Buyers remorse.. and lots of it.

[havoc315]

Thank you all for your answers and advice.

The thing about DVC for me, is that I dream about staying at the deluxe-resorts. (Looking at you, Polynesian)

I think that the price for cash and even the cost to rent dvc-points is too steep.

If I buy dvc, I can stay at those resorts a couple of times, and then sell the contract hopefully for a good price so that I won’t loose too much money.

Just beware that it's not always so easy to stay at the true deluxe resorts -- like Poly, unless that's your home resort.
While you can often book Old Key West and Saratoga Springs... they really aren't quite the same as staying at the Poly or Grand Floridian or Beach Club or Riviera.

So I don't know what home resort you were buying, but I'd hate to see you buy it with the intent of only using it 1-2 times, and then not even get the resort you wanted.

But truthfully, once you factor in closing costs that you will never recover, commissions from re-sale, etc... There is practically no chance you will get your money's worth going just 1-2 times.
It would be much cheaper to pay full cash rack rate,

Look at it this way -- Say you are buying 150 points at $120 per point. You will pay around $1,000 in closing costs. Owning the points for 2 years and 2 trips, you will pay about You will pay about $2300 for 2 years worth of dues. So that's already $3,300 you will never get back.
Now, go and re-sell your points--- Let's say you actually manage to get $115 per point -- So only lost $750.. But then you still have closing costs on the sale and/or taxes and/or commissions. Just in commission, expect to pay 8.5% at least. So that's $1500 in commission. With other costs, figure the sale is at least $2,000.
So you've now lost $6,050 for 2 150-point studio trips. For $6,050.. depending when you travel, etc, you likely could book 2 deluxe resort trips.
If you rented points: renting 150 points at $18 per point for 2 years -- That's 5,400. So renting would be at least $600 cheaper than buying the points.

 

[RoseGold]

Just beware that it's not always so easy to stay at the true deluxe resorts -- like Poly, unless that's your home resort.

I agree with your general point, but Poly isn't a great example. It has pretty good 7 month availability, and the wait list can actually fill because there are so many standard view studios. I even got it to fill over the marathon weekend!

 

[havoc315]

I agree with your general point, but Poly isn't a great example. It has pretty good 7 month availability, and the wait list can actually fill because there are so many standard view studios. I even got it to fill over the marathon weekend!

may still be the Covid effect. But I checked poly today for just under 7 months out and there was nothing except bungalows. In fact, I checked exactly 7 months from today - no studios at Poly. Only studios at DVC 7 months from today were OKW, SSR and AKV.

So really depends on your dates. But you can’t count on definitely getting Poly studios at 7 months.

 

[RoseGold]

may still be the Covid effect. But I checked poly today for just under 7 months out and there was nothing except bungalows. In fact, I checked exactly 7 months from today - no studios at Poly. Only studios at DVC 7 months from today were OKW, SSR and AKV.

So really depends on your dates. But you can’t count on definitely getting Poly studios at 7 months.

That's 7 months + five hours. It's wide open for tomorrow and there's availability in the 7 months - a week a two. So, at least some of that is walkers.

 

[dvc lover 1970]

Thank you all for your answers and advice.

The thing about DVC for me, is that I dream about staying at the deluxe-resorts. (Looking at you, Polynesian)

I think that the price for cash and even the cost to rent dvc-points is too steep.

If I buy dvc, I can stay at those resorts a couple of times, and then sell the contract hopefully for a good price so that I won’t loose too much money.

If your plan is to only use the contract a couple times then sell it, then dvc is not for you and you probably should probably put the cost of the contract into renting dvc points instead.

 

[ForWhomTheMouseTolls]

What rumor about Disney selling DVC?

 

[Stargazer65]

What rumor about Disney selling DVC?

Read this thread for rumors on that:
https://www.disboards.com/threads/disney-to-sell-their-dvc-unit.3853983/Rumors are just rumors on here, don't take it too seriously. For instance, somebody on here started a rumor that VGF2 sales would start on 10/1. I wouldn't trust that guy more than I can throw him.

