Disney Purchase or Resale?

[FayeW]

I have just started thinking about buying into DVC, but I am not sure whether we should buy a new contract direct from DVC, or buy resale. The big sticking point with me on buying direct is that the minimum purchase is 150 pts ( at least for SSR, is it the same for each resort?) and the yearly maintenance fees. With 150 pts, and $3.65 per point yearly maintenance fee ( I used OKW because it is the lowest, and I think this is about right) the yearly maintenace fee would be $547. per year. Since I only plan to go every 2 years or so, I would spend nearly $1100. for the cost of the room, over and above the cost of the points themselves. I think that I could stay at BCV for that money in adventure season anyway, paying cash, without having to buy the points up front.

Buying a smaller contract resale, at say, 60 or 75 pts and banking them to use double the amount every two years would save 1/2 -2/3 of the maintenace fee, depending on the size of contract. Does this make sense or am I missing something? We would generally travel early December, and if we had a January use year, theoretically we could use banked, current, and borrowed points all at once for one trip during premier season, couldn't we?

I hope I haven't been confusing, I just want to know which way would suit our needs best when I present the info to my husband. I think I am leaning towards a smaller resale contract.

 

[DrTomorrow]

Well, I'll give it a shot:

The minimum new purchase number of points from Disney is 150, regardless of resort.

You can always use what you banked last year and borrow from next year; however, if you travel in December, a January use year might pose problems if you ever have to cancel - you could "lose" banked points and this year's points.

Given the vacation plans you outlined, then it does sound like a smaller resale contract is best for you.

Good luck!

 

[tjkraz]

Originally posted by FayeW
...Since I only plan to go every 2 years or so, I would spend nearly $1100. for the cost of the room, over and above the cost of the points themselves. I think that I could stay at BCV for that money in adventure season anyway, paying cash, without having to buy the points up front.

Yes, and with those 300 pts (150 x 2) you could get almost 3 weeks in a studio compared to 4 or 5 nights if paying Disney's cash rates.

Or, you can use the greater number of points to upgrade from a Studio to a 1B. That was one of the main resaons we bought into DVC in the first place. Forget breakeven points--we're happy to be getting a One Bedroom for the cash we would have paid for similar stays at a Moderate resort.

Buying a smaller contract resale, at say, 60 or 75 pts and banking them to use double the amount every two years would save 1/2 -2/3 of the maintenace fee, depending on the size of contract. Does this make sense or am I missing something?

It does make sense. Just realize that smaller contracts can be harder to come by, and are often "stripped" (meaning that the previous owner has used all of the current year's points AND borrowed next year's points). If you end up with a stripped contract, it could be two years before you will actually receive any points.

Also, closing costs vary little according to the size of the contract. Figure about $400 for closing, which is $2 per point on a 200-pt contract, but about $7 per point on a 60-pt contract.

We would generally travel early December, and if we had a January use year...

Granted this is a nit-pic, but there are no January Use Years.

...theoretically we could use banked, current, and borrowed points all at once for one trip during premier season, couldn't we?

You can always do that as long as you haven't used the points for another trip. The month in which you travel has nothing to do with your Use Year.

A small resale would definitely fit the profile you describe. Just be wary of getting ripped off (my words) by a resale contract with unfavorable terms.

In the meantime, if you happen to have a trip scheduled at WDW before you move forward with a purchase, be sure to take the DVC tour and speak with a salesperson. I know this doesn't apply to everyone, but our first stay in a DVC One Bedroom changed our attitude toward vacations forever. Having the washer / dryer in-room...whirlpool tub...DVD player...balcony...full kitchen. It just doesn't get any better than that!

 

[Coach Rick]

My advice is to play with the points charts. One great way to play with the numbers is to try Caskbill's DVC planner. This is the link to download it http://web.nalu.net/~wneth/dvcplanner.htm

I love just dreaming with that program. We too originally thougt we'd bye 175 points to use every other year, but that lasted one trip, and we were signing the papers for a 130 point add on. We now have 305 points, and will probably add on another 200 in the next two years. Our goal is to have at least 100 points for each of our three children as they graduate from college to use as they see fit. Notice I have two trips planned in 05. Like I say my original intent was every other year.

Either way you go won't hurt you. We bought from DVC direct, but I can certainly understand your rational to buying a resale. Like others have said be careful of not being attacted for price, only to find the contract is stripped. Good Luck!!

 

[FayeW]

Thanks for your help. I've been doing some calculations and I think, and I will admit, that I've been having a hard time rationalizing why people pay so much money for these points, and then pay for annual fees as well. I think I finally"get it". This is what I've come up with so far:

There is a small contract for sale that has not been stripped. (50 pts coming available Dec 05). We are planning on going next year, in Dec. which happens to be the end use month for this contract. I could use the 50 pts, and borrow 40 from 2006 to give my family 5 days in a standard view 1 bdrm at BWV. I could then bank the remaining 10 points of my 2006 to use with my 50 pts from 2007, and borrow the remaining 50 from 2008, so I would have 110 pts available in 2007, which I believe would be enough for a 2 bdrm at OKW for 5 days, or I could rent an additonal 10 pts from some one else to stay in a 2 bdrm at BWV. Is this right?

The way I calculate this is $65. per point x 50 pts = $3300. + $400. for closing costs =$3700. Factoring the great exhange on CDN right now, it would come to about $4625. CDN / 38 years remaining on the contract = $121.71 CDN per year. The maintenance fees would run me about $250. per year (CDN) so for my holiday every 2 years I would calulate $121.71 +250 =$371.71 x 2 (yrs) =$743.42 CDN to stay in deluxe accomodations on site for 5 days.

