Debating DVC Purchase

[sagosto]

Have you seen this yet @sagosto?

https://www.disboards.com/threads/p...tember-2019-2-bd-added.3689931/#post-59393039
This will help you understand how times you travel and room types (1 bedroom vs studio) affect the potential to trade out.

Jersey week is tough. You're really going to need to love your home resort. May is better for some resorts / rooms, though. I don't know how often you alternate.

Life is short. So, if we take the kids out for a week in May - so be it. It would be nice to get lucky and go to POLY/GFV every once in a while though.

 

[sagosto]

The nice thing about 132 resale at BWV, if you could always add more as your budget, desires or family grows.
Though the downside of starting there: studios at BWV are small. But still bigger than what you usually book.

Budget wise, taking into account the expiration of BWV, if re-sale values do poorly in the future, then it would be about break even. (Barring a total collapse in the re-sale market, those Riviera points would conservatively re-sell for $25-30k. If historic trends continue, they would re-sell for $40-50k in 20 years).

I wouldn’t factor in the blue card perk math except as a potential footnote. With direct points, if they bring back the Gold card perk, you would save about $2,000 per year, any time you did 2 trips in the same 12 months.

Budget is not a concern. Family won't grow. I guess resale isn't an issue if we don't sell RR and hand it down to the kids. It would be 'nice' if I had the option to sell RR in 10-20 years. However, like everyone, resale is a concern given it's special rules. $25-30K? You are assuming ~$150PP for my 200 points, correct?

I thought it was Blue Card? What's gold card? And, $2K saving? I assume on ticket discount?

 

[4luv2cdisney]

Life is short. So, if we take the kids out for a week in May - so be it. It would be nice to get lucky and go to POLY/GFV every once in a while though.

We always took the kids out of school when they were little. It does get harder as they get older, especially HS, and now we have college kids. Though the breaks are longer and the school year is a little shorter. Summer isn't an option for us. We figure it out.

 

[sagosto]

We always took the kids out of school when they were little. It does get harder as they get older, especially HS, and now we have college kids. Though the breaks are longer and the school year is a little shorter. Summer isn't an option for us. We figure it out.

I did summer when my wife and I were in college/law school. The heat just sucks. Before kids, we were May/Nov. After kids, Jersey week in Nov. My kid spends 1.5 hours per day in school and the school district is OK with it so my 1st grader can miss more to see Mickey even post-COVID.

 

[RoseGold]

Yes... THIS. We are simply getting into the window where I’d be hesitant to make a big initial investment into a 2042 resort. (Different story for a current BWV owner adding 50 points, etc).

In the short term, like around 5 years, I don't see it. Mathematically, they are already relatively low, and big drops would be so big percentage-wise against their cost, they would push the 2042s into SAP, which puts you in the ROFR crosshairs. I don't see that happening for properties as good as BW/BC, with those gorgeous legacy charts. The charts will look even better against whatever the next resort is. I can see this for BR.

The 2042s could drop significantly if the whole system drops, and they don't have time to recover, but they didn't seem to do that during Covid.

I don't book far enough out to use their advantages, but I think the math is solid for a BC/BW contract you don't plan to hold long, even with a significant drop. They start so low, that even unprecedented drop doesn't change the math much, and it's hard to argue with those charts.

Take this out to 10, 15 years, and who knows? I can actually see their price holding as people look for a little short term contract -- without all the 50 year baggage and the terrifying chart and gigantic buy-in over at BLT 3. If there were a 2030 contract and 2030 chart, I know it would be a good fit for me.

 

[4luv2cdisney]

Budget is not a concern. Family won't grow. I guess resale isn't an issue if we don't sell RR and hand it down to the kids. It would be 'nice' if I had the option to sell RR in 10-20 years. However, like everyone, resale is a concern given it's special rules. $25-30K? You are assuming ~$150PP for my 200 points, correct?

I thought it was Blue Card? What's gold card? And, $2K saving? I assume on ticket discount?

Blue card holders have (had) access to the DVC Gold Annual Pass. WDW is not selling new AP's at all right now. So, we all hope the Gold pass comes back when other APs do.

The Gold pass only has blockout dates around Easter and mid-dec thru New years. It is a good deal at $719. A 7 day parkhopper can cost that, so it's a no-brainer for 2 trips in a 12 month period.

 

[havoc315]

Budget is not a concern. Family won't grow. I guess resale isn't an issue if we don't sell RR and hand it down to the kids. It would be 'nice' if I had the option to sell RR in 10-20 years. However, like everyone, resale is a concern given it's special rules. $25-30K? You are assuming ~$150PP for my 200 points, correct?

