Buy Resale just to Rent Points?

[bwbuddy5]

I appreciate all of you who have shared info here, and for those of you who have broken away from this thread and instead begun private message conversations with me. It's always refreshing to read everyone's thoughts, as all of you have each other's best interests at heart without insisting that everyone come to the exact same conclusion.

By the way, since we've indirectly discussed grand villa availability at both the 11 month and 7 month windows, you'll find excellent information as posted yesterday by drusba at the thread below.

http://www.disboards.com/threads/grand-villa-availability-at-all-resorts.3564854/#post-56842301

 

[bwbuddy5]

If you’re curious, here’s a list of facts in my particular situation (no conjecture, no projections, no forecasting, just the facts, Jack!):

1) Using one of the popular DVC point rental sites, current dollar amount for an AK savanna view grand villa Sun-Fri (5 nights), June 11-16, 2017, is $7875 (525 points).

2) Historically, there has been less than a 5% success rate of finding an owner with a contract this large that wants to rent points.

3) Using drusba’s excellent inventory data over the last couple of years, there have always been grand villa availability at Kidani at the 7-month window.

4) Avg sale price for Hilton Head resale for larger contracts has been around $67/point.

5) Buying 175 HH points (one-third of the desired 525 points, if bank and borrow each three years), would create purchase price of $11,725, plus closing costs (basically only 48% more than the cash it would require me to rent for one 5-night vacation in June, as outlined in item 1, even if a rental contract were available).

6) For 2017, annual maintenance costs for HH for 175 points @ $7.27 would be $1272.25 ($106 per month).

Hence my dilemma. While I still lean towards a cash rental, given rental contract availability, it would require either a split stay, or backing off to a couple of 2BRs; therefore, the data above makes a resale purchase at HH a tempting alternative. In addition, Hilton Head is also one of our favorite areas to visit.

Thanks for listening.

 

[mustinjourney]

If you’re curious, here’s a list of facts in my particular situation (no conjecture, no projections, no forecasting, just the facts, Jack!):

1) Using one of the popular DVC point rental sites, current dollar amount for an AK savanna view grand villa Sun-Fri (5 nights), June 11-16, 2017, is $7875 (525 points).

2) Historically, there has been less than a 5% success rate of finding an owner with a contract this large that wants to rent points.

3) Using drusba’s excellent inventory data over the last couple of years, there have always been grand villa availability at Kidani at the 7-month window.

4) Avg sale price for Hilton Head resale for larger contracts has been around $67/point.

5) Buying 175 HH points (one-third of the desired 525 points, if bank and borrow each three years), would create purchase price of $11,725, plus closing costs (basically only 48% more than the cash it would require me to rent for one 5-night vacation in June, as outlined in item 1, even if a rental contract were available).

6) For 2017, annual maintenance costs for HH for 175 points @ $7.27 would be $1272.25 ($106 per month).

Hence my dilemma. While I still lean towards a cash rental, given rental contract availability, it would require either a split stay, or backing off to a couple of 2BRs; therefore, the data above makes a resale purchase at HH a tempting alternative. In addition, Hilton Head is also one of our favorite areas to visit.

Thanks for listening.

I'm more or less in agreement with your thought process -- but I would also run the numbers for SSR. I think you can find SSR for around $75 pretty easily (see ROFR THREAD), so that is a difference of about $8 per point up front. MFs on SSR are about $2 cheaper per year right now, so after 4 years (ignoring Time value of money), SSR will be a cheaper option. And this does not factor in the slightly lower closing fees associated with SSR vs HHI.

 

[bwbuddy5]

I'm more or less in agreement with your thought process -- but I would also run the numbers for SSR. I think you can find SSR for around $75 pretty easily (see ROFR THREAD), so that is a difference of about $8 per point up front. MFs on SSR are about $2 cheaper per year right now, so after 4 years (ignoring Time value of money), SSR will be a cheaper option. And this does not factor in the slightly lower closing fees associated with SSR vs HHI.

Totally agree with you - the main reason I stuck with Hilton Head, is that our family may use the points to stay at Hilton Head at some point in the future, and GVs there disappear shortly after the 11-month window opens, during the summer months.

 

[disneynutz]

Totally agree with you - the main reason I stuck with Hilton Head, is that our family may use the points to stay at Hilton Head at some point in the future, and GVs there disappear shortly after the 11-month window opens, during the summer months.

Only issue with HH is the high dues and storm damage. HH owners are currently paying back DVC for a loan to repair the last storm damage, it isn't much much but may be something to consider.

