2042 Resale Value

[gmflash88]

Kicking the DVC tires right now. Wondering how I should “value” the piece of the puzzle that is the deed year. Looking at OKW with 2042 exp date.
Who knows...maybe we will drive it until the wheels fall off, but I’m going to play the odds and assume that we keep it for the next 10 years. 15 tops if we end up with grandkids we start taking.

Pure speculation, but is anyone going to want to buy a deed with only 7-10 years on it? I realize it will depreciate due to age/years remaining, and that’s ok, just wondering what the group’s opinions are.

Thanks all!

 

[Sandisw]

Honestly, I don’t think resale value should play a role in a purchase.

Having said that, I think the value of the 2042 resorts in 10 years will be very minimal.

I just sold both my BWV contracts and replaced them with RIV and BLT so we own resorts with much longer expiration as my kids love those two resorts...me too...and we owned BWV for my DH who doesn’t go that much right now.

Plus, given how many points we own..775 when I closed on BLT this week...we have plenty to get BWV garden view at times when he does go!

 

[Zurezo]

Honestly, I don’t think resale value should play a role in a purchase.

Having said that, I think the value of the 2042 resorts in 10 years will be very minimal.

I just sold both my BWV contracts and replaced them with RIV and BLT so we own resorts with much longer expiration as my kids love those two resorts...me too...and we owned BWV for my DH who doesn’t go that much right now.

Plus, given how many points we own..775 when I closed on BLT this week...we have plenty to get BWV garden view at times when he does go!

We just dont know what the resale will be in that time. I own at Boardwalk and in 10 years if I can buy super cheap contracts and get 10 more vacations out of it then count me in.

I will say my last two contracts have been at 2060+ and its nice to know I have 40+ years left. ha

 

[Sandisw]

We just dont know what the resale will be in that time. I own at Boardwalk and in 10 years if I can buy super cheap contracts and get 10 more vacations out of it then count me in.

I will say my last two contracts have been at 2060+ and its nice to know I have 40+ years left. ha

True, we do not...but as you even mention, if they are cheap people will buy them. Anything will sell...but someone buying today, IMO, should go in assuming it will be worth little and whatever it is is a bonus!

 

[LadybugsMum]

I've been looking at resale and now have an SSR contract at Disney for ROFR. I decided not to buy at OKW because of the 2042 expiration and there weren't any 2057 contracts that I was interested in. At a more popular place like BWV, the 2042 would be less of an issue for me.

 

[4luv2cdisney]

The value in 10 years will be significantly less than other non-2042 resorts, but nowhere near zero.

If there were only 10 years left on a BWV contract today, I'd still be willing to pay $50-$60 per point for it.

So, I'm guessing in 10 years, all prices will have inflated and BWV/BCV could still have a value in the $75-$100/ pt. range. BRV / OKW probably less. Realize that SSR, AKV, OKW(e) and BLT will only have 24-30 years left at that time as well. So, if their value is $150 to $200 /pt, 1/2 that is reasonable for a resort you really want. And for some people, it will be what makes it affordable for them to get into DVC.

What will rental prices be in 10 years? If the answer is $23-25/pt to rent, I can't imagine any contract with a 10 year lifespan being worth less than $60 / pt.

My numbers are guesses of course. My point is the relationship to the other prices at that time (if that makes sense).

 

[gmflash88]

I posted the same basic question on the DVC subReddit, got simlar sentiment answers, so I'll save some typing and post the same reply here for further input/discussion. Thank you all very much!

I'm making a spreadsheet to calculate out a 10yr cost that include a (entirely hypothetical) "return" on the points if sold at the 10yr mark. I also factored out MF increases using the aggregate increases as posted a few places online to calculate what those will (might? should?) cost over a 10yr run as well.

The value of the points is a tough one to nail down based on everything you all stated. Will OKW points that are selling for $100ish now be worth less than half in 2030? Will they be the same? Will they increase in value? What about SSR and AKL?

