Best Economical DVC Resorts to Purchase: Spring 2021

[DisneyFanatics6]

Wow, $125 would be great. The link shows Poly at $158 pp avg, so really high imo. Perhaps $125 was for very big contracts? Also, since Disney is buying Poly back right now, $125 may not pass ROFR...

I highly doubt it would. I just had one take at $135/pt and it was stripped.

 

[MICKIMINI]

If that's your standard, then just buy cheap SSR and unload it in 5-10 years. Less buy in, and the investment income matters a lot less on a smaller timeframe and smaller buy in. In my math, even if SSR tanked an unprecedented amount, I would at least break even. Everyone acts like you have to hold DVC forever, because that's the way it's sold. But no reason you can't buy the cheap seats now and get rid of them when you are done with Disney. And geez my DVC did better than any bond fund I had.

The investment income starts to matter when this is a decades long discussion.

I totally agree! We been in since 1996 and flipped eight profitable contracts. We currently own six and in ROFR for a seventh. We never subscribed to the "own it forever" line and if we can sell a contract and make a decent profit and purchase another when we find a deal, we continue along. Buying a fully loaded contract with many points with no fees and renting (yes, taxes considered) brings the buy in per point down.

We just won't pay crazy prices for contracts and have always been able to find good deals which to us means it provides immediate points for use or rent and there is enough meat on the bone to flip at the appropriate time. Some of our recent deals are up 35-45% in the past two to six months, not taking into account "free" points.

Figure out how you will use DVC now and in the future and look for an offramp if something goes wrong in your life. Enjoy it for what it is. Don't get emotionally attached so you can profit if the opportunity arises...there are always lots of resales. You make your money when you buy, not when you sell IMO.

I appreciate everyone's opinion on this subject and this is just my experience!

 

[zeferjen]

Meh we bought SSR in 2010 when we were still in a serious economic downturn. I really didn't want to stay there but it was the best value then ($65/pt resale before the real restrictions went into effect). We have never stayed at SSR. Now that's not to say that I wouldn't/couldn't but so far we have been very lucky with booking at 7 months and/or waitlisting. We saved a lot with that decision and I have no regrets. Now that kids are older, being near Disney Springs wouldn't be the worst thing in the world anyway so it has worked out for us.

 

[RoseGold]

I think AKV is ‘good value’ but I do hope they offer contract extensions like OKW eventually

I wouldn't hold your breath for that. Just go read the old posts where they unleashed the lawyers on OKW. If they do offer an extension, it will be repackaged into a "new" resort with a new chart.

 

[happythoughts & pixiedust]

This analysis is a good starting place for a lot of people looking to buy resale and actually does a remarkably good job approximating the comparative "hold to contract expiration" value of the different DVC resorts.

It does not do a good job helping to figure out "equivalent cost per room-night" - IE how much you could spend on alternate accommodations had you not bought in to DVC. To get that number, add at least 20% to the "total cost per point per year" numbers and then multiply that cost by number of points per night at your desired resort.

A true present-value analysis that utilizes reasonable discount and inflation rate assumptions will give a much more accurate picture because it fairly factors in the opportunity cost/time value of money. Interestingly, however, under reasonable assumptions (6-7% discount rate and 3% inflation rate), the in-depth Present Value analysis ends up coming out very close to these rankings with two notable exceptions - Aulani usually moves up to #2 (because it's cheap for a contract with so many years remaining) and Grand Californian moves into last place (because it's so costly upfront).

Assuming a very high discount rate (10%+) (rate of return for an alternate investment) will put the lower priced contracts higher up the list (Vero, Hilton, OKW). So if you want to own DVC, but think you're a great stock picker and will earn 10-15% or greater annually on your investments, and will hold your contract to expiration, Vero, Hilton Head, and OKW are probably the best.

If you're more conservative and don't want to assume you'd make a huge return on the cash you'd otherwise put into DVC, the higher priced, longer term contracts (Poly, Copper Creek, Bay Lake, and Grand Floridian) are your better bets.

