15 Year Extension at OKW for $25 per point

[rugrats2001]

Again, a great perspective. I look at our DVC precisely as you describe: As prepaid vacations.

I just can't understand this philosophy - how can it be considered a prepaid vacation, when you have to pay a substantial maint. fee worth more than your original membership cost just to have a room with no maid and minimal towel services? Add on the fact that the price of the room (including the fees!) is often only 30% or less (sometimes much less) of the cost of the entire vacation, and the 'prepaid vacation' may only be paying 10% - 20% of the total vacation cost.

I'm not saying DVC membership isn't a good idea - Just doesn't seem like much of a prepaid vacation.

 

[pilferk]

I just can't understand this philosophy - how can it be considered a prepaid vacation, when you have to pay a substantial maint. fee worth more than your original membership cost just to have a room with no maid and minimal towel services? Add on the fact that the price of the room (including the fees!) is often only 30% or less (sometimes much less) of the cost of the entire vacation, and the 'prepaid vacation' may only be paying 10% - 20% of the total vacation cost.

I'm not saying DVC membership isn't a good idea - Just doesn't seem like much of a prepaid vacation.

You're right. "Prepaid vacation" isn't the right wording.....rather "prepaid accomodations for your vacation". But that's arguing semantics.

You're prepaying for "tomorrows room" at today's prices, with today's dollars.

For us, our vacation costs consist of

1) tickets
2) food
3) transportation
4) room costs

Of that total, room costs was the single highest dollar amount, followed by tickets, then food, then transportation.

I have AKV points. This year, the points cost 6.54 per point ( (96/50 = 1.92) + 4.62 in dues). We're using 160 points for 6 nights. That's 1046.40 (in a 1BR...we're 5 and our options are pretty limited). We like to stay at deluxe hotels, so compare to those rates. While it's not apples to apples (we get more space...MUCH more..plus a kitchen), if you were looking at a deluxe standard room that would sleep 5...you're looking at about 1600 (259 per night + tax). About a 30% savings THIS YEAR.

Now, assuming that room rates increase at the same level dues do (so far, they've outpaced dues, but just for the sake of argument) and using the historical average of 3.12% incraese, next year we'd spend the following:

DVC: 6.69 (1.92 + (4.62 * 1.0312) per point x 160 points = 1070.40

Hotel room: 1698 (259.00 * 1.0312 + tax)

Notice the gap is widening.

That's why it's considered "prepaying for (a piece of your) vacation". You buy with the intent to USE it, not simply profit on it at a later date.

 

[icydog]

My daughter is a real estate attorney but she is not licensed in Florida. I will however fax her a copy of the letter for her opinon of the wording.

I, personally am at a loss as to what to do. I don't understand the premise for the offer or the levies to be impossed on us for non taking the offer.

We own approximately 800 OKW points and to pay that much money for a timeshare we will be unable to use seems punitive. On the other hand, I don't want to devalue the points I own now since I obviously have a large investment in them.

When I contact my daughter I will do what I can to get an answer for you for some of these questions. I am very upset with the high handed way Disney has decided to do this. It is contrary to the spirt of the Vacation Club that I joined upon inception these many years ago.

 

[Gary K. D.]

I personally will not opt for the extention...to fork over $30,000, if there is a $15.00 buy in or $50,000 if there is not, over the next 6 months is rediculous.

If I choose to stay in Disney, which with all of the compliance intervention and games with the interpretation of the rules and the changing of the rules at Disney's whim I am not sure that I will, I will sell my 2042 contracts and buy the 2057 contracts on the resale market for $5.00 over the 2042 contracts. I find it hard to believe that the new 2057 contracts will be valued @ $100.00 per point on the resale markets.

 

[Dean]

I think the ultimate question here is: What's Disney's primary intent.

Is it:

a) To get current owners to buy the extension, and maximize profit from that

or

b) To allow DISNEY to sell ROFR'd OKW points at a 2057 rate.

If a is their primary goal, you might see an additional offer made later to owners. By levying a lein on the deed, they DO have the option, down the line, of offering a greater subsidy to the $25 per point.

If b is their primary goal...they simply don't care how many owners opt in...and you'll likely NEVER see another offering again. The process is simply about allowing THEM to extend OKW contracts, and they HAVE to offer the option to owners at the same time.

Or is it simply to have enough owners those last 15 years to make the system viable given the inevitable government type baggage that builds over the years. I suspect the latter is their main goal and they're just trying to figure out how to get something out of it but still keep enough owners on board at each resort.

