Direct vs Resale - Length of contract considerations

[mustinjourney]

Thanks for the comments. Some good additional insights on the cons of BCV. Albeit, knowing my family and our travel preferences, I feel pretty good about that. Although I will concede that BWV could be a good option as well. Some of the comments about age, and "growing out of SAB", actually lend themselves to the side of purchasing the shorter term contract, so that we know what we're getting for a more condensed period of time, as opposed to banking on the wants of my kids and my kids' kids in 50 years. So thanks for those reassuring comments. It is a $ premium I understand, but DVC in and of itself is a premium luxury product, as espoused on these boards over and over. As for the suggestion of "try it out first", that kind of defeats the purpose of the switch from staying at the hotels vs the DVC route. We have 4 kids, so that limits us on the accommodations we can reasonably stay in (while abiding the "fire code"). We stayed at AofA recently, and it wasn't our cup of tea. We've stayed at numerous other properties also at WDW and DL, both with and without children, unfortunately BCV isn't one of them. To try out BCV rental or BC/YC first, would be another $4-5K endeavor, and although sounds great, the whole point was to put that towards a DVC contract instead, as we have Aulani plans on the horizon as well. So at some point I need to take confidence in our past travel/visit experiences, coupled with visits to the BC property (albeit without access to the pool or rooms) to determine that it would be a good option for our family. With that said, I think I should look closer at BWV as well. So any remarks on that are appreciated.

I know others will disagree -- but I'm with you on the costs of waiting.

Going on a cash reservation is easily $2000 to $4000 more for a week than using your own DVC points. Granted, you could go the rental route by renting points from a DVC owner -- but there are also risks associated with that.

In my view, as long as you don't completely overpay on your RESALE contract, even if you hate it, you can turn around and sell it later for minimal loss.

Yes -- there are risks involved. However, a 100% chance of paying $2000 extra for a cash reservation is worse than a 10% chance of losing $3000 on having to get out of your DVC contract after 1 year.

 

[mustinjourney]

That's an issue with most DVC properties. Quick Service for BC Villas in is the main building - through the portcullis from the BCV rooms. Boulder Ridge also has its quick service in the main building - and you are walking outside to get it. VAKL has long walks to Mara, BLT its in the main building. Poly its in the main building. OKW its in the main building. SSR its in the main building. I can't think of a DVC resort off hand where the quickservice location is convienent to the Villas.

It's really not that far though at BCV. SAB is a decent hike, but still not too bad.

 

[crisi]

It's really not that far though at BCV. SAB is a decent hike, but still not too bad.

It isn't all that far at BWVs either - if your room is close to the lobby. If your room is on the back end of any of the big resorts - CRO or DVC - you can burn off all your breakfast calories in the stroll.

 

[Dean]

I know others will disagree -- but I'm with you on the costs of waiting.

Going on a cash reservation is easily $2000 to $4000 more for a week than using your own DVC points. Granted, you could go the rental route by renting points from a DVC owner -- but there are also risks associated with that.

In my view, as long as you don't completely overpay on your RESALE contract, even if you hate it, you can turn around and sell it later for minimal loss.

Yes -- there are risks involved. However, a 100% chance of paying $2000 extra for a cash reservation is worse than a 10% chance of losing $3000 on having to get out of your DVC contract after 1 year.

The real cost of waiting is the cost of the rental minus the dues one would have paid minus any incremental decrease as the RTU ages. But it often causes people to make poor choices by rushing trying to get the first visit, it's not worth it if one isn't completely versed in DVC OR if it makes one act rashly for a bed contract.

 

[jagron11]

The real cost of waiting is the cost of the rental minus the dues one would have paid minus any incremental decrease as the RTU ages. But it often causes people to make poor choices by rushing trying to get the first visit, it's not worth it if one isn't completely versed in DVC OR if it makes one act rashly for a bed contract.

Who said anything about rushing? And what makes BCV such a bad "value"? Relative to what? I think we discussed length of contract (what started this thread)? But what makes it so bad? You seem to be very very down on the property, why is that? Or are you down on DVC as a whole? What is the better value and what are the indicators used to derive that value calculation?

