Buy a FL home...sell DVC????

[Nennie]

Anyone crunched the numbers???

We are considering purchasing a vacation home near Disney, but if we do so, the next question is what do we do with our DVC points? Sell the contract? Keep the contract, and rent out the points each year?

Only advantage to keeping DVC that I can think of, is the annual pass savings, but with a family of 5, that's $500 a year.

Can't get a FL resident AP, b/c we will still live in NJ, and won't be changing our drivers licenses, etc.

Just wanted to throw it out there, between the $$ gurus, and Disney lovers, thought maybe someone else had some good advice!!!!

(3rd option is keeping both and using both, but I just can't see myself enjoying staying in a DVC villa knowing that my vacation home is sitting empty down the street!!)

 

[nalajms]

Obviously buying a home will cost more. If you sell your DVC maybe it's enough for some of the down payment. Then you factor in insurance (including extra flood and hurricane insurance), property tax (you won't get the homestead exemption because you're out of state), and mortgage interest. Also home owners dues if you live in an HOA. I doubt your DVC dues are more than that.

You'd also have to factor in the risk of the property value not going up when you need to sell. My parents bought a rental home in FL in 2004. It is just now getting back to what they paid for, and that's before the housing bubble. And maintenance costs for things that break down

And if you decide to rent it out when you're not using it, it'll cost more to keep the utilities, internet, TV, etc on all year. The rental market is very saturated. I do not believe most owners are able to rent out their homes more than 30%-40% of the time.

Overall, I think a second home only works if you're spending a few months down there rather than a few weeks.

 

[aacvacation]

I don't know anything about real estate so I'll let others direct you there. But if you did buy the home, and have utility bills for that address, you are considered a part-time FL Resident and are qualified for those Disney discounts.

Link to that information: https://disneyworld.disney.go.com/planning-guides/in-depth-advice/part-time-florida-residents/

 

[Anthony1971]

A second home is nice...
if you are going to retire there in a reasonable period of time and can spend a good amount of time there now.
Renting it... you can not have anything nice inside.
Lastly it is always nice until.. bad weather who will take care of the house... repairs... ahh Florida hire a lawyer than a contractor it is that bad... living there you may know an honest one maybe 80/20 not living there you have a 50/50 chance...
DVC and home ownership are two different animals... DVC everything is done for you Home ownership... 1/4 vacation 3/4 maintenance.
As above if you will retire there in a reasonable amount of time as in 5 years at the most but otherwise I would say buy more points if you have more time

 

[JLKennedy]

We have tossed this around (also from NJ) and we feel IF we were to make a purchase like a DVC/vacation home, we personally would choose real, physical property, that had no sunset.

We have family members in who live in Naples and own several businesses in FL, hurricane insurance isn't mandatory for certain areas in FL, but is a good thing to have. These same family members in-laws just bought a condo in FL and have been successful in renting it out for roughly $800 per week. All that money goes into an account that they use for maintenance, repairs, etc. when they are ready to retire fully in 2 years, they're selling their home here and moving permanently.

To us, and our finances, (and this will be debated on here, trust that) real, physical property that we has no sunset is our best option and our preference.

 

[AnnaS]

Depending on the number of points, contracts you own - can you sell and buy or just keep a small contract to qualify for the AP discount?

Perhaps you qualify anyway as a pp posted a link.

Good luck!

 

[kiki02]

We have tossed this around (also from NJ) and we feel IF we were to make a purchase like a DVC/vacation home, we personally would choose real, physical property, that had no sunset.

We have family members in who live in Naples and own several businesses in FL, hurricane insurance isn't mandatory for certain areas in FL, but is a good thing to have. These same family members in-laws just bought a condo in FL and have been successful in renting it out for roughly $800 per week. All that money goes into an account that they use for maintenance, repairs, etc. when they are ready to retire fully in 2 years, they're selling their home here and moving permanently.

To us, and our finances, (and this will be debated on here, trust that) real, physical property that we has no sunset is our best option and our preference.

$800 a week, but many weeks go empty, and some months too -

 

[havaneselover]

Another consideration is Florida property tax. Because the state doesn't have income tax, the property tax can be high but varies tremendously based on locality. We were in Tampa and paying $10K / year on a $500K house and my parents were paying less on a house worth twice as much in Naples.

Insurance can definitely be a pain. A lot of insurers don't insure in the state so options are more limited.

 

[Traveliz]

All other considerations aside as a homeowner in Florida you do qualify for Disney's Florida resident prices. Check the link above...you will have the proper id as your out of state license will work alongside utility bills, banking statements, government mail, etc.