BostonDisneyKid, you don't simply need a lawyer but one who's familiar with both FL law and timeshare/condo law. Most experienced timeshare people will know much more about the legal issues of timeshares than just any average lawyer. You might want to contact DBPR in Tallahassee and speak to the legal rep for their agency that covers this matter and possibly ask for a recommendation from that person, the FL BAR or even from management from OTHER timeshares in the state. Maybe Marylyn's daughter can help with a good recommendation possibly given to you privately.

c) On the "not being allowed to vote personally" thing...well, that's what's provided for in the documention provided to you, and accepted by you, when you bought into DVC. Keep in mind, I'm not being snarky here. Just letting you know how they can do it. You gave them the right to vote on your behalf, via proxy membership rep.

Not in every area. They are require to essentially vote for the common good. There are situations where they would not have the right to vote without a vote of the members themselves.

 

[Dean]

The annual declaration of the budget indicates that they are excused from paying their share of the common expenses in exchange for their guarantee. I just checked it. They may not proceed this way, but they seem to declare that they are excused each year that I can find.

After reviewing the FAQ for the State of FL, FS 721 & the FAC associated, I believe this only applies to the "common expenses" and not the units themselves. And even then it must be specified with an ending date, which can be changed, and they must guarantee to pay any excess costs for that time, but again for the "common expenses".

 

[zzyzx409]

My concern is resale. The 6 month window between Sept and Feb is just not enough time to determine if the time increase will affect the resale market.

I do not plan to keep my DVC until 2057 (or even 2042). I will be selling in 5 to no more than 10 years. Today there is 35 years left on the contract at OKW and points are going for a nominal $75. In 5 years there will be 30 years left on a 2042 contract and 45 left on a 2057 contract. In 10 years there will be 25 years left on a 2042 contract and 40 years left on a 2057 contract. What will points be worth then? (rhetorical question, I know nobody knows)

To many people 25 years is a long time. If I keep my DVC for 5 or 10 more years I will have had the membership for 18 to 23 years. But the remaining time on points will be a matter of perception on the part of buyers. I remember a couple of years ago a discussion that DVC ending in 2042 was not enough time. So if there are points that end in 2042 and those that end in 2057 which points will be valued more? Will that value be worth the additional expense to increase the contract?

My main concern is will 2057 points go up to $110-125 on the resale market and 2042 points go down to $50 on the resale market in 5 to 10 years?

Some folks have said that they don't think that 2057 points will be worth more than $5 per point more than 2042 points (is that wishful thinking to avoid buying the extension?).

When I purchased DVC it was a vacation purchase. As I get older I look at it as an asset. I would like to protect my asset in the best possible way.

What to do? What to do?

Andy

 

[Dean]

My concern is resale. The 6 month window between Sept and Feb is just not enough time to determine if the time increase will affect the resale market.

I do not plan to keep my DVC until 2057 (or even 2042). I will be selling in 5 to no more than 10 years. Today there is 35 years left on the contract at OKW and points are going for a nominal $75. In 5 years there will be 30 years left on a 2042 contract and 45 left on a 2057 contract. In 10 years there will be 25 years left on a 2042 contract and 40 years left on a 2057 contract. What will points be worth then? (rhetorical question, I know nobody knows)

To many people 25 years is a long time. If I keep my DVC for 5 or 10 more years I will have had the membership for 18 to 23 years. But the remaining time on points will be a matter of perception on the part of buyers. I remember a couple of years ago a discussion that DVC ending in 2042 was not enough time. So if there are points that end in 2042 and those that end in 2057 which points will be valued more? Will that value be worth the additional expense to increase the contract?

My main concern is will 2057 points go up to $110-125 on the resale market and 2042 points go down to $50 on the resale market in 5 to 10 years?

Some folks have said that they don't think that 2057 points will be worth more than $5 per point more than 2042 points (is that wishful thinking to avoid buying the extension?).

When I purchased DVC it was a vacation purchase. As I get older I look at it as an asset. I would like to protect my asset in the best possible way.

What to do? What to do?

Andy

To a degree I am in the same situation. I have a non OKW contract I was planning to sell this winter but assuming the other on property resorts are offered the same option, I'll have to decide what to do as well. I feel confident that new and existing members will be able to extend later but the ? is at what price. My first inclination is that I'd never make up a $15 per point difference unless we're talking late in the course of a 2042 contract but that is the ? isn't it.

 

[BWV Dreamin]

The real uncertainty, IMHO, is that we do not know just how low the 2042 contracts will drop. There have been fabulous predictions, based on some formulas, to show approx. what the new price per point value would be. The question is will spending the $15/pt. now be offset by the retained/increased values the now 2057 contracts may see? And lets say one doesn't excersise the one time offer, but is still able to extend later through other promos? Again, at what price will that be? We may see a rush to do this, once we see what the resale values drop to with the 2042 contracts.

 

[zzyzx409]

Been thinking more about this all day. Had a couple of discussions with my wife and the tentative conclusion we have come to is...