 

[disneynutz]

As much as we try to help buyers decide, our experiences, tastes, likes and dislikes may not match the buyers. I suggest that you just buy a resort to experience DVC for yourself. It may be your best guess of which resort will be your favorite or SSR for the lower initial cost. The difference is you know going in that you will probably sell your initial resort and buy your true favorite in a few years after you have stayed at several resorts for yourself. So many buyers seem to treat DVC as a lifelong purchase that you can't modify, that isn't true, we buy and sell and have changed from what we knew would be our favorite resort to resorts that we keep in our vacation rotation.

Being able to stay where you want, when you want without having to play the waitlist game, hoping to get the resort and room that you want is worth the extra money if any. Spending thousands on the DVC and Disney vacations and not getting your favorite resort/room just doesn't make sense IMO.

Bill

 

[crisi]

Who said anything about rushing? And what makes BCV such a bad "value"? Relative to what? I think we discussed length of contract (what started this thread)? But what makes it so bad? You seem to be very very down on the property, why is that? Or are you down on DVC as a whole? What is the better value and what are the indicators used to derive that value calculation?

I can't speak for Dean, but BCV is a good value only if that is what you really want. You do pay a premium for those points - and unlike BWV there isn't the availability of standard view to drive the cost per point down over the life of the contract if you'd choose. I'm of the belief that anything is a good value if it is what you value - and can afford it. My husband's Mercedes is a darn expensive car, but since he enjoys it and we could afford it, its been a good value for us - even though a Camry would have gotten him to and from work for a quarter of the cost.

The issue is that the OP isn't sure BCV is really what he wants long term. And if he spends the extra to get BCV and BWV would work just as well long term in his families happiness with their vacation because what they turn out valuing is proximity to Epcot, then BCV is a "bad value." If it turns out what they value is being at Disney, than anything other than SSR is a "bad value." But if he buys BCV and ends up not being happy anywhere else - SAB is his dream pool, he loves the decor and layout, the shortest possible path into Epcot is wonderous, and he isn't kicking himself over the extra cash when it comes time to pay for college or put a new roof on the house, then its a great value.

 

[jagron11]

I can't speak for Dean, but BCV is a good value only if that is what you really want. You do pay a premium for those points - and unlike BWV there isn't the availability of standard view to drive the cost per point down over the life of the contract if you'd choose. I'm of the belief that anything is a good value if it is what you value - and can afford it. My husband's Mercedes is a darn expensive car, but since he enjoys it and we could afford it, its been a good value for us - even though a Camry would have gotten him to and from work for a quarter of the cost.

The issue is that the OP isn't sure BCV is really what he wants long term. And if he spends the extra to get BCV and BWV would work just as well long term in his families happiness with their vacation because what they turn out valuing is proximity to Epcot, then BCV is a "bad value." If it turns out what they value is being at Disney, than anything other than SSR is a "bad value." But if he buys BCV and ends up not being happy anywhere else - SAB is his dream pool, he loves the decor and layout, the shortest possible path into Epcot is wonderous, and he isn't kicking himself over the extra cash when it comes time to pay for college or put a new roof on the house, then its a great value.

Thanks and well reasoned, Crisi. And I AM the original poster. That's why I was following up. I know it's where we want to be for at least the next 3 trips to WDW. Location and amenities (including SAB). Throw in a trip to Aulani in that 5 year or so time frame and I'm pretty close to getting the value I'd expect to pay out of pocket. With hopefully some bonus trips on the backend. I was really wondering was it that bad compared to a newer longer term contract (original post). I would say, however, I will research BWV a little close because that seems to be closer comparison, given proximity to Epcot and that whole entertainment area.

 

[Dean]

Who said anything about rushing? And what makes BCV such a bad "value"? Relative to what? I think we discussed length of contract (what started this thread)? But what makes it so bad? You seem to be very very down on the property, why is that? Or are you down on DVC as a whole? What is the better value and what are the indicators used to derive that value calculation?