I thought it was Blue Card? What's gold card? And, $2K saving? I assume on ticket discount?

Resale was a concern 2 years ago, when nobody knew what the affect of the rules would be. But now we see the affect -- Re-sale of Riviera is about $140-$150 per point. In 10-20 years, the "rules" will have even less effect on re-sale, because so many more resorts will have similar restrictions. (by way of illustration.. Even if they don't add any new restrictions.. solely continue to restrict new resorts, it means in 25 years, more than half the resorts will have the same restrictions as RIviera. Meanwhile, if you buy a "legacy" resort, you will only be able to use those points at a few resorts). Re-sale values tend to rise over time. (Direct pricing keeps increase.... Re-sale tends to stay 30-40% less than direct pricing, so as direct pricing increases, re-sale pricing increases as well..... Likely until you get to the last 10-15 years of a contract, at which point you'd expect to see pricing plummet).

Here you can see the average re-sale pricing at all resorts between 2016 and 2020:




2019 and 2020 were a bit even, with the 2020 pandemic depressing sales. But as you can see, there is generally a consistent upward trend in re-sale pricing.

In other words, if RIviera is $140 to $150 per re-sale point now, I wouldn't expect it to be much less than that in 15-20 years. More likely, it will be much higher than $140-$150. But there is no certainty.

In most cases, re-sale prices eventually rise above the initial direct prices:
For example, BLT is currently about $140-$160 for re-sale points. In 2008, Bay Lake Tower was $112 points -- DIRECT. So after 13 years, Bay Lake Tower re-sale points are about 40% MORE than direct points from 2018. Thus, my assumption of $150 per point in 20 years was very very conservative. If trends continues, you'd get $200-$250 per point re-sale for Riviera in 15-20 years, but I wouldn't rely on those trends. I discourage people from overly crunching the numbers, because there is so much uncertainty.

As to the Blue Card -- I meant to say the "Gold PASS" perk. The Gold Pass is an annual pass typically only available to Florida residents. It excludes Easter and Christmas, but is good for the rest of the year. Pre-pandemic, DVC members could buy a Gold Pass for about $750 each.
So do the math-- How much do you usually pay for tickets? $500-$600 per adult? So if you were taking 2 trips in 12 months, the Gold Pass can save you a lot of money.
But I'd only consider it a footnote -- Right now, Gold Pass sales are suspended (But DVC members who already had Gold Passes are able to renew them, and renewals are only $630 per person).

Basically, BWV has a great point chart and a fantastic location. It is difficult to book during Epcot festivals especially. It is a cheaper initial purchase.
The big downside -- After 20 more years, you're left with nothing. And re-sale value will likely evaporate within the next 5-15 years.
With a Riviera purchase, in 20 years, you can make the decision to either keep going for another 28 years... or re-sale it, and get back most of what you paid in the first place. Again, I wouldn't rely on detailed number crunching. But it's safe to say that Riviera will still have significant re-sale value or personal value use in 20 years. BWV will not.

 

[RoseGold]

Resale was a concern 2 years ago, when nobody knew what the affect of the rules would be. But now we see the affect -- Re-sale of Riviera is about $140-$150 per point.

We've seen a few dozen RIV resale contracts, that's not the pricing. The board sponsor had multiple listing prices of 139.

At this rate RIV sales will be dragging on for years, and increasing resale will make availability tighter, because the points will be locked at RIV. I think it's fair to say we do not know what the resale restriction will do to resale right now.

 

[havoc315]

In the short term, like around 5 years, I don't see it. Mathematically, they are already relatively low, and big drops would be so big percentage-wise against their cost, they would push the 2042s into SAP, which puts you in the ROFR crosshairs. I don't see that happening for properties as good as BW/BC, with those gorgeous legacy charts. The charts will look even better against whatever the next resort is. I can see this for BR.

Of course it will happen, because renting points will become significantly cheaper than buying points.

And it's really not worth buying just to own for 5 years -- Factoring in closing costs, you really aren't giving yourself a chance to get your money worth. Again, cheaper just to rent for 5 years, as opposed to buying.

Simple math:
Current rental rates are about $16 per point through Disboards..
So let's work it out to 150 points per year for 5 years:
Renting, you would pay: $2400 per year, or $12,000 total
Buying: 150 points at about $125 per point, $18,750 in purchase + $1,000 in closing costs + $5900 in dues over the 5 years: $25,650.
Now, let's factor in re-sale-- With only 15 years left in the contract by the time you sell, I'd expect re-sale prices to decline -- But let's give it a range, say $80 to $110 per point: So get back $12,000 to $16,500. But you have to pay commission -- So you only get back a range of $10,800 to $14,800...
So total cost of renting for 5 years: $12,000
Total cost of owning for just 5 years: $10,850 --14.850

So best case scenario, you saved maybe $1100 over 5 years by buying. Worst case scenario, you lost about $3000 by buying re-sale instead of just renting.