Basically, we are weighing out whether or not it makes sense to buy DVC, or rent points when we want to go on a trip.
Quick and dirty math (according to my spreadsheet) says that if OKW is worth 50% of it's current average resale price, I lose/spend about $18,700 over 10yrs. At (roughly...because I need a baseline) 5 nights a year, that's $374 a night for a 1bd. Is that less than rack rate? Of course. Significantly so. It's also less than rental (calculating 125pts at $18per). It's NOT less than standard resort rooms though, yet that's difficult to value since a 1bd villa gives kitchen, (food $ savings), notably more space, will encourage less park time/encourage more relaxing (spending/ticket $ savings)... I could spreadsheet myself to death on this one!

At the end of the day, it comes down to what I'm willing to spend for our vacation(s). I do not expect a return, but it needs to "make sense"...if that makes sense. Lol.

 

[Prince John Robin Hood]

Inflation will likely help keep the price of the contracts up. I'm looking for resorts with more years on the contract but if a great deal on BCV, BRV or BWV came up I wouldn't hesitate to buy there.

 

[4luv2cdisney]

I posted the same basic question on the DVC subReddit, got simlar sentiment answers, so I'll save some typing and post the same reply here for further input/discussion. Thank you all very much!

I'm making a spreadsheet to calculate out a 10yr cost that include a (entirely hypothetical) "return" on the points if sold at the 10yr mark. I also factored out MF increases using the aggregate increases as posted a few places online to calculate what those will (might? should?) cost over a 10yr run as well.

The value of the points is a tough one to nail down based on everything you all stated. Will OKW points that are selling for $100ish now be worth less than half in 2030? Will they be the same? Will they increase in value? What about SSR and AKL?

Basically, we are weighing out whether or not it makes sense to buy DVC, or rent points when we want to go on a trip.
Quick and dirty math (according to my spreadsheet) says that if OKW is worth 50% of it's current average resale price, I lose/spend about $18,700 over 10yrs. At (roughly...because I need a baseline) 5 nights a year, that's $374 a night for a 1bd. Is that less than rack rate? Of course. Significantly so. It's also less than rental (calculating 125pts at $18per). It's NOT less than standard resort rooms though, yet that's difficult to value since a 1bd villa gives kitchen, (food $ savings), notably more space, will encourage less park time/encourage more relaxing (spending/ticket $ savings)... I could spreadsheet myself to death on this one!

At the end of the day, it comes down to what I'm willing to spend for our vacation(s). I do not expect a return, but it needs to "make sense"...if that makes sense. Lol.

You're right. You can't compare regular hotel rooms to 1 bedrooms.

FWIW, most of us do all this agonizing over spreadsheet crap before we buy and then never really think about it once the $ is spent.

We bought points for studio stays. So, comparison was pretty easy. We get to stay at Boardwalk for the price of a moderate. I didn't calculate any remaining value of my contract in there.

Where do you usually stay now? We were planning 2 trips when we bought and the $10K we spent on points were about what we had budgeted for 2 trips. Yes, we still had to buy tix and food (turning our $10K budget into closer to a $15K reality), but once those 2 trips were out of the way, I'm really only thinking about my dues as room costs (which feels pretty great!)

How old are your kids? Once they get significant others, you're probably either taking trips without the kids (do you really need a 1 bedroom?) or bringing the s.o.'s (hello 2 bedroom or multiple studios). All before the grandkids come into play. Lol.

Maybe calculate for studio stays and then know that whatever extra cost (the difference) is for your room upgrades and ask yourself if it's worth it from there. Or just buy for studio stays until you need to make the upgrade....? You're very likely to want to add on after your initial purchase anyway.

 

[jarestel]

It's a safe bet to say resale value will be at the low end of the scale for the 2042 resorts but maintenance fees will most likely be on the north side of $10 per point. I do think there will be a market for contracts with limited numbers of years on them and quite frankly if DVC sold direct contracts with varying lengths, I might be all over a 10 year contract. But I wouldn't be willing to pay top dollar or even middle dollar for it.

 

[gmflash88]

You're right. You can't compare regular hotel rooms to 1 bedrooms.

FWIW, most of us do all this agonizing over spreadsheet crap before we buy and then never really think about it once the $ is spent.

We bought points for studio stays. So, comparison was pretty easy. We get to stay at Boardwalk for the price of a moderate. I didn't calculate any remaining value of my contract in there.

Where do you usually stay now? We were planning 2 trips when we bought and the $10K we spent on points were about what we had budgeted for 2 trips. Yes, we still had to buy tix and food (turning our $10K budget into closer to a $15K reality), but once those 2 trips were out of the way, I'm really only thinking about my dues as room costs (which feels pretty great!)

