Am I understanding this correctly?

[AnnaKristoff2013]

then this would be an absolute low point in resale. The best time to buy and actually have those contracts appreciate in value. Maybe not the 2042s as much but those buying BLT or CCV or even SSR or AKV will have bought at rock bottom prices and will more than likely be able to sell those contracts at a rather decent profit in the near future.

Unless:
4. DVC creates a “trust club points” system that can book anywhere the trust owns, thus making individual resale resorts less desirable versus purchasing direct or resale trust points.
Lots of variables, nobody should buy DVC expecting it to increase in value. Buy to use it and assume if you ever have to sell it you’re going to take a substantial haircut and/or have it end up worthless (looking at you in a few years Vero Beach). If you manage to break even, or come close, bonus!

 

[TheDailyMoo]

Unless:
4. DVC creates a “trust club points” system that can book anywhere the trust owns, thus making individual resale resorts less desirable versus purchasing direct or resale trust points.
Lots of variables, nobody should buy DVC expecting it to increase in value. Buy to use it and assume if you ever have to sell it you’re going to take a substantial haircut and/or have it end up worthless (looking at you in a few years Vero Beach). If you manage to break even, or come close, bonus!

Oh absolutely. Was just throwing out a scenario where resale once again appreciates like days of yore. But you're right add that "trust" variable in and it's all out the door. Like I mentioned in the 2042 thread we bought in to AKV and BCV to ride it out till the end. Especially BCV. I's nice knowing there's a bit of a safety net there with resale but it's definitely wasn't a factor in purchasing...on our end anyway. Other's MMV

 

[MerlinandtheMouse]

it’s been 10 years since we owned DVC (150 at BW). The Disney itch has not left me, and the desire to stay in deluxe is strong, so I’m looking into buying it again. 2042 is too close to consider a resale at BW, so I’m looking at BLT for a resale. As I understand it, if I buy BLT resale I cannot stay at Riviera, but all other DVC resorts are open to me? Future ones may or may not be depending on the condo association?

This is so different than when we bought direct in 2006. I was strongly considering Riviera but the restrictions for resale are too off-putting. I need to be able to tell my husband that we can sell it like we did last time. I don’t feel like that would be an option with Riviera.

This purchase is at least 6 months off, but I’m doing my research. My fave resorts are WL, BW, and BC, so I’d be happy being able to stay at any of those. Only one I don’t really care for is SSR.

Both BLT and CCV are due for their refurbishments by 2025 (BLT is much needed) so that’ll be a nice boost for both and you’ll probably get some good deals up until then

 

[Juliet25]

Unless:
4. DVC creates a “trust club points” system that can book anywhere the trust owns, thus making individual resale resorts less desirable versus purchasing direct or resale trust points.
Lots of variables, nobody should buy DVC expecting it to increase in value. Buy to use it and assume if you ever have to sell it you’re going to take a substantial haircut and/or have it end up worthless (looking at you in a few years Vero Beach). If you manage to break even, or come close, bonus!

I totally agree. I wouldn’t buy DVC with any goal towards making money.

 

[nw6675]

We spend a LOT on rental points, but just don't understand the allure of buying.

 

[tom1944]

We spend a LOT on rental points, but just don't understand the allure of buying.

For us I wanted to own so we were committed to take a vacation

I realize that is not a problem for most people but it is for us

 

[sndral]

We spend a LOT on rental points, but just don't understand the allure of buying.

It was because I was spending a lot on accommodations at WDW (in my case 2 deluxe rooms annually) & at the time Disney hotel room costs were going up faster than inflation & hotel discounts were very hit or miss that made owning DVC attractive to me. Plus, back when I bought, cheaper resale still had many of the benefits that’ve now been removed.
Having control of my reservation & not dealing w/ the risk of renting from a stranger also appealed to me.

 

[Brian Noble]

When I consider a timeshare purchase, I am usually looking at it only for personal use, and expect to want to use it for at least the next 15-20 years. I assume that the only thing I will get is what exists in the contract at the moment I buy it. Future resorts or non-contractual perks aren't part of the value equation, because they might or might not be available to me tomorrow, let alone five years from now. I also do not assume that there will be any residual value when I am ready to dispose of it--I assume it will be worth roughly zero when that time comes. If there is some value left, great! That's gravy. Even if there is some nominal value, it will have been subject inflationary loss plus the cost of capital between now and then, so it's easiest to just ignore it.