We do not plan to extend. Reasoning is that the cost to extend may or may not be recovered when we sell and it would be a about a $7,000 outlay if we just took cash to pay for it, (exclusive of any finance charges which could make it more like $14,000 on typical finance contracts).

So if we sell in 5 to 10 years, we will just be happy with what ever we get, and consider the balance some wonderful memories of great vacations.

By reading this forum, if there are many other DVC members like the ones here, I'm not sure Disney will get many bites. Maybe better to wait for Disney to have a special promotion.

Also we were thinking, why would Disney do this? The property just reverts to them in 2042 anyway? The conclusion we came to is that it would be a good revenue stream to offer something like this every 15 years to extend the contracts from the then current current 35 years left to 50 years each time. Hmmmm...... ? ? ? ? Sounds like good business (for Disney) to me, and nothing wrong with that!

Later,

Andy

 

[rsinj]

.

 

[goldilocks_63]

I'm guessing the average person owns around 7 years, for whatever reason...

That being said, I think I was reluctant to buy because it "only" had 42 years to this....

I'm thinking that there may be a market for those who only want to be saddled with a 10 year committment. Your kids could use it age 3 - 13, and then they want to go other places anyway like Universal, or stay home w/their friends. School gets more demanding, and it's hard to pull them out, so maybe there is a market for a short time frame.

Question is, what would the resales look like...?

Goldi

 

[zzyzx409]

I'm guessing the average person owns around 7 years, for whatever reason...

That being said, I think I was reluctant to buy because it "only" had 42 years to this....

... snip

Question is, what would the resales look like...?

Goldi

The resale question, is the $64,000 question!

Based on what I'm reading here, Disney is going to have to do some real "sweetening of the pot" (perks, deep discounts, something) to get people to buy into this. Maybe length of stay parkhoppeer passes for 10 years or so, maybe deep, deep discounts on Disney Cruises for some years.

Without something like this, the deal looks like a non-starter for me, and maybe many here.

Just MHO, YMMV

Andy

 

[Mr.Monk]

We've discussed the 15 year extension rather extensively this past weekend and based on our age probably wouldn't go for it. However, if we were 10-15 years younger.... then we probably would go for it at the $15 point level.
($15 is pretty close to the going rate to rent out the points for one year.)

We purchased DVC on an emotional level without any aspirations of investment potential. And we'll stay with DVC through 2042 (if we live that long!) because of our emotional attachment to the vacation lifestyle we were "buying into".

We're part of another time share that has cheaper annual dues and we're satisfied with the perks of that membership. However, there is just something about DVC that remains warm and dear to our hearts.

It is a tough decision.

 

[Mai Ku Tiki]

I know several members who NEVER frequent ANY forums for DVC info.

So I wonder how many of the tens of thousands of members will actually come here to benefit from reading & mulling over the many knowledgeable opinions and viewpoints?
Or will MANY fall prey to the :
a) warm & fuzzy magical feeling of extended years of membership or
b) the scary(to the uninformed)words in the offer like 'FEB. DEADLINE' & 'LIEN' ????

The plot thickens..............

 

[dianeschlicht]

The resale question, is the $64,000 question!

Based on what I'm reading here, Disney is going to have to do some real "sweetening of the pot" (perks, deep discounts, something) to get people to buy into this. Maybe length of stay parkhoppeer passes for 10 years or so, maybe deep, deep discounts on Disney Cruises for some years.

Without something like this, the deal looks like a non-starter for me, and maybe many here.

Just MHO, YMMV

Andy

I agree. We have thrown these ideas around for more than a week now, and we are still no closer to making a decision than when we first heard of it. Most likely, we will NOT take the extra 15 years, but it too is a gamble. I guess if we assume we don't care about getting our initial investment of dollars back, then we are best off just selling for whatever price when we are done using DVC, and just be happy for having had the use of it for that long. On the other hand, I'd like more to show for it than expense in a couple of years. Originally, our plan was to sell one OKW contract in 5 years and then buy more AKV points. This would reduce the total number of points we own, thus reduce our expenses a bit, and would give us a longer end date and hopefully a better resale price when we no longer wanted to do DVC. Now I'm thinking that plan wont work so well.

 

[zzyzx409]

I agree. We have thrown these ideas around for more than a week now, and we are still no closer to making a decision than when we first heard of it. Most likely, we will NOT take the extra 15 years, but it too is a gamble. I guess if we assume we don't care about getting our initial investment of dollars back, then we are best off just selling for whatever price when we are done using DVC, and just be happy for having had the use of it for that long. On the other hand, I'd like more to show for it than expense in a couple of years. Originally, our plan was to sell one OKW contract in 5 years and then buy more AKV points. This would reduce the total number of points we own, thus reduce our expenses a bit, and would give us a longer end date and hopefully a better resale price when we no longer wanted to do DVC. Now I'm thinking that plan wont work so well.