What this analysis does not take into consideration at all is resale value. Most people (probably less than 10%) will not hold their contracts to expiration. Resale value will play a HUGE part in determining the overall cost of each DVC room-night during the time you hold your contract. Let's say you buy Saratoga instead of Grand Floridian because it's so much cheaper up front. You hold it 20 years, and then decide to sell - it's likely that Grand Floridian will sell for FAR MORE than Saratoga will at that point because Grand Floridian will still have 23 years on the contract and Saratoga will only have 13. Your room-night cost in the above example would be way lower with Grand Floridian because you'd recoup much more of your original investment when you decided to sell. Following that same train of thought - those who own Beach Club right now would do very well to sell their contracts and buy Copper Creek or Polynesian - a transaction that could essentially amount to an even exchange and would result in the Beach Club owner gaining 26 additional years. In 21 years when their Beach Club contract is worth 0, the Copper Creek or Poly would be worth far more.

Bottom line, buy where you want to stay. There's no telling how your investments will perform, what inflation will be, which resorts' dues will increase more than others, which resorts will have the best resale value, and when you might want/need to sell. At the end of the day the cost per room night isn't that different between the most and least expensive contracts (~$4/pt. max from bottom to top - $50-$100/nt. on studios) and you may think you're "doing the right thing" by making a concession about where you want to stay to buy the "best value" contract and it may not turn out to be the best value at all. I think the only thing we can clearly discern here is that the 21 year contracts have to start declining in value, and will likely do so rapidly as they approach expiration.

 

[Lee Matthews]

I wouldn't hold your breath for that. Just go read the old posts where they unleashed the lawyers on OKW. If they do offer an extension, it will be repackaged into a "new" resort with a new chart.

Lawyers? Oh, I just read cheap add-on of years which hardly anyone took up

 

[RoseGold]

Lawyers? Oh, I just read cheap add-on of years which hardly anyone took up

Maybe. Plenty of people out there who never signed the quitclaim and never gave Disney the money. I guess we will see what happens to them in 2042. The old threads are very eye-opening: people being given quitclaims to sign at check in, threats on both sides, lots of lawyers. Plenty of opinions that weren't the Disney party line. Anyway, I doubt they try this again but anything is possible.

 

[Galun]

A true present-value analysis that utilizes reasonable discount and inflation rate assumptions will give a much more accurate picture because it fairly factors in the opportunity cost/time value of money. Interestingly, however, under reasonable assumptions (6-7% discount rate and 3% inflation rate), the in-depth Present Value analysis ends up coming out very close to these rankings with two notable exceptions - Aulani usually moves up to #2 (because it's cheap for a contract with so many years remaining) and Grand Californian moves into last place (because it's so costly upfront).

You don’t have to assume discount rates and inflation. You can just model out the cash flow over the years and calculate the internal rate of return. Year 0 is negative cash flow in total purchase cost. Year 1 till contract terminal is your rental yield in rental price per point minus maintenance cost per point. Terminal value is zero. You just have to assume maintenance fee inflation and rental price increase over time. Then you buy the one with the best internal rate of return.

SSR is by far the best, VGC is actually surprisingly decent because your rental yield is so much larger (rent at $19pp and maintenance at $6.99pp), coupled with later expiration in 2060. It’s not great but it’s not that bad either.

I only own one 2042 expiration in BWV, and the pricing behavior does boggle my mind... during my ownership the usable contract life declined by 1/3 and the value had doubled... which I think is more reflective of the value in the underlying product (prime location).

 

[Duck1]

Only if you consider "bang for buck" based on number of nights and only if you stay at those resorts.
If you buy OKW as your home resort, but you intend to use all the points at GFV, you will get horrible bang for your buck.

But I also see it as.... a Motel 6 has more "bang for the buck" than a Ritz, in terms of cheapest rooms per night.
So yes, those resorts have the cheapest points and the cheapest point charts but only great bang for the buck if you actually want to stay in those resorts.

