#### Gordon Gekko

##### Mouseketeer

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- Feb 29, 2016

- Thread starter Gordon Gekko
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- Feb 29, 2016

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- Nov 15, 2008

Then, if you are torn between a few, expiration can play a role. I would not buy Poly over SSR because you are getting 12 more years if dont Think you’d ever want to stay there.

i did sell BWV last year to buy RIV with my adult kids because of expiration but also because they really like that new resort so it made sense..not to mention I sold for more than $50/point over what I paid!

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- Aug 15, 2015

I’d look at where you want to stay, where you are okay staying if there’s no availability to move at 7 mo, where you don’t want to stay.

Also poly only has studios no 1 and 2 bedrooms.

Something to also look at is purchasing two contracts same use year but different home resorts. This would give you the 11 mo home advantages. Plus if you decide you need to sell some later you can sell one contract if needed.

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- Jan 21, 2020

At DVC Resale Market, we like to keep an economic Disney Vacation Club (DVC) Resort ranking maintained as prices, dues, resorts and Disney can change over time.

www.dvcresalemarket.com

Within the top few, the differences are minor, so it's considerations like how much you want to pay upfront and what 11 month priority you want.

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- Aug 12, 2008

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- Jun 25, 2019

The mathematical formula to value the out years is a geometric progression. X=((1-r)^n)/(0-r) where n is the number of years left and r is the deflation rate. I’d suggest taking what you’re making on average in your retirement accounts over the last several years, and subtract either 3.5% (DVC inflation rate) if you think you would rebuy when the contract expires, or 2% If you think you wouldn’t. So if you’re average is 8% then r in your equation would be 0.055.

X is the the equivilized number of years left for The various resorts represented in today’s dollars. So BCV/BRV/BWV in this example would be 12.3 current years, SSR 15.4, Riviera 17.1. Divide purchase price by equivilized years and add dues to get an apples to apples comparison to cash prices, points renting, or to compare resorts.

X is the the equivilized number of years left for The various resorts represented in today’s dollars. So BCV/BRV/BWV in this example would be 12.3 current years, SSR 15.4, Riviera 17.1. Divide purchase price by equivilized years and add dues to get an apples to apples comparison to cash prices, points renting, or to compare resorts.

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- Feb 29, 2016

I do follow you. If you were going to take a chunk of money with the thought of using some points and renting the rest to cover dues each year. (Ex: Buy 250 Poly points. If I used 100 personally and rented 150 at a normal going rate I should cover dues every year.) Then I believe it swings more in favor of buying resale because I would be paying $679.35/year for 46 years to use 100 points/year.The mathematical formula to value the out years is a geometric progression. X=((1-r)^n)/(0-r) where n is the number of years left and r is the deflation rate. I’d suggest taking what you’re making on average in your retirement accounts over the last several years, and subtract either 3.5% (DVC inflation rate) if you think you would rebuy when the contract expires, or 2% If you think you wouldn’t. So if you’re average is 8% then r in your equation would be 0.055.

X is the the equivilized number of years left for The various resorts represented in today’s dollars. So BCV/BRV/BWV in this example would be 12.3 current years, SSR 15.4, Riviera 17.1. Divide purchase price by equivilized years and add dues to get an apples to apples comparison to cash prices, points renting, or to compare resorts.

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- Jun 25, 2019

I don’t think the math is currently favorable on buying points with the explicit intent of renting them out to cover dues; I’ve run the math before - maybe if the overall resale market shifts downward that would work.I do follow you. If you were going to take a chunk of money with the thought of using some points and renting the rest to cover dues each year. (Ex: Buy 250 Poly points. If I used 100 personally and rented 150 at a normal going rate I should cover dues every year.) Then I believe it swings more in favor of buying resale because I would be paying $679.35/year for 46 years to use 100 points/year.

