Are multiple "small" contracts a good idea?

[jerivera]

Ok. Would this be a good idea?

Instead of buying one large DVC contract (say, 300 points), purchase two small-ish contracts (160 points each) in two different resorts. Then use only one of the two contract points every other year, and bank the points the year they are not used. So, each year you'd have 320 points in one contract to use, and "zero" on the other.

That way, you have the flexibility of:

1) Going to Disney every year with aprox. 320 points to use.
2) If you don't need the points in the future, you can sell one of the two contracts.
3) You have two home resorts.
4) If you "outgrow" one of the resorts (kids don't like, say, the clown pool or something), you can sell that contract and add to the other.
5) If you need to do a "family gathering" type of vacation, you can pool in points from both contracts.

Anyone doing this?

I'm assuming that the one downside is that if you need to cancel your vacation, you lose the banked points from the previous year. But other than that, anything else I should keep in mind?

Is there a benefit to doing a large contract instead?

Thanks in advance!

 

[bobbiwoz]

We like to have the home resort advantage and so we own at the resorts where our family most likes to stay. The resort of choice changes at different times of the year. Very often I'll book the main 2 bedroom at 11 months, and right at 7 months try to move a studio or two to the resort of choice. I've never had to have people stay in 2 resorts, but it could happen.

People have found that it's easier to sell a contract that doesn't have too many points. So, 160 is right at the level I would stop at. I think you have good ideas.

Our most recent family gathering type vacation was over the 4th of July. Our group included 15 different people, with part at Vero and the other part at BCV. Not all people were at each part, but 7 of us were. It was a great vacation, and we next plan to do something just like that again in 2012. We did use a lot of borrowed points for that trip!

Bobbi

 

[Dean]

Ok. Would this be a good idea?

Instead of buying one large DVC contract (say, 300 points), purchase two small-ish contracts (160 points each) in two different resorts. Then use only one of the two contract points every other year, and bank the points the year they are not used. So, each year you'd have 320 points in one contract to use, and "zero" on the other.

That way, you have the flexibility of:

1) Going to Disney every year with aprox. 320 points to use.
2) If you don't need the points in the future, you can sell one of the two contracts.
3) You have two home resorts.
4) If you "outgrow" one of the resorts (kids don't like, say, the clown pool or something), you can sell that contract and add to the other.
5) If you need to do a "family gathering" type of vacation, you can pool in points from both contracts.

Anyone doing this?

I'm assuming that the one downside is that if you need to cancel your vacation, you lose the banked points from the previous year. But other than that, anything else I should keep in mind?

Is there a benefit to doing a large contract instead?

Thanks in advance!

It can be a great option for the right person. The main negatives are that you have separate deeds if you need to change them and the cost of getting there to start with. If you buy retail, you're paying retail prices; if you buy resale, you have multiple closing costs and a higher per point purchase price since smaller contracts tend to fetch a higher price. In principle it's a great idea but the devil is in the details.

 

[Sandisw]

Ok. Would this be a good idea?

Instead of buying one large DVC contract (say, 300 points), purchase two small-ish contracts (160 points each) in two different resorts. Then use only one of the two contract points every other year, and bank the points the year they are not used. So, each year you'd have 320 points in one contract to use, and "zero" on the other.

That way, you have the flexibility of:

1) Going to Disney every year with aprox. 320 points to use.
2) If you don't need the points in the future, you can sell one of the two contracts.
3) You have two home resorts.
4) If you "outgrow" one of the resorts (kids don't like, say, the clown pool or something), you can sell that contract and add to the other.
5) If you need to do a "family gathering" type of vacation, you can pool in points from both contracts.

Anyone doing this?

I'm assuming that the one downside is that if you need to cancel your vacation, you lose the banked points from the previous year. But other than that, anything else I should keep in mind?

Is there a benefit to doing a large contract instead?

Thanks in advance!

I think it is a great plan for all the reasons you mention. And, given that you are talking buying in with 160 points at each resort, that really gives you the opportunity to book full stays.

 

[csharpwv]

I posted a similar idea like this about a year ago - and one of the most 'profound' points that surfaced was the Bank+Borrow+Use isn't a 100% guarantee - they could 'revoke' that right I guess - but I'm sure it would come with significant outcry!

But - we have a contract that we are doing that with - we bought what I like to call out PERFECT SSR contract. It's 85 points - and its use year is consistent with our other two contracts. That gives us 255 points every three years. It's pretty safe to say that that will 'always' be enough to use at Saratoga for something regardless of where point charts might head in 10-15 years.

In the post I made last year - I posed the thought of having three smaller contracts bought a year apart so you would always be in the bank - borrow - use cycle and you would have enough points (based on your original purchase) for whatever you wanted - whenever you wanted it. The problem here is that you would almost 'HAVE' to use or rent them every year or risk throwing the whole 'system' out of order.