 

[JELLYROLLS4LIFE]

If you really don't think you will use it, don't go through with it. Yes renting points to stay deluxe is expensive, but not as expensive as a poorly used DVC contract. It really is not for everyone. Losing deposit is tough, but if you can't afford the money the losses will be longer long-term.

 

[smisale]

there another way at looking at it. check on renting your points to recoup some of your money. as a international buyer you need to check some of these rental companies and see what's involved

 

[bumbershoot]

(I am also a little bit concerned about the ”disney selling DVC rumour” -> value of the contract down to maybe zero…)

Someone happening upon 3 random financial guys talking about "what ifs" isn't anything to worry about.

If I buy dvc, I can stay at those resorts a couple of times, and then sell the contract hopefully for a good price so that I won’t loose too much money.

I read your other post that you're the only disney fan. But if you're visiting the US anyway, the non-fans can make it a resort stay while you have fun.

I agree with your general point, but Poly isn't a great example. It has pretty good 7 month availability, and the wait list can actually fill because there are so many standard view studios. I even got it to fill over the marathon weekend!

I have tried for the Poly at 7 months (and repeatedly/obsessively closer than 7 months) once a year for Princess since the 2016 Princess. I have gotten it ONCE. And then canceled it b/c a one-bedroom is more fun for our trips. It was only available one time for my stays in those years. And it hasn't been available for my stay for Princess 2022, either.

 

[RoseGold]

I have tried for the Poly at 7 months (and repeatedly/obsessively closer than 7 months) once a year for Princess since the 2016 Princess. I have gotten it ONCE. And then canceled it b/c a one-bedroom is more fun for our trips. It was only available one time for my stays in those years. And it hasn't been available for my stay for Princess 2022, either.

Did you put in a waitlist? It does have hundreds of rooms in the same category, so odds are not bad.

 

[Amyeliza]

IMO I would not buy something that costs this much when you already feel you won’t use it abs have concerns about later on.

Id lose the the deposit and take more time to decide on a few years.

I couldn't have said this better. I did end of purchasing a property that I had remorse about and broke even selling it 6 months later. Prices increased $20 a point in that time. I also got a free trip out of it before selling it. I wanted a contract that expired in 2042 because I didn't want to burden others with it when I pass on. These are important things to consider.

 

[StarCruzer]

It depends on a lot of things.

1. Will you have to finance your purchase? Most if the math shows that taking out a loan to purchase DVC will negate the amount you save in terms of Deluxe Resort bookings. We saved for years to be able to buy an 85 pt contract outright, and it's just enough for a week in a studio in the off season, every year, or a 1 bedroom every other year.

2. Do you feel you'll take the time to rent out your points? If you're purchasing one of the more popular resorts (anything outside AKV, STS, or OKW) you will have zero problem renting out your points. It should at the very least cover your maintenance fees. If you have ANY friends or family who are Disney fans, rent your points to them directly--even if you rent at $11pp, both parties are getting a great deal

3. Do you think you'd ever be interested in using the points for Aulani? Disney World isn't the only place you can use points. We've used ours for CA vacations too (though we were only able to book 2 nights at GC, we split with a regular hotel).

DVC usually holds its value pretty well. We bought AKV at $104pp three years ago, and it's now selling for $140. If you hold on for a few years you could break even. Of course like any investment, there is risk.

I agree with everyone who has said this before, but don't purchase if you feel it will be a financial hardship! Don't live on beans and rice for a year just to have a nice vacation. If you feel like even renting points to stay at Poly would be a hardship, consider a split stay--say, 4 days at Pop Century and your last 2 days at Poly. Disney does luggage transfers which makes it much easier to split a stay between hotels.

A lot of this is a bit of a summary of what other people have said, but I hope it helps!

 

[treygn]

Just beware that it's not always so easy to stay at the true deluxe resorts -- like Poly, unless that's your home resort.
While you can often book Old Key West and Saratoga Springs... they really aren't quite the same as staying at the Poly or Grand Floridian or Beach Club or Riviera.