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- Aug 12, 2008

Yeah, you can make it work out but it has to be the right deal. I looked at a big 450 point SSR contract that was super loaded the other day (450 points that needed to be used by Feb, 900 coming in Feb etc) and at $90 a point it worked out, although that contract has about a 10% chance of passing ROFR right now. I figured renting at $15 a point and dues of 6.76. So "profit" would be $8.24 a point or $3708 a year. Initial investment would be $40k so "break even" would be 11 years (before even considering time value of money). But the loaded part has a lot of value since the 450 that expire in feb could have made maybe $4000 if rented for $9 a point, and the 450 banked points did not have fees so that's a pure profit of $6750. So assuming you could rent those banked points out it takes about 10k off of your upfront capital (in a way) which brings break even to 8 years. But i took too long looking at the math and in the few hours I thought about it another buyer put a deposit down on it.I don’t think the math is currently favorable on buying points with the explicit intent of renting them out to cover dues; I’ve run the math before - maybe if the overall resale market shifts downward that would work.

I don't think you can make the math work out on a $130+ per point contract since you really can't get enough of a premium on rental points at those resorts to make up the delta on the upfront cost and the dues (on the resorts with higher dues).

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- Jun 25, 2019

Time value of Money makes the calculation worse not better. I agree I saw on SSR and OKW it is possible to run ahead with the right contract even when considering TVM/opportunity cost, however, I think there’s a lot more risk that the rental market will correct or collapse than there is that the resale market will correct or collapse, not to mention the risk of a sharp dues increase turning the math on its head (it’s happened, rarely, but it has) or a natural disaster leading to an assessment which breaks the math. So I’d prefer to lessen my exposure and pay the dues in cash. Not that you are necessarily wrong to do differently, just a different comfort level with risk.Yeah, you can make it work out but it has to be the right deal. I looked at a big 450 point SSR contract that was super loaded the other day (450 points that needed to be used by Feb, 900 coming in Feb etc) and at $90 a point it worked out, although that contract has about a 10% chance of passing ROFR right now. I figured renting at $15 a point and dues of 6.76. So "profit" would be $8.24 a point or $3708 a year. Initial investment would be $40k so "break even" would be 11 years (before even considering time value of money). But the loaded part has a lot of value since the 450 that expire in feb could have made maybe $4000 if rented for $9 a point, and the 450 banked points did not have fees so that's a pure profit of $6750. So assuming you could rent those banked points out it takes about 10k off of your upfront capital (in a way) which brings break even to 8 years. But i took too long looking at the math and in the few hours I thought about it another buyer put a deposit down on it.

I don't think you can make the math work out on a $130+ per point contract since you really can't get enough of a premium on rental points at those resorts to make up the delta on the upfront cost and the dues (on the resorts with higher dues).

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- Nov 15, 2008

No more MFs and a contract worth $0 as the timeshare is over.

I agree. Unless you are planning to ride that DVC into the sunset, I’m not sure I would buy into any 2042 DVC right now. You are paying max price for it. Five years from now? I don’t think it will hold half that value (like I really have a magic ball- I don’t!) Prices will tank if there are no extensions (and after OKW fiasco, I don’t think they will be offering that) and Disney won’t exercise ROFR I would not think, except for BW, which it looks like they have a master plan for.....

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- Feb 21, 2013

I kind of disagree; I own 250 points at boardwalk and I think I for one would buy another 250 points at half of price today In 5 years... that would be $60 ish. there are a lot of unknowns but I would think with 15 years left I might think it is worth $80 or $90. Just my opinion.I’m not sure I would buy into any 2042 DVC right now. You are paying max price for it. Five years from now? I don’t think it will hold half that value (like

Not knocking BCV, I was an owner there for 6 years, sold my contract, and made money on that, even after paying closing fees and brokerage fees.

now, in 5-6 years, if I wanted to buy BCV for the end of contract, paying 60 or 70 pp might be more palatable. I just don’t want to be the owner that buys at 145 and sells at 60.

Just my opinion, and I always have plenty of them....

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- May 3, 2004

Would agree. We just rented out last years points as we couldn't use them. The price we got was enough to cover dues plus about 20%. At that rate, I'm not sure you could get back what you paid before the deed expires. Almost certainly you could do better investing that money.I don’t think the math is currently favorable on buying points with the explicit intent of renting them out to cover dues; I’ve run the math before - maybe if the overall resale market shifts downward that would work.