How old are your kids? Once they get significant others, you're probably either taking trips without the kids (do you really need a 1 bedroom?) or bringing the s.o.'s (hello 2 bedroom or multiple studios). All before the grandkids come into play. Lol.

Maybe calculate for studio stays and then know that whatever extra cost (the difference) is for your room upgrades and ask yourself if it's worth it from there. Or just buy for studio stays until you need to make the upgrade....? You're very likely to want to add on after your initial purchase anyway.

I was only using a standard room in "comparison" in terms of opportunity cost to stay on WDW property. There isn't a comparison when it comes to space. We don't have a usual place to stay. We're actually booked for September for our literal first ever on-site stay. So I guess our usual is off site renting condos or houses. That being said, this will only be our 4th trip in just short of 8yrs. What we are considering is completely retooling our vacation/recreation budget. Currently, we are campers. Ok...glampers (as a 41yr old man, I barf a little saying that word). We love it and it really is kind of "who we are". The problem is that we still like to come to Orlando periodically and would like to come more often, but you know...$. When you have the cost of the trailer, maintenance, insurance, campsites, gas in the truck (which adds up fast towing at 9-10mpg), etc., it's more expensive than it appears on the surface. Also, the kids are 18 (in college and moved out), 14, and 12. The 14 and 12 still come camping 90% of the time, but now that's starting to wane with more of a drive towards independence (ESPECIALLY the 14yr old).

We feel like DVC is just starting to make more sense. Camping happens over a 4-5 month period in MN. Disney (or HH or VB) are year round. We can go down for 2 nights and hit MVMCP or MNSSHP or whatever. Then of course *gulp*, eventually there will be grandkids. I can't believe that's right around the corner....

So yeah, everything you said. The "logic" behind the spreadsheet is simply to see how this fits into our vacation budgeting. The information, thoughts, and opinions here have been awesome and I appreciate the replies!

 

[CaliAdventurer]

A couple years back I had to choose between BCV which I love and VGF which I really love. in hindsight, I wish I had bought both. As it stands now, I typically do a split stay 1/2 at MK resort and 1/2 at Epcot resort; it really is like two different vacations. But, when it came to pulling the trigger on BCV, I just couldn't get past that end date and losing 20 years- the value just wasn't justified for me. Fast forward and I did not appreciate in my calculations just how much more point expensive VGF (and now Riviera and I'm sure future resorts) is. Make sure you are allowing for that when you decide the value to you. 2042 resorts are much cheaper to buy and much less expensive to use.

 

[Bobby2443]

I bought 550 points between two contracts this year at BCV and in my mind I am assuming there will be no resale value whenever I decide I don’t want them anymore (or obviously when they expire). Would it be a nice bonus to maybe sell at $50 a point with 10 years left when my kids are older and don’t want to go as often or not at all? I’d like that but am not counting on anything. I am focused on buying now to avoid the cost of paying cash because right now my family values the 1 and 2 bedroom units with a kitchen, and paying cash for those units from Disney is absurd (they got me once on the try before you buy and I will not pay that nightly rate again) so that’s why I bought DVC. Anything you can sell towards the end would be a bonus

 

[DVC Doctor]

Here is my guess for OKW resale prices and we will see an acceleration of decreasing value as the time gets closer to the end. Also, I am not sure how extending the contract to 2057 works for resale value, but that could be an interesting play for new buyers.

2020 price = $90pp
2025 = $80
2030 = $65
2035 = $35
2040 = $5
2042 price = $0 pp

 

[Fantasia79]

Daily discussion in our house. We love Boardwalk possibly more than our home resort and want to add on a new contract (resale). AKV is a 2nd for us. But, we want to be able to book BWV at 11mo. However, just can’t get past spending more money for a contract that expires so much earlier! AGH!

 

[LTJoeFlo]

Here is my guess for OKW resale prices and we will see an acceleration of decreasing value as the time gets closer to the end. Also, I am not sure how extending the contract to 2057 works for resale value, but that could be an interesting play for new buyers.