 

[RoseGold]

Current rental rates are about $16 per point through Disboards..

Sure, we've seen some $16 rental rates for Corona, but that's not BW rental rate even now, wasn't pre-Corona, and it certainly won't be in a year, or five years.

If BW tanks 40% in five years, the whole system has collapsed. Then, you'll be glad you rented, and especially glad you didn't buy RIV.

 

[havoc315]

We've seen a few dozen RIV resale contracts, that's not the pricing. The board sponsor had multiple listing prices of 139.

At this rate RIV sales will be dragging on for years, and increasing resale will make availability tighter, because the points will be locked at RIV. I think it's fair to say we do not know what the resale restriction will do to resale right now.

Actually, I expect availability at RIviera to be *better* because of all the non-Riviera resale contracts that CAN'T use Riviera.

Re-sale prices have been rising at Riviera lately. You may be looking at old listings that sold for $139..
The board sponsor has 3 active Riviera listings, here they are:



So I said $140 to $150... It's actually $144-$154.

Over the last few months, RIviera resale pricing has started to surpass BCV resale pricing. I think the 2042 resorts are starting to feel the effect of the 2014 expiration dragging down their prices.

 

[Brian Noble]

So best case scenario, you saved maybe $1100 over 5 years by buying. Worst case scenario, you lost about $3000 by buying re-sale instead of just renting.

It's a little worse than that for owning, because the dollars at resale time five years from now are worth less than the dollars you are spending now.

 

[havoc315]

Sure, we've seen some $16 rental rates for Corona, but that's not BW rental rate even now, and it certainly won't be in a year, or five years.

If BW tanks 40% in five years, the whole system has collapsed. Then, you'll be glad you rented, and especially glad you didn't buy RIV.

No, it's simple math. Once a resort only has 10-15 years left on the contract, you start getting to the point where it's mathematically impossible to get value.
Say there are only 10 years left in a contract, and dues are $8 per point. So you can rent for around $16-17 per point (not as hard as you make it out to be.. just saw a listing with an asking price of $17 per point for BWV). So just to break even versus renting, someone can't pay more than $8 per point per year: With 10 years left, that would only be $80 per point. With 15 years left, that would be $120 per point. Now, that's the MAXIMUM someone would pay, just to break even. But why pay a huge initial down payment unless you're getting at least some discount?!? Why pay $120 per point, when you can just pay the same price over 15 years? So... factor in that 20-40% discount..... You get a fair value for BWV at $72 to $96 in 5 years, and a fair value of $48 to $64 per point in 10 years. By the time there are only 5 years left on the contract, I'd expect a price of around $30 per point... By the time there are 2 years left in the contract, maybe $10 per point. And then 0.

Remember, BWV points will be worth $0 in 2042. It will be a steady decline until then.

 

[havoc315]

It's a little worse than that for owning, because the dollars at resale time five years from now are worth less than the dollars you are spending now.

Correct, but that's getting into a whole other layer of math. I was trying to simplify.

 

[4luv2cdisney]

Resale was a concern 2 years ago, when nobody knew what the affect of the rules would be. But now we see the affect -- Re-sale of Riviera is about $140-$150 per point. In 10-20 years, the "rules" will have even less effect on re-sale, because so many more resorts will have similar restrictions. (by way of illustration.. Even if they don't add any new restrictions.. solely continue to restrict new resorts, it means in 25 years, more than half the resorts will have the same restrictions as RIviera. Meanwhile, if you buy a "legacy" resort, you will only be able to use those points at a few resorts). Re-sale values tend to rise over time. (Direct pricing keeps increase.... Re-sale tends to stay 30-40% less than direct pricing, so as direct pricing increases, re-sale pricing increases as well..... Likely until you get to the last 10-15 years of a contract, at which point you'd expect to see pricing plummet).

Here you can see the average re-sale pricing at all resorts between 2016 and 2020:

View attachment 565320


2019 and 2020 were a bit even, with the 2020 pandemic depressing sales. But as you can see, there is generally a consistent upward trend in re-sale pricing.

In other words, if RIviera is $140 to $150 per re-sale point now, I wouldn't expect it to be much less than that in 15-20 years. More likely, it will be much higher than $140-$150. But there is no certainty.