So I don't know what home resort you were buying, but I'd hate to see you buy it with the intent of only using it 1-2 times, and then not even get the resort you wanted.

But truthfully, once you factor in closing costs that you will never recover, commissions from re-sale, etc... There is practically no chance you will get your money's worth going just 1-2 times.
It would be much cheaper to pay full cash rack rate,

Look at it this way -- Say you are buying 150 points at $120 per point. You will pay around $1,000 in closing costs. Owning the points for 2 years and 2 trips, you will pay about You will pay about $2300 for 2 years worth of dues. So that's already $3,300 you will never get back.
Now, go and re-sell your points--- Let's say you actually manage to get $115 per point -- So only lost $750.. But then you still have closing costs on the sale and/or taxes and/or commissions. Just in commission, expect to pay 8.5% at least. So that's $1500 in commission. With other costs, figure the sale is at least $2,000.
So you've now lost $6,050 for 2 150-point studio trips. For $6,050.. depending when you travel, etc, you likely could book 2 deluxe resort trips.
If you rented points: renting 150 points at $18 per point for 2 years -- That's 5,400. So renting would be at least $600 cheaper than buying the points.

Looking at these numbers actually makes buying points and reselling a few years later look BETTER. Compared to renting points, you’re almost breaking even after just TWO trips. Wow! Given the likely inflation of rented points, you’re actually better off buying a resale contract, holding onto it for 3-4 vacations, and then reselling it (as compared to renting points for 3-4 vacations). I’d always heard that it’s about 8 years before you can expect to break even on DVC, but maybe that’s if buying direct.

 

[havoc315]

Looking at these numbers actually makes buying points and reselling a few years later look BETTER. Compared to renting points, you’re almost breaking even after just TWO trips. Wow! Given the likely inflation of rented points, you’re actually better off buying a resale contract, holding onto it for 3-4 vacations, and then reselling it (as compared to renting points for 3-4 vacations). I’d always heard that it’s about 8 years before you can expect to break even on DVC, but maybe that’s if buying direct.

The "8 years" is break even compared to paying cash rooms. Renting points captures most of the same discount as you get buying DVC.
So yes, compared to renting points, you can break even pretty quickly.

BUT, that doesn't factor in the opportunity cost of money.
Paying $5,000 up front may sound "even" compared to paying $1,000 per year over 5 years. But because of the opportunity cost of money, you're much better off in the second scenario.

Look at buying 150 points for $120, as in the example cited:
That's $19,000 up front including closing costs. Let's say dues are $7.50 per point. So you're paying $19,000 up front PLUS $1,125 per year.
Renting 150 points would be about $2,550 per year if you could get it for $17 per point.

But if we invest the $19,000 to start instead of investing it all in DVC, if we can get a 7% return, which is quite feasible---
So after 3 years of renting -- 3 trips -- Your total cost was only $3,660, when you factor in the return on the investment. So by renting, total cost of 3 trips was $3660.

But by purchasing for only 3 trips: You are paying the $19,000 up-front plus 3 years of dues: So you're paying $22,375... then when you re-sell, say you might get back $16,000 after commissions, closing costs... So your total cost for 3 trips was $6,375.

So not even close -- Renting cost you $3660, while purchasing for only 3 trips it's costing you $6,375.
Now, you don't really know for certain what type of return you'll get on your investment. You don't know how much inflation there will be in point rental fees -- But there isn't likely to be big inflation over just 3 years.
So even if you only get a 4-5% investment return, and even if rental rates go a little higher, it will still be significantly cheaper to rent.

What's scary -- When you truly take into account the opportunity cost, it actually takes much longer than 8 years to break even.... It can take 20 years.

 

[upritbass]

What's scary -- When you truly take into account the opportunity cost, it actually takes much longer than 8 years to break even.... It can take 20 years.