Liz

 

[ProudMommyof2]

DH and I are having a very similar conversation right now, except it is between buying DVC resale or a home that we would rent out when not there.

We are leaning toward DVC right now for 3 reasons.
1. With my DH being a teacher, week long escapes from the cold are not frequently possible. Having the flexibility of a long weekend or week long break from the cold, without much notice if we are flexible on resorts, is a point for DVC.

2. We are at least 15 years from retirement. While an Orlando home sounds awesome for retirement now, I do not want to bet we will feel that way then. As we have seen in the last several years, it is not a given that house values will will increase and we would be able to sell easily if our desires/needs change.

3. Even if you employ a rental agency, managing a rental property from out of state can be difficult.

Good luck in your deliberations.

 

[nugov2]

I would buy the FL home. It won't rent all the time, but if you can rent it half of the year for around $1000 a week that is $26,000 a year to help cover property taxes and other expenses. If you are getting a 3 bdrm that should be easy to get if it is in a desirable location. I'd look to getting something in Windsor Hills. Most of the property we looked at there was rented a lot because of the beautiful resort and how close it is to WDW. You can get a 3bdrm townhome for under 200,000. If you have good credit and money to put down you are looking at 900 a month for mortgage and another 1400- 1900 a month for insurance/taxes/utilities. That is about 27,600 a year to own the home...so it could cost you 1600- 7600 a year for your home. Obviously you have to furnish this home and there will be other hidden expenses, but you own this home and build equity vs DVC that is not really yours. I would ask yourself What do you pay a year for DVC and what would you be ok paying a year for a house?

 

[Anthony1971]

vs DVC that is not really yours.

DVC is yours it is a Deeded timeshare treated as a second home for Tax purposes. Yes it has an expiration date but after owning something for 55 years not having to pay to redo everything is a plus
As far as equity... I can back almost what I paid for my DVC 10 years ago and then have 10 years of vacation for what I paid in dues. Lastly you can rent DVC and make an nice profit and it is easy to rent...
for the sole purpose of vacations DVC is a better deal unless you vacation months out of the year.

 

[kiki02]

I would buy the FL home. It won't rent all the time, but if you can rent it half of the year for around $1000 a week that is $26,000 a year to help cover property taxes and other expenses. If you are getting a 3 bdrm that should be easy to get if it is in a desirable location. I'd look to getting something in Windsor Hills. Most of the property we looked at there was rented a lot because of the beautiful resort and how close it is to WDW. You can get a 3bdrm townhome for under 200,000. If you have good credit and money to put down you are looking at 900 a month for mortgage and another 1400- 1900 a month for insurance/taxes/utilities. That is about 27,600 a year to own the home...so it could cost you 1600- 7600 a year for your home. Obviously you have to furnish this home and there will be other hidden expenses, but you own this home and build equity vs DVC that is not really yours. I would ask yourself What do you pay a year for DVC and what would you be ok paying a year for a house?

1k a week??? where? how? That's a lot of money for 26 weeks. Please disclose this great location to invest in.

 

[Iowajes]

1k a week??? where? how? That's a lot of money for 26 weeks. Please disclose this great location to invest in.

Most of the 4-5 bedrooms homes we saw on vacationrental.com were renting at $1k per week. Of course, I doubt the owner gets all of that, as the service would get a cut.

 

[nugov2]

1k a week??? where? how? That's a lot of money for 26 weeks. Please disclose this great location to invest in.

Windsor Hills 3bdrm townhomes rent for up to $149 a night . My math may be rusty, but I believe 149x7(1 week) is $1043 a week. 1043x26 weeks(half of the 52 weeks in a year) is $27,118 a year. They can rent low season for about $700, but the ones that are decorated with Disney/Universal themes run on the high end and book up. I imagine you will have no problem renting it during peak time(high price point) and that would be when you would get a lot more money. I was just giving ballpark figures, but I guess technically you would consider that only 16 of your 26 weeks would be peak so the other 10 weeks if you only get $700 a week you'd still be looking at $16,688 for peak weeks and $7,000 off peak for a total of 23,688. Even if you go on the low end and only charge the $700 a week all year(I haven't seen a townhome rent for less than $100 at WH even off peak, but I admit I haven't looked at every single one) you are looking at 18,200 a year and that is saying that is all you rent out. WH is very popular, themed rentals the most popular there to rent. Look at some of those and their availability. They are booked a year out and have minimal availability all year. One of the townhomes we looked into(but went with a house) is already booked for 19 weeks from now through April 2015(the summer sold out besides one week). The one we used is already booked for 21 weeks from now until March of 2015(the summer is completely booked).