So "bang for buck" really needs to be examined a couple different ways...
"Bang for buck" for accumulating points to use elsewhere: Here, you want the cheapest points AND lowest dues. SSR is the major winner here. Yes, Poly has lower dues and more years, but the initial costs are MUCH higher. So throw in the time value of money... SSR really leads by quite a bit.

Best "bang for buck" for home resort, with intent to stay at the home resort -- That's too subjective to really analyze. Strong argument could be made for AKV -- long contract, fairly cheap points, and unique room offerings with value rooms and club level rooms.
Strong argument could be made for Riviera -- even direct -- with direct points cheaper than some resort resale points and 49 years left on the contract.
BLT's long contract and semi-low point chart, making it the most affordable monorail resort, makes it a bang for buck contender.

Good day. Just curious about your comment about it not being a good value to purchase somewhere like okw and using it at vgf. Why is that not a good idea? Our home resort is vgf and I was considering buying more points at perhaps ssr because of the lower cost up front. My plan was to use these points for one bedroom at vgf. I suspect that I should be able to get some availability at the 7 month mark but appreciate it is not a given and depends on the time of year. So curious as to why that would not be a good bang for the buck. Thanks in advance!

 

[CarolMN]

I only own one 2042 expiration in BWV, and the pricing behavior does boggle my mind... during my ownership the usable contract life declined by 1/3 and the value had doubled... which I think is more reflective of the value in the underlying product (prime location).

The BCV/BWV Premium = the excess of the price paid over fair market value - aka the value of what the heart wants.

 

[Nabas]

The BCV/BWV Premium = the excess of the price paid over fair market value - aka the value of what the heart wants.

The thing is, even those contracts have 20 years left. I suspect that's good enough for many.

"I can't imagine where I'm going to be vacationing 20 years from now, but I can imagine wanting to vacation at BCV or BWV (or wherever) for the next 5-10 years."

At least, that's what I suspect is going through some people's mind.

 

[happythoughts & pixiedust]

I only own one 2042 expiration in BWV, and the pricing behavior does boggle my mind... during my ownership the usable contract life declined by 1/3 and the value had doubled... which I think is more reflective of the value in the underlying product (prime location).

Very true!

 

[happythoughts & pixiedust]

The BCV/BWV Premium = the excess of the price paid over fair market value - aka the value of what the heart wants.

So true! The dream of owning BCV/BWV is a wish your heart makes!

 

[happythoughts & pixiedust]

The thing is, even those contracts have 20 years left. I suspect that's good enough for many.

"I can't imagine where I'm going to be vacationing 20 years from now, but I can imagine wanting to vacation at BCV or BWV (or wherever) for the next 5-10 years."

At least, that's what I suspect is going through some people's mind.

Yes, I think when people hear 20 years it sounds so far out there most people don't really see a difference from 30 or 40. Once we get under 15 years and people start realizing they can't resell it when they are done using after 10 years prices will drop fast.

 

[zavandor]

I'm of the opinion that it does factor in the time value of money. You're purchasing tomorrow's vacation with today's dollars, but you're also assigning today's value to tomorrow's lodging. Unless you believe that your opportunity cost is greater than the rate at with the price of lodging increases, the simple calculation is entirely appropriate.

Let's put it another way: OKW expiring in 2042 (last points distributed in 2041) is currently worth $110, while OKW extended $117, according to that post. This means that the next 20 years at OKW are worth on average $5.50, while the next 15 years are worth less than 50 cents each.
Years nearer to us are worth much more than those 30 years from now. The value of the 12 extra years at Poly compared to SSR, (which are even further away than the extra OWK ones) is not the same as the next 10 years. Simply dividing the buy in cost by the remaining years is too simplistic and leads to the wrong conclusions.
That's why OKW owners massively rejected the extension offer, even when it was priced $15, $1 per year (rightly so, even now the extra years are valued by the market half that).