In other words, I expect to get nothing other than the ability to stay in the resort(s) contractually guaranteed to me, subject to availability and my capacity to plan ahead. Plus, every penny I put into it is spent money that is gone forever. If, after all that, the value still seems to be there, then I buy it.

This is admittedly a conservative approach--very conservative. But, it has two major advantages. One: I am never disappointed by future changes in perks, access, or resale value; only pleasantly surprised. Two: it makes it harder to justify a luxury purchase that isn't paid for out of money I genuinely will never miss. Not impossible mind you, but harder.

 

[Brian Noble]

For us I wanted to own so we were committed to take a vacation

I think this is a very under-rated reason for buying a timeshare.

I bought my first one when my kids were eight and six; they are now 25 and 23. Over time, I added to the portfolio. I can think of a number of vacations that we took because we had some timeshare assets burning a hole in our pockets, and these are vacations I am certain we would never have taken otherwise.

This is pretty important, because I am one of those people who put far too much stock in "success" and if left to my own devices would have been hard pressed to take many vacations at all. During one of my untenured annual reviews, my Department Chair asked me what I was doing for vacation that summer, and I thought the right answer was "Oh, I don't take vacations." To his immense credit, he told me that he insisted I take some time off. Furthermore, my partner at the time was already a take-vacation person, so I still went on them, though sometimes it was begrudgingly.

But, over many years my perspective on vacations started to change, and they became quite important. Would that have happened without being a timeshare owner? Maybe. But, probably not to the same degree. I'm glad I don't have to have run the experiment to find out.

 

[davidhr]

When I consider a timeshare purchase, I am usually looking at it only for personal use, and expect to want to use it for at least the next 15-20 years. I assume that the only thing I will get is what exists in the contract at the moment I buy it. Future resorts or non-contractual perks aren't part of the value equation, because they might or might not be available to me tomorrow, let alone five years from now. I also do not assume that there will be any residual value when I am ready to dispose of it--I assume it will be worth roughly zero when that time comes. If there is some value left, great! That's gravy. Even if there is some nominal value, it will have been subject inflationary loss plus the cost of capital between now and then, so it's easiest to just ignore it.

In other words, I expect to get nothing other than the ability to stay in the resort(s) contractually guaranteed to me, subject to availability and my capacity to plan ahead. Plus, every penny I put into it is spent money that is gone forever. If, after all that, the value still seems to be there, then I buy it.

This is admittedly a conservative approach--very conservative. But, it has two major advantages. One: I am never disappointed by future changes in perks, access, or resale value; only pleasantly surprised. Two: it makes it harder to justify a luxury purchase that isn't paid for out of money I genuinely will never miss. Not impossible mind you, but harder.

This is exactly my approach. I consider the purchase price gone as soon as I pay it and (in my analysis) the price I’ll get if I need to get rid of it (or use it until the end of the contract) is $0. If I’m ok paying that much for what I get, I go ahead.

That’s why things like what’s happening with Poly 2 now don’t bother me too much. It’s really not affecting the value I assigned to my contracts, because, at least for now, the value will be at lease $1 more than $0.

 

[Robbie Cottam]

Based on what everyone on here seems to think even though I don’t think it’s had a significant impact, selling out the resort faster.

Great, and with the economy where it is right now, I would agree with you,

But your premise was IF the economy was roaring,

If the economy was roaring, Disney could continue a take it or leave with restrictions, couldn't they?

Again, If the economy was roaring, wouldn't the resale prices climb back up?
And if people are buying resale even though they don't have access to all the resorts, does that imply that people who wanted access to the restricted resorts would pay more to get it???

Hypothetically, again

 

[PetePanMan]

I also do not assume that there will be any residual value when I am ready to dispose of it--I assume it will be worth roughly zero when that time comes.

i get what your saying but do wonder if renting points might be better if this is a key assumption

 

[Robbie Cottam]

We spend a LOT on rental points, but just don't understand the allure of buying.

It simple,

If you are going to use the points it’s cheaper to own than to rent,

I purchased most of my points for less than 100 per point direct….
At this point vacations cost me dues….