You may not be but almost always trying to get that next trip out of the membership as a "savings" equates to rushing and that's how I read a previous post of yours. IMO BCV is standard view at Preferred view prices but I know some disagree and it's at least $10 pp more than BWV and really more if you would do standard view at all. When you look overall at price per point and dues, I'd consider it in the range of Poly retail from a real cost standpoint. But if you have enough direct experience to know (not just think) that's where you want to be because you've stayed there and you project it'll be your long term go to, I don't think it's a bad choice but for all other situations I feel it is. The assumes that buying DVC in general is a reasonable choice which is the most important decision anyway, IMO.

 

[crisi]

Thanks and well reasoned, Crisi. And I AM the original poster. That's why I was following up. I know it's where we want to be for at least the next 3 trips to WDW. Location and amenities (including SAB). Throw in a trip to Aulani in that 5 year or so time frame and I'm pretty close to getting the value I'd expect to pay out of pocket. With hopefully some bonus trips on the backend. I was really wondering was it that bad compared to a newer longer term contract (original post). I would say, however, I will research BWV a little close because that seems to be closer comparison, given proximity to Epcot and that whole entertainment area.

I own at BWV and we did a BCV trip. I ended up really disliking BCV - it made me very happy we didn't buy there (it was what was direct when we bought oh those many years ago - we bought BWV resale instead of BCV direct). For me, the biggest issue was that you walk through the lobby to get to SAB. I'm a woman vain enough and past the age where I really want people seeing me in a swimsuit anywhere other than next to or in the pool - even in a coverup - and walking through the rather fancy BC/YC lobby in my flip flops and coverup set my teeth on edge. It can be the little things that make or break a resort for you - and that would have been one I wouldn't have really figured out without staying there.

For some people it works the other way - they love BCV, but the clown side at BWV gives them flashbacks to Stephen King novels.

(ETA - Dean has a point - the views at BCV aren't great. If view is important to you, IMHO it isn't a great resort. If you don't spend time looking out the window or sitting on the balcony anyway, then that shouldn't be a factor.)

 

[mustinjourney]

Do a search of BWV vs BCV here on the boards and you will see a few good discussions. Should help you with your research.

 

[KAT4DISNEY]

I own at BWV and we did a BCV trip. I ended up really disliking BCV - it made me very happy we didn't buy there (it was what was direct when we bought oh those many years ago - we bought BWV resale instead of BCV direct). For me, the biggest issue was that you walk through the lobby to get to SAB. I'm a woman vain enough and past the age where I really want people seeing me in a swimsuit anywhere other than next to or in the pool - even in a coverup - and walking through the rather fancy BC/YC lobby in my flip flops and coverup set my teeth on edge. It can be the little things that make or break a resort for you - and that would have been one I wouldn't have really figured out without staying there.

For some people it works the other way - they love BCV, but the clown side at BWV gives them flashbacks to Stephen King novels.

(ETA - Dean has a point - the views at BCV aren't great. If view is important to you, IMHO it isn't a great resort. If you don't spend time looking out the window or sitting on the balcony anyway, then that shouldn't be a factor.)

One of my biggest things about BCV too is the route to get to SAB from the Villas. And also the slide entrance across the walkway. One time doing that while walking thru the convention goers in their suits was enough to make me second think doing it again. That and the slide is such a bore IMO. Didn't use it for a long time and when I finally did I was like really? That's it? I think Aulani had been our trip just before I tried the slide at BCV and BCV couldn't compare to the Aulani slide. At WDW we far prefer the Clown pool slide at BWV.

 

[crisi]

One of my biggest things about BCV too is the route to get to SAB from the Villas. And also the slide entrance across the walkway. One time doing that while walking thru the convention goers in their suits was enough to make me second think doing it again. That and the slide is such a bore IMO. Didn't use it for a long time and when I finally did I was like really? That's it? I think Aulani had been our trip just before I tried the slide at BCV and BCV couldn't compare to the Aulani slide. At WDW we far prefer the Clown pool slide at BWV.

That's funny - there was a Gartner convention happening when I was there - and my CIO was supposed to be in attendance. I'm walking through the BC lobby with my backend hanging out from my coverup (it doesn't sit as high as it did when I was seventeen), through men in suits, thinking "please have booked over at the Swan!" I actually own a much longer Disney coverup as a result of that trip.

 

[ziravan]

When I first looked at DVC in 2014, I had started my search looking for a reservation to rent. I did stay that year on a rented reservation (and 4 more times in the rolling year on my own points, including points that I transferred in).