 

[Dean]

If you’re curious, here’s a list of facts in my particular situation (no conjecture, no projections, no forecasting, just the facts, Jack!):

1) Using one of the popular DVC point rental sites, current dollar amount for an AK savanna view grand villa Sun-Fri (5 nights), June 11-16, 2017, is $7875 (525 points).

2) Historically, there has been less than a 5% success rate of finding an owner with a contract this large that wants to rent points.

3) Using drusba’s excellent inventory data over the last couple of years, there have always been grand villa availability at Kidani at the 7-month window.

4) Avg sale price for Hilton Head resale for larger contracts has been around $67/point.

5) Buying 175 HH points (one-third of the desired 525 points, if bank and borrow each three years), would create purchase price of $11,725, plus closing costs (basically only 48% more than the cash it would require me to rent for one 5-night vacation in June, as outlined in item 1, even if a rental contract were available).

6) For 2017, annual maintenance costs for HH for 175 points @ $7.27 would be $1272.25 ($106 per month).

Hence my dilemma. While I still lean towards a cash rental, given rental contract availability, it would require either a split stay, or backing off to a couple of 2BRs; therefore, the data above makes a resale purchase at HH a tempting alternative. In addition, Hilton Head is also one of our favorite areas to visit.

Thanks for listening.

As I posted previously, the best comparison is between SSR & HH and HH will be more expensive long term, have more value and give more options for WDW (less for usage at HH). IMO owning to go to a DVC resort every 4-5 years is not a good choice regardless of the historical availability and points availability. There are other options that will accommodate the same group size if one gets stuck otherwise and that would be cheaper than a GV.

 

[mustinjourney]

Totally agree with you - the main reason I stuck with Hilton Head, is that our family may use the points to stay at Hilton Head at some point in the future, and GVs there disappear shortly after the 11-month window opens, during the summer months.

As long as you are aware of the risks/rewards of the deal, and YOU are comfortable with the decision -- that is all that really matters.

Good luck, and happy hunting!

 

[bwbuddy5]

As I posted previously, the best comparison is between SSR & HH and HH will be more expensive long term, have more value and give more options for WDW (less for usage at HH). IMO owning to go to a DVC resort every 4-5 years is not a good choice regardless of the historical availability and points availability. There are other options that will accommodate the same group size if one gets stuck otherwise and that would be cheaper than a GV.

Believe me, that makes since. Unfortunately (or fortunately depending on how you want to look at it), my gang has watched just enough Youtube videos to fall in love with a Kidani GV, so I get to figure out how to make it happen. It's funny, when I type in my specifics on the actual Disney website for Kidani, it places my entire party of 9 in a 2BR villa, at about the same price as the GV quote from the DVC point rental sites. We would have to post a schedule outside of the bathrooms!

 

[bwbuddy5]

As long as you are aware of the risks/rewards of the deal, and YOU are comfortable with the decision -- that is all that really matters.

Good luck, and happy hunting!

I like this thought - people spend too much time second guessing themselves and forget to just enjoy their vacation!

 

[Dean]

Believe me, that makes since. Unfortunately (or fortunately depending on how you want to look at it), my gang has watched just enough Youtube videos to fall in love with a Kidani GV, so I get to figure out how to make it happen. It's funny, when I type in my specifics on the actual Disney website for Kidani, it places my entire party of 9 in a 2BR villa, at about the same price as the GV quote from the DVC point rental sites. We would have to post a schedule outside of the bathrooms!

Kidani has 3 Baths in the 2 BR. One can get a 2 BR and a studio cheaper than a 3BR. How much time will you spend in the villa, if it's more a place to sleep than anything, that affects the reasonableness of the decision of the 3BR villa. I still feel it's a poor choice to buy for DVC every 4-5 years but maybe you'll do HH in addition in between or if not, you might just have to go more often than you're currently thinking. Are you sure it's 525 points for 5 nights during Magic season, I get 575 points avoiding weekends for magic and one needs to have a cushion if they're going to do this so basically 200 points a year or very close. Also consider that even at every 3 years, if ANYTHING was to happen, one would have 400 points at risk every time (banked/borrowed) and that assumes a good UY for the trips to provide sufficient insurance in case of changes/cancelations. So to explore the every 5 year plan, one would have to rent roughly 400 points every 5 years and have good timing on the usage year.

I like this thought - people spend too much time second guessing themselves and forget to just enjoy their vacation!

At some point you have to fish or cut bait. However, the better decision you make up front, the better position you'll be in down the road. Your plan only works well if everything goes right as I see it.

 

[bwbuddy5]

Are you sure it's 525 points for 5 nights during Magic season, I get 575 points avoiding weekends for magic and one needs to have a cushion if they're going to do this so basically 200 points a year or very close.