That said, If you have the time and flexibility to find people with distressed points, and can use those points where and when available….
You could realize a huge savings…

Now if you’re lucky enough to be able to do that, owning points might not be for you…

 

[Brian Noble]

i get what your saying but do wonder if renting points might be better if this is a key assumption

I don't think so. In the limit, a DVC ownership is worth zero, because it expires. And, there is a case to be made for ownership over renting. The only question is what is the time horizon. MouseSavers has a pretty good analysis* of this and it does not consider residual value.

https://www.mousesavers.com/other-disney-vacations/disney-vacation-club/#opportunity

This feels very counter-intuitive, but that's mostly because it's not always easy to wrap one's head around the time value of money.

------
*: The main quibble I have with MS is that they don't always compare like-to-like. The rent-every-other-year scenario is only about half the points vs. the purchase scenario, so of course purchasing looks bad.

 

[SG131]

it’s been 10 years since we owned DVC (150 at BW). The Disney itch has not left me, and the desire to stay in deluxe is strong, so I’m looking into buying it again. 2042 is too close to consider a resale at BW, so I’m looking at BLT for a resale. As I understand it, if I buy BLT resale I cannot stay at Riviera, but all other DVC resorts are open to me? Future ones may or may not be depending on the condo association?

This is so different than when we bought direct in 2006. I was strongly considering Riviera but the restrictions for resale are too off-putting. I need to be able to tell my husband that we can sell it like we did last time. I don’t feel like that would be an option with Riviera.

This purchase is at least 6 months off, but I’m doing my research. My fave resorts are WL, BW, and BC, so I’d be happy being able to stay at any of those. Only one I don’t really care for is SSR.

What are your thoughts on the Polynesian? They will be opening the new tower for direct sales in the next year. It's part of the old poly association, so a few less years on the contract, but on the plus side it won't have the same restrictions as Riviera. I don't mind not being able to stay at new resorts so I'm ok with my restrictions, but it sounds like you may feel like you're missing out.

 

[walt34]

I don't think so. In the limit, a DVC ownership is worth zero, because it expires. And, there is a case to be made for ownership over renting. The only question is what is the time horizon. MouseSavers has a pretty good analysis* of this and it does not consider residual value.

I've played around with this in the past. If you work with the assumption that your contract is worth zero after 15 years (which you've hinted at in an earlier post), you are getting pretty close to renting points being more cost effective - at least if you bought direct recently ($200 per point divided by 15 years is $13.3 + dues assumed at $7.5. is $20.8). You are moving ahead again if the yearly price increases stay the same for dues and for the rented points (as this won't affect the purchase price component ), you fall behind again if you factor in cost of capital for the original purchase (you'd probably have to add some kind of depreciation mechanism for this which will reduce the cost of capital as you 'consume' value).

If you assume 40 years or more of value (or bought resale at a lower cost) then the calculation is of course more beneficial. All of this ceteris paribus, which is a dangerous assumption with DVC.

 

[AnnaKristoff2013]

We spend a LOT on rental points, but just don't understand the allure of buying.

Flexibility. I don't like the idea that if one of my kids gets sick then I am out several thousand dollars (and I don't trust at all that trip insurance will pay out on points rented from a timeshare owner).

 

[Brian Noble]

15 years [...] you are getting pretty close to renting points being more cost effective

This is just about exactly the break-even point in the MouseSavers analysis, though they use a different way to get there.

That doesn't make them equivalent. Owning has the advantage of better cancellation/rebooking terms, plus less time invested vs. finding a rental. Renting has the advantage that you can decide in five years you want to skip WDW for a while, and there's no penalty for doing so.

 

[walt34]

That doesn't make them equivalent. Owning has the advantage of better cancellation/rebooking terms, plus less time invested vs. finding a rental. Renting has the advantage that you can decide in five years you want to skip WDW for a while, and there's no penalty for doing so.

I agree completely.

 

[Robbie Cottam]

Depending on what price you want to compare with, my personal break evens have been between 8 and 12 years. 15 years is a safe number.

I had one comparison where my Riviera points broke even at five years.... but I used a full-blown rack rate...

The good news for me is most of my contracts are 15-plus years old.