Or 10 years or 6 years or zero years depending on what imaginary scenarios you cook up. We bought VGC two years ago and your imaginary 7% return pales in comparison to our current actual 30% return. Per year. And we get to stay at the Grand Californian.

The future is hard to predict. That is why you should diversify your investments. DVC is part of our portfolio.

 

[havoc315]

Or 10 years or 6 years or zero years depending on what imaginary scenarios you cook up. We bought VGC two years ago and your imaginary 7% return pales in comparison to our current actual 30% return. Per year. And we get to stay at the Grand Californian.

The future is hard to predict. That is why you should diversify your investments. DVC is part of our portfolio.

Not a single financial advisor in the world would recommend DVC as part of an investment portfolio.
And unless you actually sold your DVC, you haven’t realized any return. How much will it be worth in 40 years? My crystal ball actually knows the answer — current GCV contracts will be worth $0.
Not saying people shouldn’t buy DVC — it’s a disposable luxury purchase, like buying a car, or buying an expensive meal. You buy it because you like it. And when thought out, it can sometimes be cheaper than other ways of obtaining the same product.

 

[RoseGold]

Not a single financial advisor in the world would recommend DVC as part of an investment portfolio.

Actually, that’s how I ended up buying. My boomer dad likes dave Ramsey, he was sponsored by a company that “sold” timeshares for a while, so he talked about it a lot.

In one of the calls, he told someone to never buy a timeshare except maybe Disney. My dad was not amused when I used this loophole, and hates Disney. But he was impressed recently at how my DVC has gone up in value, haha.

 

[upritbass]

Not a single financial advisor in the world would recommend DVC as part of an investment portfolio.

See RoseGold's answer above.

And unless you actually sold your DVC, you haven’t realized any return.

And what do you get from your 7% investment before you sell it? I may not get a monetary return before I sell my DVC, but I get free vacations in the meantime...

How much will it be worth in 40 years? My crystal ball actually knows the answer — current GCV contracts will be worth $0.

Your crystal ball is as worthless as your unsold investment. I'll be dead in 40 years.
What will your imaginary investment be worth in 40 years? My Magic 8-ball says, "Ask again later" because you don't know. Enron anyone?

 

[havoc315]

See RoseGold's answer above.

“never buy a timeshare except maybe DVC” isn’t exactly the same thing as someone recommending DVC as an investment portfolio.

Again, no credible professional financial advisor would say “ignore mutual funds, stocks, bonds, equities, 401k, pension, real estate… instead, you should plan your retirement savings by Buying DVC!”

And what do you get from your 7% investment before you sell it? I may not get a monetary return before I sell my DVC, but I get free vacations in the meantime...

Bingo!!! You’re purchasing a vacation! You’re purchasing many vacations! You’re not investing.

So then the only question is, are you actually getting those vacations in the cheapest way possible. Or, is it possible, to get the exact same vacations for less money.

And that’s where we do the math. We see that compared to paying for cash rooms, DVC can break even in about 8-10 years. Compared to renting points, it’s more like break even in 20 years.

your crystal ball is as worthless as your unsold investment. I'll be dead in 40 years.
What will your imaginary investment be worth in 40 years? My Magic 8-ball says, "Ask again later" because you don't know. Enron anyone?

That’s quite a philosophy. Don’t bother saving for retirement over 40 years. Don’t bother saving for your kids college over 18 years. Etc.

Of course, with that philosophy, nobody should buy DVC. Just pay cash each vacation. Because you might buy DVC and it becomes worthless in 6 months. A meteor could destroy it.

On the other hand, we can look at likely outcomes. An intelligent diversified investment portfolio should grow by 10-20x over 40 years. A 2060 DVC contract will with certainty be worthless in 40 years.

Not saying people shouldn’t buy DVC — I’m an owner. But I’m not pretending it’s an investment. I have 8 years of college tuition saved for my kids, I have my retirement savings on track. DVC is for my enjoyment, because I plan on taking 50 years of vacations (well, I’ll take 20-30, my kids and grandkids will take the rest).