I think it is a GREAT idea - and it gives you home resort advantage at three resorts, and allows you to stay in a different resort each year. PLUS this gives you an over lap year on each contract where you could pool ALL 3 years of your points from one contract, 1-2 years from the next, and 1-2 year from the last contract if you want to take a cruise, an Adventures By Disney Trip - or a MAJOR booking for a family reunion in a Grand Villa or possibly two tree house villas.

If you take a look at the resale sites, you will see that the smaller a contract is - the higher the cost per point. In addition, smaller point contract sell much faster it seems.

I think it's a great idea - and it's something I wish we had though of before we bought our first two contracts - but hey - as it is now - we have enough points to stay in a 1BR on just about every trip - which is awesome - since the DW LOVES jacuzzi tubs!

I often pose the 'what if' questions to DW - just did that yesterday when we got the Aulani mailer. "If we buy the mimium which is 50 points..."

And three contracts later - the blanket response is "NO!"

It's all about how you plan to vacation!

 

[Drudge]

If you are buying direct from Disney then maybe you can think about even smaller contracts like say 50-60 points ea since you don't have to pay closing costs.

 

[jerivera]

If you are buying direct from Disney then maybe you can think about even smaller contracts like say 50-60 points ea since you don't have to pay closing costs.

I thought the minimum Disney purchase was 160 points? Has that changed? I just scanned their literature (and several websites), but 160 still seems to be the # out there.

 

[Sandisw]

I thought the minimum Disney purchase was 160 points? Has that changed? I just scanned their literature (and several websites), but 160 still seems to be the # out there.

Yes, they have been allowing people to buy in with as little as 50 points. But, even if you buy 160 points, you can always ask that those points be put into smaller contracts--50, 50, and 60 or 100 and 60, etc.

This allows you the opportunity to sell points down the road if you have too many without having to sell everything.

And, smaller point contracts go faster and for a little bit more typically than larger ones.

 

[a742246]

I think by going with the smaller contracts you will give yourself more options in the future ( lets say when your children get older you can transfer ownership to them).

 

[hbehrman]

Yes all the points above are valid and good ones.

We just bought in at SSR at 150 points with three 50 point contracts all with October UY. We probably would have gone resale however, I was looking at smaller contracts resale and determined for our circumstances that it would be better direct. One of the factors why we went direct was that we did not have to pay closing costs for each contract, which we would have to do if we went resale (and if we could find 3 contracts with same Oct UY). This was only one factor of why we went direct. In the future we will probably go resale with one to three additional contracts with UY October with point values from 25 to 100.

 

[JimMIA]

I don't think I would ever go smaller than 100 points, and then only if I was wanting to get home resort booking advantage at a particular resort, or I was just buying one small contract to get started.

I think smaller contracts are yet another example of "conventional wisdom" that proves not as worthwhile in the real world as it sounds in theory.

Yes, there may be an advantage when you sell, but if you're already looking at selling, maybe you shouldn't be buying in. Realisticallly, if you keep a DVC contract 20 years or so, it may be worth zero resale...like many other timeshares are now.

The downsides of smaller contracts are considerably higher buy-in prices, and really big differences if you're buying both small and direct from Disney. BLT direct prices are $20-25 per point higher than resale for <100 points, for example. There are also higher costs getting out because of estoppel and ROFR fees.

And in between, you have the hassle of managing multiple contracts -- which is an issue even if they are all the same UY. You have to consider the point total, banking deadlines, banked and borrowed points, etc, etc, with every reservation transaction, and that's a PITA. We've had MS mistakes twice between our two contracts that took time and effort to fix, and would have caused us to lose points if we hadn't noticed the mistakes afterward.

There is always the risk that DVC could decide to allocate some kind of administration fee per contract. If they chose to, that would be a legitimate fee because every contract has a certain amount of overhead whether it's 500 points or 50. Multiple small contracts cause DVC additional expense, and they might decide to recoup that later as many other timeshare systems do. Many timeshare systems even charge higher MFs for smaller contracts (sometimes much higher), and there is no reason why DVC couldn't start that as well.

As far as the inheritance (splitting between children), that assumes that your kids will a) want DVC X years down the road, and b) will want the financial burden of their inherited annual fees.

 

[PoohNFriends]

Ok. Would this be a good idea?

Instead of buying one large DVC contract (say, 300 points), purchase two small-ish contracts (160 points each) in two different resorts. Then use only one of the two contract points every other year, and bank the points the year they are not used. So, each year you'd have 320 points in one contract to use, and "zero" on the other.

That way, you have the flexibility of:

1) Going to Disney every year with aprox. 320 points to use.
2) If you don't need the points in the future, you can sell one of the two contracts.
3) You have two home resorts.
4) If you "outgrow" one of the resorts (kids don't like, say, the clown pool or something), you can sell that contract and add to the other.
5) If you need to do a "family gathering" type of vacation, you can pool in points from both contracts.

