advice needed on selling and then rebuying

[MichelleB]

We own 200 pts. at HHI, 140 at VB, and 290 at VWL and these are under 2 different contracts (HHI and VB on one and VWL on another). We thought we'd visit HHI there more than we have (we've owned the pts. for 9 years and have visited twice) but do use them to visit WDW or have also used them for the cruise (I know not the best value but we had them to use so did).

We love VB and definitely want to keep those as well as our VWL points. What I'm debating is the HHI contract. We only paid $60 per point for them back 9 years ago and on resale they should sell for about the same meaning all we'd be out was our MF over the 9 years and the selling fees. Does it make sense to sell it and rebuy at a WDW resort? We do use the 200 pts. each year although not at HHI so I don't want to sell them and not replace with something else. Would it make sense to pick an onsite location and rebuy? If so, then resale vs through Disney? I lean to resale, but we've also used our pts. for the cruise and had difficulties combining both contracts to use for the cruise since we use banked and borrowed as well as the current UY.

We are not set on a location and have stayed at all but BLT and THV (makes sense since they're not even open yet!) and if it means staying at VWL we're ok with that too since we love it there. We recently stayed at AKL and everyone loved it except DH who just thought it was ok. I just can't get past the fact that if we sell HHI then we've not lost much in the overall scheme of things and can rebuy onsite where we'll use those points. It would mean paying more now, but we'd get an additional 15 or more years and the dues at those resorts are less than HHI so over time that would help off-set the difference. I'm just not sure if it makes sense from a practical standpoint.

My goal is to purchase contracts for each of my kids to give them as college graduation presents (they're 13, 11, and 8 -- we'd pay the dues until we're gone and then will account for it in our finances to leave them). If we sold the HHI contract, my intent would be to get smaller contracts in which we could use until they're old enough and then transfer to them at that point since I can't put them on the deed now. I hate to wait to buy their contracts since prices will only continue to go up and we can use the points now while we'd need them for our family. Once the kids are older and have their own pts., then we wouldn't need so many and what we'd have left would be more than enough.

Anyway, any advice for or against? Anything I've not thought of and should?

 

[DVCGeek]

With HHI MFs as high as they are, I would sell it and buy from Disney. By my math it is cheaper in the long run to buy at BLT over any of the others, even at direct from Disney price w/ no incentives @ BLT vs. resale for the others. I back that up by taking purchase price divided by number of use years remaining and then add back in MFs to make things an apples to apples comparison, knowing MFs will go up at any of the DVC properties over time. BLT is: $112 / 51 (I have an Aug. UY) = ~$2.20; $2.20 + 3.67 = $5.87 per point per year @ 2009 MFs. If you can afford it that sounds to me like it would be your best deal since you want the long term use. Specifically, I'd go for 3 add ons to your VWL lodge contract of 67+ points each. You'd even get at least one extra point for your trouble each year!

 

[dianeschlicht]

I agree. With the high fees at HHI, I'd definetly sell that contract. I guess if it was me, I'd buy points at your other WDW location. That gives you more points to use at the 11 month booking window, provided they are the same use year.

 

[disneychic]

I agree w/ the other posters, but resale prices are so low right now that you're not going to get a great price for your HHI points. I'd hold off. JMHO

 

[MichelleB]

So you think adding on at VWL would be better than SSR, AKV, or BLT? I figured one of those resorts would be better in order to gain the extra years but maybe I'm wrong. I'm not an OKW fan (actually sold our contract we had there and bought VWL) so that resort is out. I can't say we're in love with the pts. chart for BLT although we looked at the models while there 2 weeks ago and love the extra space in the living space but the studio part of the 2 bdrm. seemed claustrophobic to us.

Am I on track that thinking the extra cost for more points (the going rate versus the $60/pt. that we paid) is worth it in the long run for extra years and lower MFs? I'm just not sure. My DH will think I'm crazy but it just all seems to make sense to me.

I just keep thinking we LOVE VB and would like to visit there every year but HHI is just ok. Nothing wrong with it, but my preference is VB from a non-onsite resort standpoint. I can't see keeping HHI if we primarily go to WDW. However, knowing that VB MFs are higher, I'd still never sell that contract because it's our absolute favorite.

 

[DVCGeek]

So you think adding on at VWL would be better than SSR, AKV, or BLT?

If that was directed to my post then let me clarify, I might not have worded it very well:

I would add on three 67 or more point contracts with BLT as the home resort, through Disney directly, and use your VWL contract as the "master" for use year purposes (not the Vero one). So, buy BLT points for the lowest cost per year and the most years!

Does that make more sense?

Sorry for any confusion!

 

[Dean]

Let me take the dissenting view. It does not make sense to me to sell then rebuy unless you are selling a more expensive resort and replacing with a cheaper one, downsizing in points or simply can't live without a given home resort and don't really care how much extra you're paying. While it is my opinion that HH maint fees will cont to be high, it is also my feeling that BLT will not stay as low as they are now. I'd expect the long term spread to be no more than around $1 per point for HH/VB compared to the rest. Say you sell 200 points at HH for $60 a point and replace them at BLT for $107. You would NEVER make up the difference on fees alone plus you'd have the commission of $1200 or so on top of that. I could see replacing HH with a SSR resale for maybe a $10-12 a point differential but even then it likely doesn't make the best sense $$$ wise.

