Buying resale contract vs. renting points -- where is the cutoff?

[Adam723]

Not quite sure I understand what you mean that you paid equivalent of $22/pt for a Boardwalk contract, please explain.

I agree on the $130/pt price for BCV. I think the cutoff for BCV/BWV should be about $120/pt given the 2042 expiration, and only then should it be more about convenience than the math.

You take your upfront cost + dues until 2042 (You need to estimate this. I use 4.5% increase per year). Take this number and divide by the number of points total you will get in the life of the contract.

 

[cruisehopeful]

I know that my take on this is very unusual, but I would never buy DVC unless I was comfortable with the possibility that it could be worthless on resale.

Same with me. I only bought thinking of it just like any vacation that doesn't pay me back later. I plan on using it and the thought of getting anything back from it never entered my Mickey Math.

 

[VGCgroupie]

I do.

Is it likely? I have no idea. But it is definitely possible. I watched prices crater during the Great Recession, and given the current global financial uncertainty, I cannot tell you that won't happen again.

I know that my take on this is very unusual, but I would never buy DVC unless I was comfortable with the possibility that it could be worthless on resale.

I bought assuming worthless. But now that I own and have been watching and researching DVC I know that isn't going to happen (unless you keep it til expiration), really the only way that happens is some sort of dire situation economically etc. But if that happens any portfolio investments you have made will have also likely tanked too.

The OP was basing his analysis based on rental rates (which is also how I would do it) and not cash rates. IMO that's a much fairer analysis, and looks at a much more competitive market that available to all who choose it.

It does feel great to stay at Aulani with subsidized points and then see that that 2BR is priced at $2900/night after tax. But how many people actually pay $20,000 per week for accommodations, even when they can theoretically afford it? In my case, I would absolutely never pay (even the discounted) cash rates, whether it's the DVC timeshares or Marriott timeshares, so they are a lot less relevant to my comparisons. It's kind of the same to me with the analyses that value credit card point at like 10c per point because you can transfer to some airline and book an overpriced business class seat that you'd probably never pay for otherwise. If I wouldn't pay for it, then it not worth that value (to me). So I cannot in good faith base financial decisions off those numbers.

Right, no way I would stay in the GV at Aulani on cash. I actually would not renting either, way too much money. That is the beauty of owning DVC you can do things like that. I am staying in the GV at Aulani next month and able to bring my family. DVC is amazing and Im grateful that I finally learned about resale and took the plunge.

If I take the stay that I did right before buying my 1st contract and I had used that money to buy DVC instead that contract would have already paid for itself also assuming worthless at resale. If i had rented points it would've only been a $1900 difference. I can surely make up that $1900 quickly. Also the rental market right now is a bit tumultuous right now, I never would have rented in the past because its too much of a gamble for me but its even more of a gamble currently.

 

[VGCgroupie]

I realize I should have prefaced my feelings are based off of buying resale not direct. Direct is a different animal and just like a new vs used car when driving off the lot and its value. Although my direct purchase I have owned just under a year I could sell right now and I would not have lost any money even when factoring in selling fees. (my situation isn't average in regards to direct purchases)

 

[Brian Noble]

I know that isn't going to happen

You believe that isn't going to happen. You are probably right. In fact, if I were a betting man, I'd bet on it.

But unless you own a time machine and/or happen to have The Sight, you don't know.