We have been members since 1994, we signed when they were offering the park pass promotion to the end of 1999. We stayed at least once per year from 1994 to 1999 and used those passes well.

We have also made good use of our DVC interest in staying at OKW and trades and exchanges for other places (Sedona and Maui). At this point we feel we have about broken even with our original purchase price (less the interest on the loan). So if we keep DVC for 5 more years that will be 18 years of use. Pretty good.

If the DVC offer is just a straight $25 per point, or even $15 per point (as someone rumored), without some kind of perk (large perks) we do not feel that the cost/benefit would make the extension worth it to us.

In 5 to no more than 10 years we will most likley just sell at the going rate (whatever that is) and get out and have lots of very happy memories of our DVC experiece and OKW visits.

Just MHO,

Andy

 

[Mtnman44]

Is there any reason to think that an extended OKW would not have "approximately" the same market resale value as SSR?

Using SSR market value as a quide, are you willing to pay $15 per point to bring your OKW ownership up to the market value of SSR? Of course not. It is a bad deal. Excellent for disney but bad for anyone who is considering extending for the sole purpose of increasing resale value. It is no different than selling OKW now and buying AKV "so you can have the higher resale value". Just my opinion of course but think it over carefully. I still feel this is only good for someone who wants and will be using their DVC after the current 35 year end.

 

[pilferk]

Is there any reason to think that an extended OKW would not have "approximately" the same market resale value as SSR?

Using SSR market value as a quide, are you willing to pay $15 per point to bring your OKW ownership up to the market value of SSR? Of course not. It is a bad deal. Excellent for disney but bad for anyone who is considering extending for the sole purpose of increasing resale value. It is no different than selling OKW now and buying AKV "so you can have the higher resale value". Just my opinion of course but think it over carefully. I still feel this is only good for someone who wants and will be using their DVC after the current 35 year end.

A couple things to consider on why SSR might not be "equivalent" to OKW:

1) OKW, with extension, will have 3 more years. Negligible difference, but considering, with the proposed subsidized price of $15 ppt for the extension, you'd think that would work out to about $3 per point difference (assuming you break down 15ppt / 15 years = $1 ppt per year).

2) OKW rooms are larger than SSR's rooms. That may mean OKW turns out to have a bit more value than similar SSR rooms.

3) OKW room take less points to book than SSR, meaning points are "more valuable" because they buy you more. That may put a premium on those points.

Obviously OKW is much older than SSR..the question is does the "age difference" offset OKW's advantages? I don't know....looks like the market will get to answer that question.

However, there's enough difference that I'm not sure you can draw a direct parallel between SSR and OKW. SSR might be a decent "jumping off point", but because of the above, I'm not sure it's safe to assume they're equal.

Edit:
The other issue, and we've talked about it before, is you don't know what will happen to 2042 contracts after the extension option is offered. It could be the resale price on those 2042 contracts drops...or that extended contracts go up...or a bit of both.

If it were simply a matter of ASSUREDLY paying $15 to increase resale value $5....you're right, it's not a good deal. The problem is..there's no such assurances...in either the increase in resale price OR in the price level maintenance of the 2042 contracts. You just don't know.....not in the immediate, and certainly not in the long term. All you can reasonably guess at is that it will have SOME effect. WHAT effect that is.....specualtion. And unless their is a clairvoyant lurking around that wants to help out, everybody is left wondering, with no real concrete answer.

 

[salmoneous]

1) OKW, with extension, will have 3 more years. Negligible difference, but considering, with the proposed subsidized price of $15 ppt for the extension, you'd think that would work out to about $3 per point difference (assuming you break down 15ppt / 15 years = $1 ppt per year).

Ah, but the question is what value the resale market will put on years 2042-2057, not what value Disney can make up for those years. If the current difference in resale value between OKW and SSR is mostly due to the extra years, then the resale maket is putting a price of $5 on years 2042-2054. At most, the market would value 2055-2057 for $1 total.

Note - if you do want to value 2042-2054 via Disney prices, it's $92 vs $94 currently.

2) OKW rooms are larger than SSR's rooms. That may mean OKW turns out to have a bit more value than similar SSR rooms.

3) OKW room take less points to book than SSR, meaning points are "more valuable" because they buy you more. That may put a premium on those points.

However, you don't need to own at OKW to take advantage of those larger rooms or smaller point values. There are almost always OKW rooms at the 7 month mark. Have we ever had reports of somebody not being able to get a Studio/1BR/2BR at OKW at the 7 month mark?

Ignoring ending date, the one advantage I see for owning at OKW over SSR is the ability to get a cheaper GV. Those are often gone at the 7 month mark, so you need to own at OKW if you want GV's. I'm not sure what kind of value the resale market will put on that - but I bet it will be pretty small.