Buying at Vero Beach to Stay at WDW??

[DougEMG]

Now onto the question of which is the better rental, BTL or SSR. I'm going to use a 10 year period since any further out and it gets to hard to predict what could happen.

Which is better depends on three things (1) $/point you paid (2) MF/point you pay and (3) rent/point you get.

(1) For BLT resale lets assume you pay $90/point while SSR you get for $60/point. SSR is $30/point ahead in this category.

(2) BLT currently has $4.22/point for MF and SSR has $4.73/point for MF. I'm going to be generous towards BLT and assume that both resorts increase at 3.5% annually. Historically SSR has had the lowest increases. This means that over 10 years you've paid a total of $55.45 in MF on a BLT point and $62.16 in MF on SSR point. BLT is ahead by $6.71/point over the 10 years in this category.

(3) SSR rents for $11/point for the next 10 years, and we'll be generous and give BLT $13/point for rentals. So BLT is ahead $2/point/year or $20/point for the 10 year period.

So in our example what we have after ten years is SSR is up by $3.29/point.

How's it's up to you to use your own numbers. The one thing that is clear, is that BLT costs more up front per point. MF might stay resonably close between the two and I do argee that BLT will rent for more provided you do so at that 11 month mark.

For myself I own around 900 SSR points and have 400+ more SSR points at SSR and my costs are no where close to $60/point for SSR. And I think that this is were the big advantage of SSR is, the much lower initial buy in price. Because of this I can probably afford to buy twice as many SSR points as I could BLT points.

 

[permavac]

...I do argee that BLT will rent for more provided you do so at that 11 month mark...

Interesting. I don't see a need for a premium for BLT but maybe it is me? I needed a lot of points for a stay with extended family next year and I spent at least one month hunting for a transfer. What I wanted were BCV points and what I settled for were BLT points. We've stayed at BLT and, while I don't hate it, I don't love it either. My favorite is BWV but for this stay I thought the family would enjoy BCV the most. I did book my rooms already - just so we had something, but at the 7 month mark I am hoping to unload those BLT rooms for BCV. This may just be an aberration but I got the BLT points for $10 per point - the same price I was willing to pay for any property other than HHI and VB. So, did I get unbelievably "lucky" or is BLT gold to some and not so much to others - just like all the other properties?

Terri

 

[Dean]

I'm a little confused as to why people keep referring to a crossover. What makes anyone think that rental prices are frozen for the next dozen years? They have increased steadily -- I've seen it. David's was around $9 five or six years ago (?). Now it's at $13. Seems it averages 50cents per year. Personal rentals keep pace. So when VB dues [presumably] reaches the current rental prices, the rental prices will be much higher. I don't see a "crossover" where maint dues will surpass rental prices. But what do I know. What do we all know, really?

They have not increased steadily, you're looking at a skewed option. I rented for $10:50 a point in the late 90's and dropped down to $10 once the free tickets went away. I've rented consistently at $12-13 a point the last few years, usually averaging about 2 to 3 rentals a year, some more than others. There was a dip around and after 9/11 but even then, those that knew how, were able to rent for around the same amount.

BLT may be a good value resale to use but likely not as a rental option due to the higher buy in cost and that the dues are unlikely to remain as different as they were (already gone up some).

 

[dunnhorn]

yes, it will be interesting to see what happens...

 

[mjc2003]

I'm a little confused as to why people keep referring to a crossover. What makes anyone think that rental prices are frozen for the next dozen years? They have increased steadily -- I've seen it. David's was around $9 five or six years ago (?). Now it's at $13. Seems it averages 50cents per year. Personal rentals keep pace. So when VB dues [presumably] reaches the current rental prices, the rental prices will be much higher. I don't see a "crossover" where maint dues will surpass rental prices. But what do I know. What do we all know, really?

I rented points in 2009 for $11, but last November was able to get points for $10.50, but during that time dues increased. VB dues are up about 80% since 1999, yet as Dean describes points could be rented in the late 90's for the same $10.50 I spent last year.