 

[kiki02]

Most of the 4-5 bedrooms homes we saw on vacationrental.com were renting at $1k per week. Of course, I doubt the owner gets all of that, as the service would get a cut.

A huge cut, plus taxes, and hoa fees, and insurance and maintenance and etc etc.

 

[kiki02]

Windsor Hills 3bdrm townhomes rent for up to $149 a night . My math may be rusty, but I believe 149x7(1 week) is $1043 a week. 1043x26 weeks(half of the 52 weeks in a year) is $27,118 a year. They can rent low season for about $700, but the ones that are decorated with Disney/Universal themes run on the high end and book up. I imagine you will have no problem renting it during peak time(high price point) and that would be when you would get a lot more money. I was just giving ballpark figures, but I guess technically you would consider that only 16 of your 26 weeks would be peak so the other 10 weeks if you only get $700 a week you'd still be looking at $16,688 for peak weeks and $7,000 off peak for a total of 23,688. Even if you go on the low end and only charge the $700 a week all year(I haven't seen a townhome rent for less than $100 at WH even off peak, but I admit I haven't looked at every single one) you are looking at 18,200 a year and that is saying that is all you rent out. WH is very popular, themed rentals the most popular there to rent. Look at some of those and their availability. They are booked a year out and have minimal availability all year. One of the townhomes we looked into(but went with a house) is already booked for 19 weeks from now through April 2015(the summer sold out besides one week). The one we used is already booked for 21 weeks from now until March of 2015(the summer is completely booked).

I don't think all the units are all the popular. Orlando has a surplus of rooms and aside from Christmas, Thanksgiving, Easter -- December - April, - I"knot sure they're all the 'bookable'. Each unit must cost an owner about $700 a month +++. NOt accounting for furniture, cleanings, renovations, assessments. I'd love to have $16k annual, but not sure that's realistic. A very top of the line unit…. with a great view , balconies and all, near the park, maybe. And how much is the purchase price for it… ? Kwim?

 

[aprincessatlast]

Ianother 1900 a month for insurance/taxes/utilities.

Where do you get your numbers from? Granted I am clueless to taxes and insurance in Florida but that number is for a 200k house in a not so great market. What is the tax rate in that area. How much more is hurricane insurance anyway.

 

[kiki02]

Where do you get your numbers from? Granted I am clueless to taxes and insurance in Florida but that number is for a 200k house in a not so great market. What is the tax rate in that area. How much more is hurricane insurance anyway.

No, it's not 1900 a month. It can't be more than $800+ a month between tax (2% to Fl) hoa fees (someone has to pay for the pool, the parking, the flowers, etc) insurance and cleaning upkeep. This is just my estimation as I've done a few of these/while working for an office that invested.

 

[nugov2]

I don't think all the units are all the popular. Orlando has a surplus of rooms and aside from Christmas, Thanksgiving, Easter -- December - April, - I"knot sure they're all the 'bookable'. Each unit must cost an owner about $700 a month +++. NOt accounting for furniture, cleanings, renovations, assessments. I'd love to have $16k annual, but not sure that's realistic. A very top of the line unit…. with a great view , balconies and all, near the park, maybe. And how much is the purchase price for it… ? Kwim?

That is why I suggested WH resort and doing a themed rental. Those are most popular. You can get a WH 3bdrm with pool under $200,000. My $16K was not listed as a profit, but as what you could deduct from your cost to own the home. You would still spend between 7-800 a month for this house, but my point is it is your home. You are building the equity. You can use it when you want for as long as you want vs DVC that is not yours. They are just buy in points and you have no guarantee to get what you want when you want it.

Where do you get your numbers from? Granted I am clueless to taxes and insurance in Florida but that number is for a 200k house in a not so great market. What is the tax rate in that area. How much more is hurricane insurance anyway.

Hypothetical numbers based on what I pay a month plus some quick google research. Obviously it should be researched better, but I was just giving ballpark answers. I was also factoring in what I would think would be the management company fee. It can range from 18% per transaction to a flat monthly fee. Also I looked at one house for sale and saw what the property taxes were. I actually just googled WH fees:

The Master Community Association is $570.00 per quarter while The Enclave is $328.00 per quarter. The total HOA fees per Quarter for Windsor Hills is $898.00. These fees also include cable TV, Trash pickup, high speed internet and access to all amenities in the Resort . So around $300 a month for all that.