Magic in 2017 is 105 per night for GV Sun - Thu nights. But, I'm glad you made that comment. We would probably go first week of Magic season, which begins June 11. We could get the points down to 450 for the 5 nights if went a week earlier (which is still Dream season), but that's a gamble when you're married to a teacher and don't know if there will be snow days to make up.

 

[Dean]

Magic in 2017 is 105 per night for GV Sun - Thu nights. But, I'm glad you made that comment. We would probably go first week of Magic season, which begins June 11. We could get the points down to 450 for the 5 nights if went a week earlier (which is still Dream season), but that's a gamble when you're married to a teacher and don't know if there will be snow days to make up.

575, that's what I got. For years we traveled the first week of June because it was cheaper, easier and less crowded. We loved it.

One other thought I had and was going to come back and post anyway is about rental options. You mentioned finding someone to rent was difficult and I'm sure that's true to a degree. But I get the impression you're assuming through a service and I don't think that'd be the best way to rent for this type of issue. I'd find a couple of larger point owners at AKV and liaison with them then make arrangements ahead of time including a deposit of say 10% non refundable if they get the reservation.

 

[bwbuddy5]

575, that's what I got. For years we traveled the first week of June because it was cheaper, easier and less crowded. We loved it.

One other thought I had and was going to come back and post anyway is about rental options. You mentioned finding someone to rent was difficult and I'm sure that's true to a degree. But I get the impression you're assuming through a service and I don't think that'd be the best way to rent for this type of issue. I'd find a couple of larger point owners at AKV and liaison with them then make arrangements ahead of time including a deposit of say 10% non refundable if they get the reservation.

Doesn't 105 x 5 = 525? And, good idea on the open market rental.

 

[Dean]

Doesn't 105 x 5 = 525? And, good idea on the open market rental.

You're right, brain lapse.

 

[rothesay]

Great to learn from others on this thread.

 

[bwbuddy5]

Great to learn from others on this thread.

It's funny, I just received an email update from one of the resale companies about purchase/overall cost comparisons across the DVC resorts. Saratoga Springs was still #1, followed by BLT (mainly due to the number of years left), and I was surprised to see AKL in the top 5, my favorite.

 

[Disney Dad ADL]

It's funny, I just received an email update from one of the resale companies about purchase/overall cost comparisons across the DVC resorts. Saratoga Springs was still #1, followed by BLT (mainly due to the number of years left), and I was surprised to see AKL in the top 5, my favorite.

Interesting, didn't know the resale companies did that. Do they mention how they calculate the results?

SSR cheapest and BLT second cheapest is a pretty popular opinion, but of course it all depends on how they calculated it and also whether you are financing vs paying cash, if you account for increasing MFs and/or inflation, etc

 

[bwbuddy5]

Interesting, didn't know the resale companies did that. Do they mention how they calculate the results?

It was a nice table: Price per point divided by number of years until end of contract + maintenance cost per point.

This is a good rule of thumb, but you can make numbers say anything. I would guess that the majority of buyers don't pay that much attention to the remaining years on the contract. I think it may be more accurate to divide by the average number of years a DVC owner uses his purchase before choosing to sell it. And, most people don't vacation based solely on financial considerations any way, otherwise we would all end up at Six Flags.

 

[Disney Dad ADL]

It was a nice table: Price per point divided by number of years until end of contract + maintenance cost per point.

This is a good rule of thumb, but you can make numbers say anything. I would guess that the majority of buyers don't pay that much attention to the remaining years on the contract. I think it may be more accurate to divide by the average number of years a DVC owner uses his purchase before choosing to sell it. And, most people don't vacation based solely on financial considerations any way, otherwise we would all end up at Six Flags.

Got it, thanks for replying. I have a chart like that too, though I haven't updated it in a while (not sure if the initial costs are accurate and the dues are for 2016, not updated for 2017).



I'm trying to figure out the best way to take into account future increases in MFs, but if you do that on a chart like this, longer contracts get punished and all the 2042 resorts end up being the best.

I think in actuality, resorts with higher buy Ins and lower dues are actually a little bit better than this chart suggests due to the expectation of increasing MFs.

 

[Brian Noble]

Price per point divided by number of years until end of contract

I am constantly surprised by how many people completely ignore the time value of money. This is one of the timeshare salesperson's oldest tricks.

Illustration: I have an open offer. Loan me $10,000, and have me pay you back $1,000/year for each of the next ten years, and at that point we'll call it even. If you are willing to do this, please send me a PM and we can consummate the deal. If you are not wiling to do this, ask yourself why you are willing to just divide price-per-point by the number of years on the contract.