In most cases, re-sale prices eventually rise above the initial direct prices:
For example, BLT is currently about $140-$160 for re-sale points. In 2008, Bay Lake Tower was $112 points -- DIRECT. So after 13 years, Bay Lake Tower re-sale points are about 40% MORE than direct points from 2018. Thus, my assumption of $150 per point in 20 years was very very conservative. If trends continues, you'd get $200-$250 per point re-sale for Riviera in 15-20 years, but I wouldn't rely on those trends. I discourage people from overly crunching the numbers, because there is so much uncertainty.

As to the Blue Card -- I meant to say the "Gold PASS" perk. The Gold Pass is an annual pass typically only available to Florida residents. It excludes Easter and Christmas, but is good for the rest of the year. Pre-pandemic, DVC members could buy a Gold Pass for about $750 each.
So do the math-- How much do you usually pay for tickets? $500-$600 per adult? So if you were taking 2 trips in 12 months, the Gold Pass can save you a lot of money.
But I'd only consider it a footnote -- Right now, Gold Pass sales are suspended (But DVC members who already had Gold Passes are able to renew them, and renewals are only $630 per person).

Basically, BWV has a great point chart and a fantastic location. It is difficult to book during Epcot festivals especially. It is a cheaper initial purchase.
The big downside -- After 20 more years, you're left with nothing. And re-sale value will likely evaporate within the next 5-15 years.
With a Riviera purchase, in 20 years, you can make the decision to either keep going for another 28 years... or re-sale it, and get back most of what you paid in the first place. Again, I wouldn't rely on detailed number crunching. But it's safe to say that Riviera will still have significant re-sale value or personal value use in 20 years. BWV will not.

I agree with some of this, but at some point you have to decide:

Do I have to get the best deal out there or do I just have to get a better deal than I'm getting now (paying cash for a mod).

Decide what's important to you and keep the focus on that. You could crunch numbers forever and still not be sure what will really happen in the future.

IMO, the goal should be an enjoyable vacation at a price you're comfortable paying. Not to compete with the rest of the DISboard and walk away the "winner" of the best deal. Although @havoc315, I think I'd gladly take those $63 GC points for SAP (please and thank you) and declare myself the "winner"!

 

[Sandisw]

We've seen a few dozen RIV resale contracts, that's not the pricing. The board sponsor had multiple listing prices of 139.

At this rate RIV sales will be dragging on for years, and increasing resale will make availability tighter, because the points will be locked at RIV. I think it's fair to say we do not know what the resale restriction will do to resale right now.

We also do not know if those that buy RIV will sell in the short term at the same rate that other owners at previous resorts have done,

So, if owners who bought RIV don’t sell, then the supply won’t meet the demand, RIV is popular resort for many people and the fact that what has happened in 2 years since sales started is higher than the average, the dire predictions that RIV would tank out of the gate has just not happened,

In 10 years, there is very little chance that BWV is selling as well as RIV on resale. In 20 years, RIV will definitely be more than BWV.

Honestly, I am not sure someone should even buy DVC if they want to own only around 10 years.

 

[havoc315]

I agree with some of this, but at some point you have to decide:

Do I have to get the best deal out there or do I just have to get a better deal than I'm getting now (paying cash for a mod).

Decide what's important to you and keep the focus on that. You could crunch numbers forever and still not be sure what will really happen in the future.

IMO, the goal should be an enjoyable vacation at a price you're comfortable paying. Not to compete with the rest of the DISboard and walk away the "winner" of the best deal. Although @havoc315, I think I'd gladly take those $63 GC points for SAP (please and thank you) and declare myself the "winner"!

I agree, I discourage people from "over number crunching." This isn't an investment. It's a purchase you make for your own happiness.
I simply don't ignore the numbers -- If someone loves BCV and hates every other resort, go get BCV even though the numbers don't work out great right now, for example. On the other hand, if someone is weighing a few options that they like pretty equally, I would look at whether there is a signficant difference in the long term costs.

 

[princesscinderella]

Budget is not a concern. Family won't grow. I guess resale isn't an issue if we don't sell RR and hand it down to the kids. It would be 'nice' if I had the option to sell RR in 10-20 years. However, like everyone, resale is a concern given it's special rules. $25-30K? You are assuming ~$150PP for my 200 points, correct?

I thought it was Blue Card? What's gold card? And, $2K saving? I assume on ticket discount?