 

[supersnoop]

Let's put it another way: OKW expiring in 2042 (last points distributed in 2041) is currently worth $110, while OKW extended $117, according to that post. This means that the next 20 years at OKW are worth on average $5.50, while the next 15 years are worth less than 50 cents each.
Years nearer to us are worth much more than those 30 years from now. The value of the 12 extra years at Poly compared to SSR, (which are even further away than the extra OWK ones) is not the same as the next 10 years. Simply dividing the buy in cost by the remaining years is too simplistic and leads to the wrong conclusions.
That's why OKW owners massively rejected the extension offer, even when it was priced $15, $1 per year (rightly so, even now the extra years are valued by the market half that).

So what does your suggested amortization of value look like? If the last year at OKW is only worth $0.50/point in today's dollars, that makes it worth $1.41 in 2057 at 3%, or about $10 at 9%. I really think any point in 35 years is going to be worth way more than $10.

 

[Bjaiken77]

The data is accurate but perhaps the title is not. The information is useful but doesn’t tell the entire picture. I don’t have a problem with it. It’s one piece of information. I find it helpful as a tool.

 

[havoc315]

Good day. Just curious about your comment about it not being a good value to purchase somewhere like okw and using it at vgf. Why is that not a good idea?

Not a "bad value", just not necessarily "best bang for buck"

1 -- Many people equate value with low point charts.
For OKW, for a room tonight, it would be 14 points for a studio, 29 points for a 1 BR, 40 points for a 2 BR and 61 points for a Grand Villa.
For Grand Floridian, for tonight, 23 points for a standard view studio, 26 points for a lake view studio, 43 points for a standard 1 BR, 54 points for a lake 1 BR, 62 points for a standard 2 BR, 74 points for a lake 2BR, and 149 points for a Grand Villa.

So buying OKW points to use at OKW gives you a lot of space -- And you can get grand villa for the same price as a standard 2 BR at Grand Floridian.
Now, a Grand Floridian villa may be "worth far more than an OKW villa. But you are losing your "bang for the buck" aspect of cheap point chart if you are using those OKW points at Grand Floridian.

2 -- While the re-sale points are definitely much cheaper at OKW than GFV, you can't ignore the dues:
OKW $8.36 in dues, GFV $6.82 in dues. That's a difference of $1.54 per point. If you own 200 points, you're paying $308 extra per year by owning OKW points compared to owning GFV points. Now, considering how much you are saving in initial cost, the $308 per year may not be a big deal, but it does reduce the value. In contrast, SSR dues are just $7.11 per year, and SSR points are about the same price as OKW points.
So if your goal is to use non-GFV points at GFV, then the best "bang for your buck" is to get the cheapest points + cheapest dues.
And this is why SSR points are the best "sleep around" points. (Of course, this is also what causes the 7 month shortage.... I dare say most SSR owners (and OKW) are using the points just to sleep around at 7 months, which is why SSR and OKW are the only resorts that routinely have LOTS of available shorter than 7 months.

 

[sethschroeder]

I never put much in to the time of money stuff. I also wouldn't pull out retirement accounts to buy DVC though.

Even if I were breaking it down I did a rough historical run of the numbers based on a AKV purchaser who posted on this forum and by year like 11 they would be out of money.

Buying DVC for me just makes things way more predictable long term. Flip side if I start investing that money and pulling a portion out now I need to worry about yearly market fluctuations, taxes on money being pulled out, increases to DVC rentals, and lack of control on the points.

Also time of money I think is offset by not needing to buy another contract in 20-30 years. And lets be honest this math also completely ignores what happens when your contract expires or when you sell (which you will get more from AKV in 2038 then you will from BWV).

 

[zavandor]

So what does your suggested amortization of value look like? If the last year at OKW is only worth $0.50/point in today's dollars, that makes it worth $1.41 in 2057 at 3%, or about $10 at 9%. I really think any point in 35 years is going to be worth way more than $10.

Those extra years at OKW will be worth more in 20 years, but now they're almost worthless. It's not me saying it, it's the market that values them as such.
It all depends on what the takeaway is. If one is looking to purchase the cheapest resort for Sleep Around Point, that is still SSR. Sure, Poly has 12 more years to go, but those won't exist for 32 more years, by then we'll probably all be drowned because of global warming.