Anyone doing this?

I'm assuming that the one downside is that if you need to cancel your vacation, you lose the banked points from the previous year. But other than that, anything else I should keep in mind?

Is there a benefit to doing a large contract instead?

Thanks in advance!

I don't have personal experience with splitting a contract, I just have a small contract at AKV because that's where we wanted to purchase and an even smaller add-on at VGC because I think it will be hard to book at 7 months here at times so I wanted to have that 11 month window. There is just 1 thing I wanted to add to your question that I don't think was said yet. Yes, if you have a 160 point contract at each resort you will have a total of 320 points per year. However, you cannot combine the 320 points to book at one of your home resorts at the 11 month mark. You could use 160 at 11 months at the home resort those points belong to and bank the other 160, use the other 160 for another trip, add onto your current trip at 7 months, try to switch resorts completely at 7 months (to use all 320)...
For example, I could not use my banked AKV points for my reservation at VGC at the 11 month mark; only at the 7 month mark could I use my AKV points at VGC.

Hope that helps in case you weren't aware of that piece of it.

 

[spiceycat]

when sold OKW had 190 contract and 50 contract.

the 50 contract sold the first week for more money than I listed. (disney had rofr one similiar and they really wanted it)

the 190 points sat there - had to lower it twice to sell it.

so when brought blt got my 170 in 60, 60, 50 - so very happy with it and if the worst happens it will be easier to sell. (hope never but you can't tell)

have 60 at vwl in one contract - which now need to bank and borrow to stay my 5 days.

also have 50 bwv in two 25 contracts. this is my least favorite brought it for access to epcot and studios. so brought the contracts several years apart. so far it is still enough for my 5 days stay.

smaller contracts are a good selling point for DVC. It cost DVC more - but it definitely helps members. you only pay closing on the first one. since mind were add on don't think I pay closing - will look.

plus for those of us who are almost poor- it makes it easier to pay off several smaller contracts than one big one.

some people here don't have to budget - they consider a kitchen a nice place to visit - and other things that some of us have to do.

 

[DenLo]

The only problem I see with multiple small point contracts (25 - 75 points) is that if later you decide to sale all of the contracts at one time, you could lose a lot of money with fees and closing costs. You might make up some of that loss because smaller contracts frequently sell at a higher rate per point than contracts of 175 points or more but it could be a wash. And again others have stated that smaller contracts sell quickly. However, I noticed that many still sold their larger 200 plus point contracts, it just took longer. The contracts that have difficulty selling are the ones for 500 points or more.

I think that contracts of 160 points or less sell pretty quickly. And contracts of 100 points or less sell very fast.

In the POS (Public Offering Statement) for Aulani, I noticed that Disney has put in a clause that states the DVD has the right to charge $250 for a ROFR fee. I think this clause is a reaction to all of the small DVC contracts out there. It does cost them as much to process a small contract as a large contract. But the small contracts have a higher turn over rate. People buy the small contacts with the intent to sell them later.

 

[Dean]

The only problem I see with multiple small point contracts (25 - 75 points) is that if later you decide to sale all of the contracts at one time, you could lose a lot of money with fees and closing costs. You might make up some of that loss because smaller contracts frequently sell at a higher rate per point than contracts of 175 points or more but it could be a wash. And again others have stated that smaller contracts sell quickly. However, I noticed that many still sold their larger 200 plus point contracts, it just took longer. The contracts that have difficulty selling are the ones for 500 points or more.

I think that contracts of 160 points or less sell pretty quickly. And contracts of 100 points or less sell very fast.

In the POS (Public Offering Statement) for Aulani, I noticed that Disney has put in a clause that states the DVD has the right to charge $250 for a ROFR fee. I think this clause is a reaction to all of the small DVC contracts out there. It does cost them as much to process a small contract as a large contract. But the small contracts have a higher turn over rate. People buy the small contacts with the intent to sell them later.

Traditionally the buyer has paid the closing costs and smaller contracts have brought higher prices. That may change with 2 recent DVC changes, the ability to rent a few points and the smaller buy ins at some resort, but time will tell. Overall I think multiple smaller is better than larger up to a degree. I have a 100 pt (4*25) at AKV but when I bought it my intent was to sell 3 & keep one 25 pt contract. I would likely have done 2 50's or one 100 had I know I would be keeping them all for a while.

 

[jerseygal]

When we bought, Sept.2008, min purchase was 160, but we split the 200 into 2 separate contracts...100 each...

My thoughts...Firstly, we felt that if we needed to sell, then we could more easily sell a smaller contract and if we wanted to sell, we would sell 1 and keep 1 contract of 100 points...

Secondly, 2 DS...one son will be deeded 1 contract of 100 in will and other contract will be deeded other contract of 100 points!

LOVE MY DIS!