As for what we all know, really it is very little but you can draw certain conclusions from historical data. The data shows that rental prices have fluctuated very little over the last 10-15 years, whereas VB dues have almost doubled during the same timeframe, so it is a reasonable presumption that there will be a crossover sometime within the next decade.

The David's price of $13 that you refer to is unique, on the R/T board "last minute" points can be had for $8-$9, and most of the rest are around $11ish.

I would have real concerns as well about the hurricane issue and what that would do to owners by way of a special assessment. There have been 55 hurricanes in the last 140 years documented as hitting or "brushing" Vero. That's basically one every 2.5 years. This is a reality, not a far fetched doomsday scenario.

When you add that to the absurdly high MF's, and sprinkle in the improbable spin-off scenario, it's hard to argue that buying VB is a good idea unless, as I said earlier, the buyer has a specific desire to stay mostly at VB during the times of the year when it's hard to book without a preferred window. Of course people have different thresholds for risk, but ultimately I think it's really just best to buy onsite to stay onsite. Just my opinion.

 

[ELMC]

I'm a little confused as to why people keep referring to a crossover. I don't see a "crossover" where maint dues will surpass rental prices.

I read this again and I have to say that if you don't see this happening then it is a problem. Vero Beach is an outlier, so it is very likely for this exact situation to happen to Vero Beach while the rest of the resorts (and point rental prices) remain fairly stable without having any significant effects on the DVC system as a whole. What I mean by this is that the overall market won't see a need to self correct just because the maintenance fees at one resort out of eleven is experiencing this type of pressure.

Obviously the best we can do is look at historical data and make predictions about what will happen. But given the track record, a crossover point is a near certainty. Whether you agree with this or not, if you are a Vero Beach owner it would be in your best long term interests to acknowledge this as an almost guaranteed reality in the future.

 

[AllieV]

I'm just waiting for the price of BLT resales to drop once VGF and the Poly come on line.

You make a good point there. I didn't think I'd see AKV drop the way it did when it did. I figured the contracts were lined in gold. Having never been there, I didn't foresee that people would resent its distance and stop buying it and start selling it. I don't know what the BLT achilles heel is (high points?) but I'm sure there is one.

 

[Missyrose]

I'm just waiting for the price of BLT resales to drop once VGF and the Poly come on line.

You make a good point there. I didn't think I'd see AKV drop the way it did when it did. I figured the contracts were lined in gold. Having never been there, I didn't foresee that people would resent its distance and stop buying it and start selling it. I don't know what the BLT achilles heel is (high points?) but I'm sure there is one.

I think Doug hit the nail on the head. There is probably a large chunk of BLT owners that bought there because they wanted to be on the monorail. But those people may like GF and Poly as resorts more than CR, so they could be likely candidates to dump BLT in order to buy in at Poly and GF once they come online.

 

[mjc2003]

In the interest of staying on topic....the OP posted in another thread that they withdrew their VB offer and are buying on property.

You make a good point there. I didn't think I'd see AKV drop the way it did when it did. I figured the contracts were lined in gold. Having never been there, I didn't foresee that people would resent its distance and stop buying it and start selling it. I don't know what the BLT achilles heel is (high points?) but I'm sure there is one.

BLT's achilles heel might be that it's the first DVC on the monorail, and the next two will probably be appealing to a wider audience. If/when GF and Poly have DVC options, I think that natural selection will push BLT further down the desirability spectrum. BLT will become the "cheap" MK option. I think the points are crazy high, but then again, at least they have standard and lake view to ease the costs a bit. I'm betting that GF is more points per night, and that there are less room categories. They're going to find a way to make 75% of the resort some sort of premium view.

One other thing that I think will play a role in the BLT resale pricing will be that many bought there solely based on their desire to be near the MK. Now that there will be alternatives, I would not be surprised to hear of BLT owners selling off their contracts to buy at another monorail DVC. I have read plenty of posts from people saying that they don't love BLT but had to be near the MK. This could result in an uptick in BLT listings, which would drive prices down a bit.