 

[MichelleB]

Dean, you're always such a wealth of knowledge, so I'm going to ask you to help me with figures. Although BLT is nice, I don't feel it's a good value for us at this time since it's so much more cost-wise. I am thinking the new contract (if we did it) would be for either SSR or AKV with AKV being my first choice I think because we did like it there so much and we'd go resale because Disney is just too expensive.

I would be selling HHI for approx. $60 and purchasing the new contract for say $88 (just using a higher number via resale for calculations -- anything less is just better). We'd be able to sell HHI for our cost minus MFs over the years and selling expenses. Not a bad deal for the use of those points for 9 years. The selling would be about $10,800. Let's assume I rebuy the exact same number of pts at $88 for a total cost of $17,600 (I'm not sure what closing would be so didn't add that into this). In essence, then it would cost me approx. $7000 (I added $280 for closing but it's probably more) to sell and rebuy the same number of pts. but I'd be getting 15 years more on the contract. The dues would be about $.50 less per pt. (I again took the higher dues at AKV rather than SSR for calculation -- if we chose SSR it would be a greater savings) so a savings of about $100 per year. Am I missing anything?

 

[MichelleB]

Dean, one other question and I know it's pure speculation. My all-time favorite resort is the Polynesian. Since buying DVC we don't stay there anymore, but if there was ever a resort to be built there, I'd purchase hands down. In your opinion, will they ever build there? Again, it's just opinion.

 

[Dean]

Dean, you're always such a wealth of knowledge, so I'm going to ask you to help me with figures. Although BLT is nice, I don't feel it's a good value for us at this time since it's so much more cost-wise. I am thinking the new contract (if we did it) would be for either SSR or AKV with AKV being my first choice I think because we did like it there so much and we'd go resale because Disney is just too expensive.

I would be selling HHI for approx. $60 and purchasing the new contract for say $88 (just using a higher number via resale for calculations -- anything less is just better). We'd be able to sell HHI for our cost minus MFs over the years and selling expenses. Not a bad deal for the use of those points for 9 years. The selling would be about $10,800. Let's assume I rebuy the exact same number of pts at $88 for a total cost of $17,600 (I'm not sure what closing would be so didn't add that into this). In essence, then it would cost me approx. $7000 (I added $280 for closing but it's probably more) to sell and rebuy the same number of pts. but I'd be getting 15 years more on the contract. The dues would be about $.50 less per pt. (I again took the higher dues at AKV rather than SSR for calculation -- if we chose SSR it would be a greater savings) so a savings of about $100 per year. Am I missing anything?

You're looking at a difference more in the $8000 range in all likelihood up front and somewhere in the 50¢ to $1 range per point in fees that would be favorable to your position. The one thing you're likely forgetting is the lost opportunity costs with the $8000. IMO, just averaging it over the lifetime of the contract is a poor way to view it. If you had $8000 sitting in the bank and invested it you would have an expected return. Depending on the risks you were willing to take with such a situation, that return might be 4% or it might be 20% or certainly could lose money. Certainly many investments made a year or two ago would not have worked out but then DVC has lost value in the interim as well. I can support selling and waiting. I can support selling and looking for a steal, possibly at SSR. I personally would not be in favor of just selling and rebuying to to get a different resort unless you thought points at a different resort had an $8K benefit to you. If you wanted AKV concierge, BWV specialty views or BLT MK view routinely I would say go for it if the finances worked out. IMO it is not reasonable to sell and rebuy just to get a different home resort unless that home resort is important to you. OTOH, I feel the owners at HH and VB would have the most benefit in doing so if those resorts were not important to them, esp given that SSR and AKV will have a larger long term value than would those 2 resorts.

Other options besides the above would be to do a smaller add on using that $8K or at least part of it. You could get say 50 extra points and likely pay the extra dues by investing the difference and cover the dues for from 20 years up to the life of the contract. You could also reserve summer HH weeks to rent out using your HH points to get a benefit from your home resort there. You would be better off selling than using them for cruises and the like but that's an option (DCL, etc) that makes more sense in your situation than it does for most that ask about it.

Dean, one other question and I know it's pure speculation. My all-time favorite resort is the Polynesian. Since buying DVC we don't stay there anymore, but if there was ever a resort to be built there, I'd purchase hands down. In your opinion, will they ever build there? Again, it's just opinion.

No way to know but it's possible and if it happened, it'd likely be a resort you'd truly need to own at to use.

 

[Sandisw]

I think owning at WDW is important if you are finding that you really want to use points at WDW. It allows you to have those extra months to book at WDW since HH points can ONLY be booked 7 months out.

If you really want to have points that you feel will be used more (and it sounds like you do), I would sell and re-buy at WDW. You mention both SSR and AKL as choices. SSR, through resale right now (passing ROFR between $67 - $75/ppt) is a great deal and you may want to consider buying some points there that way, and then doing an add on at AKL through Disney (no closing and possibly incentives) if both places are of interest

Of course, if having just SSR as your home resort is fine with you, then you could possible pick up that via resale for possibly as little as $25/ppt more, bring your additional costs closer to $5000. The lower MF would save you as well so not that bad of a deal to upgrade points that are now usable at the place you see yourself vacationing and have an additional years attached to them.

Good luck!!!!