I have never stayed on site, I rented a terrific 2 bdrm via skyauction for our first and only trip so far, and I have to say that I expected we would do the same next time. The cost for DVC is about double what I would pay through skyauction for comparable offsite accomodations, however, from what I understand, the accomodations are superb and everything is spotless and well maintained. (Can't say that about the condo we rented).

My husband is interested in numbers, do mine make sense?

 

[tjkraz]

FayeW:

A few comments on your last post:

1. When you say the points are "coming available" in December '05, be sure to clarify that those are actually the 2005 points. I've seen resales that mention points "coming available", and what they actually mean is that the 2006 points could be BORROWED as of December '05. I'm not trying to imply that is the case with the listing you are looking into, but you'll want to double check.

2. The $65 per point figure you cited seems low to me (unless the points are at Vero.) Most contracts are currently selling in the $72-74 per point range.

2a. If the points are at Vero, just realize that Vero has the highest dues of any resort in the program. While you may save a few dollars up front (vs. paying $70+), you'll more than make that up over time in the form of higher dues. And, it's possible that Vero owners will take an additional hit in 2005 due to the hurricane damage incurred. The resort has been closed for over a month now while they work on repairs.

Dues at VB right now are more than a dollar per point greater than Old Key West. In the long run, you'd be better served to pay $70 per point for OKW vs. $65 at VB. With the maintenance where it is, it would take you less than 5 years at VB to surpass that $5 per point difference in the initial investment cost.

2b. If your primary goal is to use your points at Disney World, PLEASE buy at contract at one of the WDW resorts. While importance of the Home resort booking window is somewhat exaggerated, IMO, it would still be wise to be able to book a room at a WDW hotel on 11 months notice. You mentioned a December trip in your post, and I can tell you that December is one of the most difficult months to book. If you can't get a room there until 7 months, you may not have a whole lot of options available.

3. Most of the resales that I've seen have required that the BUYER (you) pay a year's worth of maintenance fees to the seller in order to pass ROFR. You may be able to skate this one by without paying Maintenance since the 2004 points are definitely gone. But only paying $65 pp plus closing costs seems awfully low to me. Perhaps someone with a better knowledge of the current resale market will disagree.

Good luck.

 

[FayeW]

The points were definitely coming on Dec/or, available to be borrowed Dec/04. They are for Vero Beach, and I used the maintenance figure I was quoted yesterday with a person from the Timeshare Store in my calculations.

We would generally be travelling the first or second week of Dec.,(Adventure Season) and I am confident that availability would be pretty good that time of the year. F & W show is over at Epcot, and I don't think people start traveling for the holidays until after mid Dec.

 

[tjkraz]

Originally posted by FayeW
The points were definitely coming on Dec/or, available to be borrowed Dec/04. They are for Vero Beach, and I used the maintenance figure I was quoted yesterday with a person from the Timeshare Store in my calculations.

I'm not questioning the calculation, I'm just pointing out that points at the Vero Beach resort are the HIGHEST of any resort in the DVC program. And, due to hurricane damage sustained this year, they are likely to increase to some unknown degree in 2005, either due to repair costs (replenishing reserves) or simply an increase in insurance on the resort. The increase is almost certain to be more than the 2-4% that the other resorts will experience.

If you're comfortable with the figures quoted to you, so be it. But it is an established fact that VB has the highest dues:

OKW 3.68
SSR 3.80
HHI 3.86
BCV 4.18
VWL 4.22
BWV 4.25
VB 4.67

Just trying to help save you some money in the long run.

We would generally be travelling the first or second week of Dec.,(Adventure Season) and I am confident that availability would be pretty good that time of the year. F & W show is over at Epcot, and I don't think people start traveling for the holidays until after mid Dec.

Well far be it from me to question your perceptions. Sorry. Just trying to be helpful.

By the way, you might want to question whether you are the only current or prospective DVC member that has EVER realized that the first two weeks of December are:

1. The CHEAPEST time of the year to stay at a DVC resort.
2. Typically one of the slower seasons at WDW as a whole.
3. A very nice time to visit Disney with the holiday decoractions, pleasant weather, etc.

OK, I'll just come right out and say it. The month of December...the ENTIRE MONTH OF DECEMBER...is the single most difficult time to book a room at a DVC resort. Yes, all of the other Disney resorts may be at a fraction of their peak occupancy, but DVC members are well aware of everything that you cited above.

Search the board for posts dating back to January '04. You will find DOZENS of messages from DVC members who were calling DVC and booking a room 11 months TO THE DAY of when they want to make a trip this December.

Don't believe me? So be it. Can't say I didn't try.

 

[DrTomorrow]

FayeW:

Just an FYI - the first two weeks of December are quite popular with DVC owners. The crowds are light and the point cost is low, so that time books up rather quickly.

Slow time at WDW doesn't necessarily mean easy to book at DVC.

Good luck!

 

[CarolMN]

You will not, I repeat NOT be able to book a standard view room at BWV in early December unless you have a BWV contract. Those rooms are completely booked almost as soon as the 11 month window opens. There is always a waitlist for them. Do not base your calculations on standard view points - if you do, you are in for disappointment.

FWIW, we have stayed at BWV in early December every year since 2000 and until this year, I always booked a standard view room. (This year we are trying the guaranteed Boardwalk view). I called day by day to get the reservation as soon as MS opened. Once I forgot to call until 1 PM and got the last available standard view room. I'm not saying waitlists don't come through, but if/when they do, it is a matter of luck. Many, many more end up disappointed than successful.

It is possible to get a preferred view room for this time at BWV at 7 months, but even then, you will probably need to use the waitlist.

If you want to stay at WDW during early December at a DVC resort, buy a contract for either OKW, VWL, BCV, SSR or BWV and plan to make your reservation at your home resort when the 11 month booking window opens.


Best wishes -