 

[DougEMG]

BLT's achilles heel might be that it's the first DVC on the monorail, and the next two will probably be appealing to a wider audience. If/when GF and Poly have DVC options, I think that natural selection will push BLT further down the desirability spectrum. BLT will become the "cheap" MK option. I think the points are crazy high, but then again, at least they have standard and lake view to ease the costs a bit. I'm betting that GF is more points per night, and that there are less room categories. They're going to find a way to make 75% of the resort some sort of premium view.

One other thing that I think will play a role in the BLT resale pricing will be that many bought there solely based on their desire to be near the MK. Now that there will be alternatives, I would not be surprised to hear of BLT owners selling off their contracts to buy at another monorail DVC. I have read plenty of posts from people saying that they don't love BLT but had to be near the MK. This could result in an uptick in BLT listings, which would drive prices down a bit.

Exactly.

What will be interesting to see is how long it takes BLT prices to fall once those resorts start coming on line, 2015?

While I'd like to try out BLT for a few nights I don't see it being a regular destination for us, too high a point cost. BWV standard rooms are such a good deal and you can walk to 2 parks.

 

[jagson]

If you are not planning to stay at VB, then IMO, there are mostly cons:

Pros:

Lower buy-in

Cons:

Higher dues than the other DVC resorts. Will eat up the lower buy-in cost relatively soon.

Lower Resale value

You can only reserve a WDW DVC resort at the 7 month window. Depending on when you travel, the villa size and view, your choices may come down to SSR or OKW, or a split stay or maybe even none at all (you should be able to find something somewhere if you book right at 7 months, though).

It's possible that a bad storm could destroy VB. DVC could decide not to rebuild. While you may receive some benefit from insurance, you would be out of the Club.

DVC could decide to sell VB (not likely, but possible). If so, you could only stay at VB.

If you really only want to stay at WDW, consider a resale for SSR or one of the other DVC resorts located there. Dues will be lower and you can book at 11 months. I don't believe the prices for those two are that much higher than VB.

Could they really sale VB, and cut you out of DVC? And, couldn't MFs be asessed up to 15%, should DVC wish, or need to; say, if a natural disaster's damage, or upgrades, be significant? I think 15% is the cap on MFs DVC can charge on any property they have. And, say if a hurricane hit directly, it could actually cause such erosion of the beach that, where buildings are now, could be ocean after the storm. You're more likely to get the worst of a hurricane's force at the ocean, than further inland in Orlando, translating to more damage at the oceanfront property, and higher restoration costs, which would likely take longer to repair, making it unavailable for vacationers. Bottom line, buy at WDW, then try to reserve at VB at the 7 month window if you want. I think it gives you greater flexibility, as well as less expenditure, in the long run.

 

[CarolMN]

Could they really sale VB, and cut you out of DVC?

Yes. It's in the POS.

And, couldn't MFs be asessed up to 15%, should DVC wish, or need to; say, if a natural disaster's damage, or upgrades, be significant? I think 15% is the cap on MFs DVC can charge on any property they have. And, say if a hurricane hit directly, it could actually cause such erosion of the beach that, where buildings are now, could be ocean after the storm. You're more likely to get the worst of a hurricane's force at the ocean, than further inland in Orlando, translating to more damage at the oceanfront property, and higher restoration costs, which would likely take longer to repair, making it unavailable for vacationers.

The annual cap of MFs has nothing to do with a natural disaster. Disney has the right to distribute the insurance proceeds and not rebuild. Disney decides. Owners have no say in the decision.

I won't argue about likelihood of where a storm might cause the most damage. Don't think it relevant to the point that if the resort is destroyed, Disney does not have to rebuild. It if doesn't, the owners there are no longer in the DVC. That's just the way the POS is written.

 

[mjc2003]

Exactly.

What will be interesting to see is how long it takes BLT prices to fall once those resorts start coming on line, 2015?
.