Researching renting got me interested in buying a contract. Since I had started searching here and never heard a sales pitch, I started looking at resales from the start.

I looked closely at all three standard purchase philosophies:

Buy cheapest combo of MFs/price/length of contract - SSR

Buy where you don't mind staying - AKV

Buy where you want to stay - ?????

I had originally dismissed both BCV and BWV because it's easy to get the idea on the boards that they are "boutique" resorts in that their value is staying at 11 months at Fall Frenzy and buying for any other reason would be a waste of money. And I was interested in the 7 month option.

So. With those two resorts crossed off my list, I started to look at AKV as possibly both where I didn't mind staying and where I wanted to stay.

But I kept thinking about SAB.

One day looking at AKV contracts (a routine internet habit at that time), I flipped to BCV and found a weirdly loaded contract sort of discounted a few dollars per points (2014 points used, 2015 points borrowed into 2014, no 2015 points, all 2016 points).

I talked with my DW, she green lighted and I offered $2 less per point and it was accepted. Turns out buying 250 BCV for $84/point in 2014 was a pretty good deal.

We had never stayed at BCV when we bought. Since then, we added on at Poly. DW still thinks BCV is our best contract.

We love it there.

 

[Littlelulu01]

A simple way to compare the price of contracts is to divide the price per point by years remaining and add maintenance fees. In your example:

CCV - $176 / 50 Years = $3.52 + $7.33 MF = $10.85

BCV - $105 / 25 Years = $4.20 + $6.27 MF = $10.47

Beach Club still comes out a little cheaper, but Beach Club and Boardwalk tend to be the "most expensive" (relative to years remaining) resale resorts. Take a BLT contract as a comparison...

BLT- $110 / 43 Years = $2.56 +$5.62 MF = $8.18

When using this comparison on a new vs 2042 resort isn't the value of resale worth something too? I look at this and see the two about the same value but in 25 years the 2042 resort is worth zero and the CCV is still most likely worth the purchase price. I guess that's the main reason I could not bring myself to pay $105 per point vs. $50-$85 max for any of the other 2042 resorts. Of course if you only want to stay at bcv for the next 25 years then you should purchase bcv. Dvc will only grow. I think that after Aulani sells out a lot of those points will also be competing for the 7 month wdw window so the purchase where you want to stay will only become more important as time passes.

 

[ziravan]

When using this comparison on a new vs 2042 resort isn't the value of resale worth something too? I look at this and see the two about the same value but in 25 years the 2042 resort is worth zero and the CCV is still most likely worth the purchase price. I guess that's the main reason I could not bring myself to pay $105 per point vs. $50-$85 max for any of the other 2042 resorts. Of course if you only want to stay at bcv for the next 25 years then you should purchase bcv. Dvc will only grow. I think that after Aulani sells out a lot of those points will also be competing for the 7 month wdw window so the purchase where you want to stay will only become more important as time passes.

You've hit upon the "OKW Extension Problem".

What's today's value of points 25 from now?

To consider that, the time value of money, which we routinely set aside in these discussions, becomes paramount. A CCV property worth $150/pt for 28 yrs of contract in 2042 isn't worth nearly that much today.

In real terms, when you're looking at $176 for 50 yrs vs $105 for 25 yrs, the value for point over the life of the contract might be equal, but you're frontloading much of that CCV cost in today's dollars.

For a 100 point contract, that CCV contract is costing you $17,600 and the BCV $10,500 in 2017 dollars.

In that case, I think you could make the argument that spending $10,500 today and investing $7,100 for the next 25 yrs in order to buy a replacement contract in 2042 might be a much better deal.

Especially if you were to decide in 2042 that you were done.

 

[ziravan]

A much bigger concern isn't what the value of BCV will be at end of contract in 2042 but rather, how much will it be worth in 10 yrs?

15?

THAT's the big question. Who knows?

Most people sell contracts over time and most DVC contracts have held their value over time.

What happens when each passing year begins to seriously weigh on the remaining contract value?

If you buy today and keep it through to end, I believe the value holds. It's why I bought BCV.