2020 price = $90pp
2025 = $80
2030 = $65
2035 = $35
2040 = $5
2042 price = $0 pp

I don't think the values would ever go to $5 or $0. At $5pp it creates an arbitrage scenario for point renters. A 100 point contract would cost $500 plus closing costs $500 (est.). The person could then rent those points for 2 years. At current rates, you can net almost $3k. DVC brokers would be buying up every possible contract to rent out.

But in reality, DVC would ROFR every offer below a certain amount and then resell them at the 2057 extension date. Just because it isn't worth $40 to you, doesn't mean that it isn't worth it to Disney.

 

[Bearval]

I don't think the values would ever go to $5 or $0. At $5pp it creates an arbitrage scenario for point renters. A 100 point contract would cost $500 plus closing costs $500 (est.). The person could then rent those points for 2 years. At current rates, you can net almost $3k. DVC brokers would be buying up every possible contract to rent out.

But in reality, DVC would ROFR every offer below a certain amount and then resell them at the 2057 extension date. Just because it isn't worth $40 to you, doesn't mean that it isn't worth it to Disney.

I agree that once OKW 2042 contracts drop below a certain price point DVC is going to ROFR every contract below that number and extend them to 2057. This could also shrink the pool of OKW 2042 owners who are hoping they will get a "free" extension to 2057.

 

[DVC Doctor]

I don't think the values would ever go to $5 or $0. At $5pp it creates an arbitrage scenario for point renters. A 100 point contract would cost $500 plus closing costs $500 (est.). The person could then rent those points for 2 years. At current rates, you can net almost $3k. DVC brokers would be buying up every possible contract to rent out.

But in reality, DVC would ROFR every offer below a certain amount and then resell them at the 2057 extension date. Just because it isn't worth $40 to you, doesn't mean that it isn't worth it to Disney.

Lets hope you are correct as the original 1991 prices were around $40 and if they ROFR for $40 after allowing people to use then for 48 years, then that would go down as a huge bargain buy for consumers

 

[sethschroeder]

If there were only 10 years left on a BWV contract today, I'd still be willing to pay $50-$60 per point for it.

Here is my guess for OKW resale prices and we will see an acceleration of decreasing value as the time gets closer to the end. Also, I am not sure how extending the contract to 2057 works for resale value, but that could be an interesting play for new buyers.

2020 price = $90pp
2025 = $80
2030 = $65
2035 = $35
2040 = $5
2042 price = $0 pp

Both of these I view as guesses instead of putting some math behind it and are viewing it from 2020 not from 2030 viewpoints.

Lets get some things out of the way:

• Hotel nightly rates will go up
• People buy/rent DVC because its cheaper (this is true for many people and I would suspect 90% of resale buyers)
• MFs will go up at a slower rate than nightly rates
• Disney will not lose its appeal especially since they own 95% of the major franchises now

So now for some math:

• Nightly rate at DVC is going to be $550+ (in 2020 again more expensive in 2030/35/40)
• That is $3850 (plus taxes) for the week
• Give a 35% discount it down is down to $2500
• Week in studio is around 100-125 points
• Lets call it $8 for MFs which is around $800-$1000
• So we are left with a $1500-$1700 savings so far
• Next lets account for people wanting to save more if buying a contract and give another 50% off
• We are now left with a $750-$850/wk
• Per point that would be $6.80-$7.50 per point per year
• The value with 10 years left would be $68-$75/point

My math doesn't account for room rate increases which offsets the minimal MF increases. My math also accounts for the "I want a good deal" by giving an extra 50% off a already discounted 35% rack rate.

In the end math will change based on what people want to stay in and when but just giving you an idea that even with 10 years left its not like they are worthless contracts. Most of the value of DVC is in the first 5-10 years of the contract and people discount the money they might save in 20-30 years time.

 

[LTJoeFlo]

Lets hope you are correct as the original 1991 prices were around $40 and if they ROFR for $40 after allowing people to use then for 48 years, then that would go down as a huge bargain buy for consumers

Haha! That is awesome. I was using $40 as an arbitrary number but I understand the point. I purchased VGF in 2013 with every intention of using the contract until I was physically unable. Plus, I didn't even know there was an option to sell. I purchased for the purpose of using it to visit WDW every year and to enjoy the intrinsic value of owning a tiny fraction of Grand Floridian. The current resale prices for that resort already exceed what I paid for it. That is a tremendous value from a time-share!