Please explain the benefits of buying small contracts

[luv2sleep]

I keep reading how people buy smaller contracts and feel this is a better way to go. My WDW trips will always be 7+ night stays and unless I borrow every time I won't have enough points for one stay if i purchase less than 100 points. Why do some people purchase small contracts? How is this beneficial?

 

[Minniesgal]

We only travel once every three years so we bank and borrow to have enough points so we only need one third of the points for our trips. Of course we offset that by stay g 15 nights so our contracts are not tiny?

Also we love split stays so at a given resort I only really want enough points to stay 4 nights before moving on some where else and using points from another resort.

 

[Missyrose]

I keep reading how people buy smaller contracts and feel this is a better way to go. My WDW trips will always be 7+ night stays and unless I borrow every time I won't have enough points for one stay if i purchase less than 100 points. Why do some people purchase small contracts? How is this beneficial?

It depends on what you're buying the small contracts for. If you're buying multiple small contracts at the same resort, those small contracts will hold their value better than larger contracts, should you ever want to sell. And if you find you have too many points down the road, you can sell one of the smaller contracts to right-size your total.

If you buy a small contract at two resorts then you could book split stays each year. Or use banking and borrowing to alternate the years in which you stay at the resort (and can use two years' worth of points at that resort). So in Year 1 you use your Year 1 and borrowed eYear 2 points at BLT. And then in Year 2, you can used the banked Year 1 and Year 2 points to stay at BWV.

 

[NoleFan]

We bought a 50 point BCV contract & it is perfect for us. We are FL residents & stay in a studio 1-3 nights. We plan to use our BCV points for 2 nights during spring break & 1 night beginning of June. We would not go to BCV other times since it costs more points or is too cold to use SAB. Would not make sense for us to have a larger contract there. We would consider a smaller contract for VWL for home resort booking in December for 1-2 nights. We bought a couple months ago before prices hit the $90's for small contracts. Now, prices are too high to even consider a small add on now. We also have 100 points @ BWV for our BWV and 7 mos booking stays. BWV is better for us during F&W as std studio is 10 pts during weeks vs BCV 15 pts. I try to stretch my points with more stays.

 

[twinsouvenirs]

1) Resale value and speed. You can sell them more quickly and for a better cost because there is a higher demand for smaller amounts of add on points.

2) If you are careful/strategic and buy multiple resorts you can bank/borrow the points from each to gain the 'home court' advantage at more than one property alternating years.

3) They are easier to gift/will to multiple children, although I suspect most of us hope to outlive our contracts and #1 is the real reason.

For example, we just bought 30/30/50 of GFV. We are able to use all of those points ourselves as though they were in the same pool and bank/borrow to stay at GFV (if we are quick on the 11 mo draw) every other year at our ideal times. Then, we'll add around 100-150 at BWV hopefully which will allow us (again hopefully) to snap up BWV for a week during the food and wine festival. We'll add another 100ish points at either another desired resort or SSR for trips we can book at the 7 mo window (although my husband particularly loves the SSR theme too, but I understand it's not quite as critical to book 11 mo in advance there. So with this strategy it is POSSIBLE for us to do a holiday week at GFV one year, food and wine at epcot the next, and then another vacation somewhere else in the meantime. Then when the girls are too cool for mom & dad & mickey, we can shave off the GFV points which will still have plenty of years on them and do so hopefully fairly quickly.

 

[ELMC]

I keep reading how people buy smaller contracts and feel this is a better way to go. My WDW trips will always be 7+ night stays and unless I borrow every time I won't have enough points for one stay if i purchase less than 100 points. Why do some people purchase small contracts? How is this beneficial?

http://disboards.com/showthread.php?t=3134590

This question was answered in a thread you started, in posts 10 and 12.

 

[nalajms]

I'm sure someone has said this in other threads. Not everyone wants to finance a resale and may not have enough cash to buy a larger contract. Instead, I can look for a smaller loaded contract that will get me by for a year or 2. Then when I have more cash, I'll buy another smaller contract. It also averages out the price per point over the long run since resale prices fluctuate.

 

[automaticsoap]

I keep reading how people buy smaller contracts and feel this is a better way to go. My WDW trips will always be 7+ night stays and unless I borrow every time I won't have enough points for one stay if i purchase less than 100 points. Why do some people purchase small contracts? How is this beneficial?

People vacation differently. My trips will most likely never be more than 5 nights. I bought small contracts that give me 3-5 nights in a studio every year. I bought 2 different home resorts for 2 trips every year.