I'd think sooner, maybe as soon as there are real numbers and hard dates, not necessarily a finished resort. I bet we see an uptick in BLT resale listings right after GFV pricing is announced, but then the question becomes whether there is enough of these folks to drive up inventory to a point that would affect pricing?

There could be another "wave" when Poly starts selling.

There will also be people who bought BLT b/c it's all there was near the MK and planned to switch to GFV/Poly, but suddenly they are looking at $165 point buy ins after already spending lots on new BLT points just a few years ago, and are looking at $85-$90 if they sell their points resale, so might just leave it alone and stick with where they are.

 

[lynngirl]

We have decided to withdraw our bid on VB and have put in a offer at AKV. Thank you to everyone that posted ! We really appreciate all the advice ! Hope to be a AKV owner soon !!

 

[Dean]

Could they really sale VB, and cut you out of DVC? And, couldn't MFs be asessed up to 15%, should DVC wish, or need to; say, if a natural disaster's damage, or upgrades, be significant? I think 15% is the cap on MFs DVC can charge on any property they have. And, say if a hurricane hit directly, it could actually cause such erosion of the beach that, where buildings are now, could be ocean after the storm. You're more likely to get the worst of a hurricane's force at the ocean, than further inland in Orlando, translating to more damage at the oceanfront property, and higher restoration costs, which would likely take longer to repair, making it unavailable for vacationers. Bottom line, buy at WDW, then try to reserve at VB at the 7 month window if you want. I think it gives you greater flexibility, as well as less expenditure, in the long run.

They can't sell the property, it's actually owned by the DVC members there until 31 Jan, 2042, but they could sell the management contract which would remove VB from the club as I understand it. While DVC dues (outside of taxes) can't be increased more than 15% per year, I'd think the 2 year reallocation issue that we've seen recently would convince most that this is not any protection. As for natural disaster risk, all properties have some risk but VB is by far the most likely to have major damage and the most likely to have hurricane damage of all the resorts and that includes HI if you believe any historical info. After that HI is likely next, then HH. It's also the least likely to be rebuilt if it does sustain major damage along with HH. The POS says that if this happens and the plan is to rebuild, the members there can use their points elsewhere subject to other rules but if they plan is not to rebuild, the members cease to be members and other than any prorated insurance, would have no claims.

 

[AllieV]

But a VB owner would be paid out something for their stake if the place were destroyed and not rebuilt, yes?

OP, congrats. If you have the up-front money to buy elsewhere, it's a great decision.

 

[Missyrose]

But a VB owner would be paid out something for their stake if the place were destroyed and not rebuilt, yes?

OP, congrats. If you have the up-front money to buy elsewhere, it's a great decision.

From what I've read here and elsewhere, if VB was destroyed by a storm and Disney decided to not rebuild, the owners would get pennies on the dollar for their contracts. Remember, each DVC contract is a fraction of a percent of the resort as a whole.

 

[Dean]

But a VB owner would be paid out something for their stake if the place were destroyed and not rebuilt, yes?

OP, congrats. If you have the up-front money to buy elsewhere, it's a great decision.

The insurance proceeds minus any expenses. I don' think any of us had a way of knowing how much but likely to be pennies not the dollar.

 

[CarolMN]

They can't sell the property, it's actually owned by the DVC members there until 31 Jan, 2042, but they could sell the management contract which would remove VB from the club as I understand it. .......(snip).....

I believe they could sell the resort/property subject to the lease.

My understanding is that members bought a deeded interest in a right-to-use lease. We don't actually own the property.

 

[Dean]

I believe they could sell the resort/property subject to the lease.

My understanding is that members bought a deeded interest in a right-to-use lease. We don't actually own the property.

They could sell the rights to the land starting with the expiration of the ground lease, currently 31 Jan, 2042 as I alluded to in my previous note. They could sell any component they currently own and the management contract. The requirements inherent to running the property would remain with the new owners but the resort would not necessarily cont in the club though it still potentially could. I don't think there's much risk in this issue, the larger risk is from natural disasters, IMO. I do think it's very unlikely VB and HH will be extended even if the rest are but it's still possible.