off" 25 points unless you already have a contract for EXACTLY 25 points. While you can buy 10 x 100 point contracts to get a thousand, you could still only sell them off in 100 chunks.

Hope that makes sense because if your strategy is what you say it is, this is a very important point, at least it would be to me.

Only Disney can take points and make a contract a certain number. Yours are what they are when you buy them.

 

[abner1776]

I think your spreadsheet may have some "circular reference" errors in it (LOL)

Prospective DVC owners pay too much attention to the price of purchasing the points and not enough attention on the MF's. Sure, VB is cheap as compared with other DVC resorts, but why is it so cheap ??

THe initial cost of purchasing VB maybe a great deal, but it's like buying a foreclosed property for 50k less than the same house next door and then realizing too late that it needs 200k more in repairs. I am not knocking VB but simply trying to correct those "circular reference" errors in your spreadsheet !!!

If you buy VB but never stay there, you will be kicking yourself 10 years from now when the initial savings are a distant memory and you are stuck paying hundreds of $$$ more each year in MF's. I don't mind paying for something that I am enjoying but why pay the VB MF when I am staying at Aulani ?

 

[JimMIA]

Honestly, if I anticipated vacationing primarily in California and Hawaii, I wouldn't buy DVC at all.

To me, the real value of DVC is AT Walt Disney World. The other locations just don't have any unique advantages that justify the much higher price. My opinion obviously -- YMMV.

IF I wanted to get into timesharing, I would look at other timeshares which might offer many more options for pennies on the dollar.

 

[PCMama]

Honestly, if I anticipated vacationing primarily in California and Hawaii, I wouldn't buy DVC at all.

To me, the real value of DVC is AT Walt Disney World. The other locations just don't have any unique advantages that justify the much higher price. My opinion obviously -- YMMV.

IF I wanted to get into timesharing, I would look at other timeshares which might offer many more options for pennies on the dollar.

The thing is if you go primarly to disneyland (for us Disneyworld is a good 12 hour plane ride) you are either stuck paying $300-400+ a night at one of three Disney hotels or staying off property at the overpriced motels. Renting points for vgc while not impossible is not easy but for a 1 br at $13 a point can reach $3k plus a week. For us, its not so much a value, but buying into a certain quality of a vacation.

 

[DougEMG]

Honestly, if I anticipated vacationing primarily in California and Hawaii, I wouldn't buy DVC at all.

To me, the real value of DVC is AT Walt Disney World. The other locations just don't have any unique advantages that justify the much higher price. My opinion obviously -- YMMV.

IF I wanted to get into timesharing, I would look at other timeshares which might offer many more options for pennies on the dollar.

I'm with you here, DVC works best for going to WDW.

DL just doesn't have enough rooms to make it easy enough to get into.

 

[Dean]

The thing is if you go primarly to disneyland (for us Disneyworld is a good 12 hour plane ride) you are either stuck paying $300-400+ a night at one of three Disney hotels or staying off property at the overpriced motels. Renting points for vgc while not impossible is not easy but for a 1 br at $13 a point can reach $3k plus a week. For us, its not so much a value, but buying into a certain quality of a vacation.

If owning at DL guaranteed access, I'd agree with you, but it doesn't. Therefore I think your thought is only applicable to those that truly can and do plan ahead at the 11 month window.

 

[JimMIA]

The thing is if you go primarly to disneyland (for us Disneyworld is a good 12 hour plane ride) you are either stuck paying $300-400+ a night at one of three Disney hotels or staying off property at the overpriced motels. Renting points for vgc while not impossible is not easy but for a 1 br at $13 a point can reach $3k plus a week. For us, its not so much a value, but buying into a certain quality of a vacation.

Right, but read Dean's post on the first page. There are many other options. The three Dean mentioned (Shell, Worldmark, and Wyndham) are all owned by Wyndham and can be bought for next to nothing on eBay and elsewhere.

Wyndham, for example, has EIGHT resorts in California, including two in Anaheim, and ELEVEN in Hawaii. (That's Wyndham alone, not counting Shell or Worldmark)

OP says they'd like to have 500-1,000 DVC points. We paid less than $2,000 including all closing and transfer costs for roughly the equivalent of 600-700 DVC points in Wyndham. Our annual MF's are about $2,200.

There are lots of options besides DVC and paying rack rates for hotel rooms.

 

[PCMama]

Right, but read Dean's post on the first page. There are many other options. The three Dean mentioned (Shell, Worldmark, and Wyndham) are all owned by Wyndham and can be bought for next to nothing on eBay and elsewhere.

Wyndham, for example, has EIGHT resorts in California, including two in Anaheim, and ELEVEN in Hawaii. (That's Wyndham alone, not counting Shell or Worldmark)

OP says they'd like to have 500-1,000 DVC points. We paid less than $2,000 including all closing and transfer costs for roughly the equivalent of 600-700 DVC points in Wyndham. Our annual MF's are about $2,200.

There are lots of options besides DVC and paying rack rates for hotel rooms.

I agree there are other options I'm a worldmark and Marriott owner myself, but nothing beats staying on property even I. DL, and there is no wyndham or worldmark at ko Olina, though I agree one could trade into ko Olina. I guess its what the op wants, an inexpensive place to stay, or Disney.

 

[JimMIA]

I agree there are other options I'm a worldmark and Marriott owner myself, but nothing beats staying on property even I. DL, and there is no wyndham or worldmark at ko Olina, though I agree one could trade into ko Olina. I guess its what the op wants, an inexpensive place to stay, or Disney.

And where they want to stay. I certainly agree with the onsite benefits at WDW. DL, less so.

But if I were going to Hawaii, the island of Oahu would be my last choice. And on Oahu, Ko Olina would be my last choice. Even if I could stay at Aulani, I'd rather stay at either of the Wyndhams at Waikiki.

(But realistically, I wouldn't go to Oahu at all -- I'd MUCH rather be on Kauii, Maui, or the Big Island.)