 

[RSWA2]

Point sizes fit people in different ways, depending on how they use it.

Someone who needs a 2 bedroom or GV all the time, probably would not find much use with less than 100 points. But someone who owns 100 points at AKV and will stay at a value studio, has more than enough points for a week. But 2 small contracts may cost more than 1 big contract, even with the same points)

A family may buy a minivan and it'll hold 7 people, but they may have to taxi people around. Or they can buy 2 small cars, hold 4-5 people each and may have less taxing. But 2 small cars may cost more than 1 minivan.

We own 2 small contracts, both sub 100 points. With some banking and borrowing, we have 40+ nights planned for our upcoming PAP year.

 

[KAT4DISNEY]

It depends on what you're buying the small contracts for. If you're buying multiple small contracts at the same resort, those small contracts will hold their value better than larger contracts, should you ever want to sell.
.

The part about the small contracts holding their value more is usually correct but I like to point out that there also are fixed costs when selling a contract that can virtually eat up that few extra added value dollars. After going thru it myself I really don't recommend anything less than 50 and really think 100 points is a good minimum if thinking only of resale possibilities.

There are of course other reasons for the small contracts that have been mentioned (transfer to multiple children, downsizing ease etc.) but if those aren't factors and the fact that you pay more for closing on the small contracts the value portion is minimal or 'nil. Back in the day with no closing costs it was a little different but that too has changed.

 

[DVC Mike]

1) Resale value and speed. You can sell them more quickly and for a better cost because there is a higher demand for smaller amounts of add on points.

I've sold several 25-30 point contracts very quickly and for more than the larger contracts.

 

[Dean]

I keep reading how people buy smaller contracts and feel this is a better way to go. My WDW trips will always be 7+ night stays and unless I borrow every time I won't have enough points for one stay if i purchase less than 100 points. Why do some people purchase small contracts? How is this beneficial?

It's simply an insurance policy for resale or legacy. If you have the opportunity, it's a good idea. The only downside for retail is that if you go to retitle it down the line, you have more deeds and more costs to deal with. However, resale is a whole different matter. For most people and most situations the extra cost, often $10-20 a point more, is simply not worth it. It does depend on specifics though. IF you can find multiple contracts of a single owner and get them to close as one entity with little or no extra closing, I'd say go for it. The other situation is to combine high demand higher cost points with lower cost such as 150 BLT plus 150 SSR to get to 300 total or similar. And there's no guarantee that the transfer process won't catch those of us with multiple smaller contracts and add even more cost to the process.

 

[bakerworld]

Our largest contract is 160 at AKV and personally I wouldn't go any higher than that in one venue. If we needed to sell this contract I think we'd be making close to the same $$ as the 100 point BLT contract - considering the venues. I think the reason there are so many contracts in the 200 range and over is because you are waiting for a person who wants a large contract with a large budget.

 

[luv2sleep]

Most resorts require more than 100 points for a week at peak times (we need summer and Christmas because of school). So do people with smaller contracts who need a week just borrow/bank to make their 11 month mark booked stays work? Or are smaller point contracts more appropriate for people who book at 7 months and/or only need a few nights?

 

[Deb & Bill]

Most resorts require more than 100 points for a week at peak times (we need summer and Christmas because of school). So do people with smaller contracts who need a week just borrow/bank to make their 11 month mark booked stays work? Or are smaller point contracts more appropriate for people who book at 7 months and/or only need a few nights?

We have (had) four smaller contracts. Two 100 point contracts at newer resorts preopening (just to get points to go every other year or every third year) and the other two were the same as our main contract, so we could combine those contracts. At the time, it was all we wanted to buy. We sold off two of those contracts and had a buyer the day they were offered.

 

[Missyrose]

Most resorts require more than 100 points for a week at peak times (we need summer and Christmas because of school). So do people with smaller contracts who need a week just borrow/bank to make their 11 month mark booked stays work? Or are smaller point contracts more appropriate for people who book at 7 months and/or only need a few nights?

It depends, if the person has multiple small contracts at the same resort (that function under on membership number) All those points can be pooled and used together at 11 months out.

If you're talking about having multiple small contracts at separate resorts, then you can either book split stays at 11 months or bank/borrow to use that contract every other year at 11 months out.

 

[luv2sleep]

It depends, if the person has multiple small contracts at the same resort (that function under on membership number) All those points can be pooled and used together at 11 months out.

If you're talking about having multiple small contracts at separate resorts, then you can either book split stays at 11 months or bank/borrow to use that contract every other year at 11 months out.

Thank you. That completely answers that question.