If you buy today at $105 and in 10 yrs, the value is 85, maybe that's a problem (although you would have used 10 yrs worth of points). So you bought 100 points at $10,500, used 1,000 of them at current market value of $8/pt (minus MFs) and sold for $8,500 so you realized $16,500 value on a $10,500 purchase.

I really don't believe the value will decline past the value of use in the final yrs, and all of this is assuming no extensions closer to 2042.

For example (using today's dollars for reference), in 2036, with 5 yrs of useable points, our hypothetical 100 pt BCV contract will have 500 points remaining at $8/point market value ($14 current rental value minus $6-7 MF) or about $4,000 or $40/pt value. I doubt it would sell for much less.

 

[LAX]

You've hit upon the "OKW Extension Problem".

What's today's value of points 25 from now?

To consider that, the time value of money, which we routinely set aside in these discussions, becomes paramount. A CCV property worth $150/pt for 28 yrs of contract in 2042 isn't worth nearly that much today.

In real terms, when you're looking at $176 for 50 yrs vs $105 for 25 yrs, the value for point over the life of the contract might be equal, but you're frontloading much of that CCV cost in today's dollars.

For a 100 point contract, that CCV contract is costing you $17,600 and the BCV $10,500 in 2017 dollars.

In that case, I think you could make the argument that spending $10,500 today and investing $7,100 for the next 25 yrs in order to buy a replacement contract in 2042 might be a much better deal.

Especially if you were to decide in 2042 that you were done.

You brought up an interesting angle in the analysis of a DVC purchase that I hadn't really considered during my research at the time of my purchase. I think many people "ignore" time value of money during their analysis (at least I did) is that the calculation would get too complicated. If one were take this concept further, how about just paying for a discounted cash room on an annual basis using proceeds from investing the entire cost (purchase price plus estimated annual dues for the life of the contract) of purchasing DVC? I am not a hardcore number cruncher, so I honestly don't know which would come out ahead.

LAX

 

[ziravan]

A much bigger concern isn't what the value of BCV will be at end of contract in 2042 but rather, how much will it be worth in 10 yrs?

15?

THAT's the big question. Who knows?

Most people sell contracts over time and most DVC contracts have held their value over time.

What happens when each passing year begins to seriously weigh on the remaining contract value?

If you buy today and keep it through to end, I believe the value holds. It's why I bought BCV.

If you buy today at $105 and in 10 yrs, the value is 85, maybe that's a problem (although you would have used 10 yrs worth of points). So you bought 100 points at $10,500, used 1,000 of them at current market value of $8/pt (minus MFs) and sold for $8,500 so you realized $16,500 value on a $10,500 purchase.

I really don't believe the value will decline past the value of use in the final yrs, and all of this is assuming no extensions closer to 2042.

For example (using today's dollars for reference), in 2036, with 5 yrs of useable points, our hypothetical 100 pt BCV contract will have 500 points remaining at $8/point market value ($14 current rental value minus $6-7 MF) or about $4,000 or $40/pt value. I doubt it would sell for much less.

Just to finish the thought, suppose I bought that hypothetical 100 point BCV today and sold it in 2036 for $40/pt (in today's value).

I will have used 19 yrs worth of points/1,900 points valued in today's dollars as roughly $8/point or $15,200 and sold for $4,000.

So you would get $19,200 value on a $10,500 investment. Roughly.

I think all along the way, this relative value will hold true.

I just don't believe length of contract is a very big factor in buying or not buying BCV. It certainly shouldn't be nearly as big a consideration as buying where you want to stay.

 

[Dean]

You brought up an interesting angle in the analysis of a DVC purchase that I hadn't really considered during my research at the time of my purchase. I think many people "ignore" time value of money during their analysis (at least I did) is that the calculation would get too complicated. If one were take this concept further, how about just paying for a discounted cash room on an annual basis using proceeds from investing the entire cost (purchase price plus estimated annual dues for the life of the contract) of purchasing DVC? I am not a hardcore number cruncher, so I honestly don't know which would come out ahead.

LAX

It does get complicated, esp when you realize that you're still going to go on vacation so you might use part of those funds along as well. IMO however, to ignore the issue of the TVM/Opportunity cost is not reasonable.