We just bought RIV and we tried to future proof our purchase on the resale market by buying a fixed week that will always correspond to New Years which is the most in demand time. What’s nice is you are not locked into using it and it can function like regular points. We got a standard studio so the contract would not be too large to sell later on if we need to. Part of the concern of buying RIV resale is being locked out with no rooms when you want to travel and no where to exchange it to. That’s why I think the fixed week is worth it there. Even if you never actually use the fixed week.

 

[RoseGold]

The straight-line depreciation for BW is $5.8. At five years, that would make BW 104.8.

No DVC property has ever depreciated at the straight-line rate, even depreciating at all would be a big departure from the historic math. I can't see BW/BC as the outlier on quick depreciation. I also agree they will depreciate quickly at the end of their lifespan, which makes the short term depreciation lower. I think a 2042 BC/BW in 2032 is a very appealing property and chart. I can see the entire system depreciating quickly, but that's a different discussion.

https://www.dvcresalemarket.com/blog/best-economical-dvc-resort-to-purchase-fall-2020/

 

[sagosto]

Resale was a concern 2 years ago, when nobody knew what the affect of the rules would be. But now we see the affect -- Re-sale of Riviera is about $140-$150 per point. In 10-20 years, the "rules" will have even less effect on re-sale, because so many more resorts will have similar restrictions. (by way of illustration.. Even if they don't add any new restrictions.. solely continue to restrict new resorts, it means in 25 years, more than half the resorts will have the same restrictions as RIviera. Meanwhile, if you buy a "legacy" resort, you will only be able to use those points at a few resorts). Re-sale values tend to rise over time. (Direct pricing keeps increase.... Re-sale tends to stay 30-40% less than direct pricing, so as direct pricing increases, re-sale pricing increases as well..... Likely until you get to the last 10-15 years of a contract, at which point you'd expect to see pricing plummet).

Here you can see the average re-sale pricing at all resorts between 2016 and 2020:

View attachment 565320


2019 and 2020 were a bit even, with the 2020 pandemic depressing sales. But as you can see, there is generally a consistent upward trend in re-sale pricing.

In other words, if RIviera is $140 to $150 per re-sale point now, I wouldn't expect it to be much less than that in 15-20 years. More likely, it will be much higher than $140-$150. But there is no certainty.

In most cases, re-sale prices eventually rise above the initial direct prices:
For example, BLT is currently about $140-$160 for re-sale points. In 2008, Bay Lake Tower was $112 points -- DIRECT. So after 13 years, Bay Lake Tower re-sale points are about 40% MORE than direct points from 2018. Thus, my assumption of $150 per point in 20 years was very very conservative. If trends continues, you'd get $200-$250 per point re-sale for Riviera in 15-20 years, but I wouldn't rely on those trends. I discourage people from overly crunching the numbers, because there is so much uncertainty.

As to the Blue Card -- I meant to say the "Gold PASS" perk. The Gold Pass is an annual pass typically only available to Florida residents. It excludes Easter and Christmas, but is good for the rest of the year. Pre-pandemic, DVC members could buy a Gold Pass for about $750 each.
So do the math-- How much do you usually pay for tickets? $500-$600 per adult? So if you were taking 2 trips in 12 months, the Gold Pass can save you a lot of money.
But I'd only consider it a footnote -- Right now, Gold Pass sales are suspended (But DVC members who already had Gold Passes are able to renew them, and renewals are only $630 per person).

Basically, BWV has a great point chart and a fantastic location. It is difficult to book during Epcot festivals especially. It is a cheaper initial purchase.
The big downside -- After 20 more years, you're left with nothing. And re-sale value will likely evaporate within the next 5-15 years.
With a Riviera purchase, in 20 years, you can make the decision to either keep going for another 28 years... or re-sale it, and get back most of what you paid in the first place. Again, I wouldn't rely on detailed number crunching. But it's safe to say that Riviera will still have significant re-sale value or personal value use in 20 years. BWV will not.

I've run the numbers 234094924094290 different ways and it's speculation as who knows the future. Yes, BWV is great for all the reasons but it's nothing in 20 years. RR even with the resale restrictions is a better option for us given the additional 29 years and the assumption I could unload it with w/o too much concern for a loss. Or, we just keep it. Poly/GFV is a more expensive option but at least I got a shot of getting in with my RR points (w/ the $21PP savings now). My buddy was trying to talk into BLT but resale is scaring me more and more especially in 2042 when several resorts come off the market.

I think the real question is: how many RR direct points? 161 is needed for our typical 9 night Nov but 200 points is a $2K additional savings. My only major gripe is the near 50% increase for a 1BR. Wife puts a TON of stock into the in-room laundry and kitchen.